Mahakam Block has been in operation for nearly half a century with cumulative production of approximately 20 trillion cubic feet of gas and 1.5 billion barrels of oil. Mature field challenges have become more evident as portrayed by declining production, more complex surface constraints, more challenging profitability of new projects and decreasing resources of new wells, which are also exacerbated by external factors such as volatility of oil and gas prices. Despite the aforementioned challenges and complexity in terms of operating numerous fields with different characteristics, Mahakam is currently still one of the biggest producing blocks in Indonesia. The success of sustaining production and prolonging the life of Mahakam is the result of continuous innovations, improvements and optimizations on various aspects over the years.
Subsurface innovative ideas by restudying and redefining geological concepts has led Pertamina Hulu Mahakam (PHM) to drill step-out wells in Handil, Tunu, South Mahakam and Sisi Nubi fields that deliver positive results and open new opportunities. In the non-subsurface aspect, Indonesia's first Plan of Development that combines higher and lower value projects across fields called OPLL (Optimasi Pengembangan Lapangan-Lapangan) was initiated in order to develop fields with marginal value and to achieve economy of scale. Moreover, Capital Expenditure (CAPEX) optimization through evolution of platform design, well architecture and sand control method is crucial for exploitation of targets with lower resources over time. PHM has also launched CLEOPATRA (Cost Effectiveness and Lean Operations in Mature Asset), later renamed to LOCOMOTIVE-8 (Low Operations Cost of Mahakam to Achieve Effectiveness and Efficiencies), to achieve Operating Expenditure (OPEX) efficiency through various initiatives driven by each entity. Due to cost of money, budget accuracy is as important as expenditures reduction meaning that more detailed and deterministic budget estimation is necessary. In addition to optimizing cost structure, PHM strives to carry out gas commercialization efforts to improve revenue streams.
In this rapidly changing era, especially for Mahakam, paradigm shift becomes highly critical. Changes in the structure and size of organization is essential to adjust with business dynamics. Adaptive organization structure is performed through digitalization and competency improvement to reduce repetitive tasks and increase productivity per capita. Cooperation between neighboring companies brings mutual benefit by sharing rig, transportation means, and pipeline network systems. Mutual benefit opportunity is also available between the company and Indonesian government by amendment of fiscal terms with the aim to enable the execution of sub-economic projects. Ultimately, one effort alone may be insignificant, but the combination of all of the efforts will be the key to the continuation of Mahakam story.