Publications

The life cycle of EPC (Engineering, Procurement and Construction) projects continues to roll over in the upstream oil and gas industry in Indonesia in line with the emergence of various field development plans and AFE (Authorization for Expenditure) project approvals. As special task force for upstream oil and gas business activities in Indonesia, SKK Migas is responsible for supervising PSC (Production Sharing Contract) Contractors to design and execute various complex project activities to fit the project's economy and efficient cost recovery. During the period 2015 to 2018, there are 37 EPC projects become on stream. Those projects, both onshore and offshore, were being carried out throughout Indonesia with a total AFE approval value of more than USD 9.8 Billions. Those projects were monitored regularly by SKK Migas and reported monthly by PSC Contractors. SKK Migas evaluates previous projects experiences which several risk events were being identified during the project life cycle related to delay in project completion time and costs that exceed the budget. Those risks were identified and analyzed for risk management purposes. Based on the historical performance of several prior similar projects, this paper will show project uncertainties in the form of various risks that will be faced on future upstream oil and gas project activities. The results of the risk analysis are further mitigated to be used in the process of evaluating the next project's planning, bidding/procurement and executing.