supreme energy development drilling...

supremeenergy

Supreme Energy

Development Drilling Project

DRILLING PROCUREMENT SAVINGS

6th ITB International Geothermal Workshop

22 March 2017

supremeenergy SAFETY MOMENT

supremeenergy INTRODUCTION

Supreme Energy

Muara Laboh (SEML), Solok Selatan, West Sumatra

Rantau Dedap (SERD), Lahat, South Sumatra

Raja Basa (SERB), Kalianda, Lampung

Status:

SEML – Start-up Project

(early civil work and rig mobilization)

SERD – Procurement

of Goods & Services

SERB – Development

of Exploration Program

(slimhole drilling)

supremeenergy SE ORGANIZATION

• Complete organization functions to manage Exploration Campaign, now moving toward

Development Stage

• This presentation shares the deliverable from 3 functions shown in the chart.

supremeenergy DRILLING PROJECT MANAGEMENT

Management of Work:

1. The Initiating Process

Initiate the development drilling project and gains approval to begin working

2. The Planning Process

Establish the scope of the project, refine the objectives and define the course of action

required to attain the objectives

3. The Executing Process

Perform and complete the work defined in the project management plan to satisfy the

project specifications

4. The Monitoring and Controlling

Keep track, review and regulate the progress and performance of the project; identify any

areas in which changes to the plan are required; and initiate the corresponding changes

5. The Closing Process

Finalize all activities with close out reports; budget, individual well, lesson learned, and

all project drilling data management, and submits them management to formally close the

project

Management of Services (Contractors):

√ Employ Conventional/Direct Drilling Management process (in lieu of Integrated Project

Management (IPM) process)

supremeenergy WHERE ARE WE IN “WELL DELIVERY PROCESS” ?

PREPARATION PRE-

PLANNING

DETAIL

PLANNING EXECUTION

POST

DRILLING

• Geology &

Geophysics Survey

• Conceptual Model

• Drilling Services &

Goods Procurement • Well AFE

• Procurement of

Goods and Services

• Rig Inspection

• Drilling Procedure

• Drill-on Paper

• Pre-drilling Cross

Sections

• Estimated well

performance

• Well Testing

Programs

• Basis of Well Design

• Estimate Resources

• Completion Test

supervision

• Mobilization of Rig

and Services

• Operation

Supervision

• Operation Supports

• ata and Reports

• Cost Control

• Routine Well site

Coordination

• Cutting Descriptions

& Mud Logging

• Well Logging &

Coring Program

supervision

• Well Test Report

• Heat-up Surveys

• Flowing PTS

• Well Flow Test

Chemical

• PWD Analysis and/or

Injection test

• Lessons learned for

performance

improvements

• End of Well Reports

• AFE Close Out

• Contracts Close Out

• Geology Prognosis

(including logging &

coring program)

• Feasibility Study • Hole objectives and

risk summary

• RACI Diagram &

Decision Tree

• Offset geothermal

fields benchmark

• Well Completion

Report

• Setting Casing Depth • Peer Review

Geologist Drilling Drilling Decision Team (WDT):

Geologist, Drilling, Reservoir Engineer

Reservoir Engineer

SERD SEML SERB

supremeenergy DRILLING BUDGET PROCESS

Benchmark

• Analyze large number of wells drilled in Indonesia, Philippines, and Iceland

• Study the drilling data of 8 wells drilled in Star Energy WW in 2006-2007 to develop well

budget (AFE) based on P60 success chance (at existing market price)

• Peer review of Well Delivery Process (WDP) by SKM Engineer

Exploration drilling performance

• SEML (2012), 6 wells, 2% overrun, 15% NPT (rig & services related)

• SERD (2014), 6 wells, 1% saving, 12% NPT (rig & services related)

• Procurement of goods & services thru combined tenders and direct appointments of key

drilling services to secure the geothermal expertise and experiences.

Development Drilling – Base Case Budget

• Assume same performance with including same NPT margin

• SEML

‐ Refer to existing market prices (SERD) before the “oil price drop”

‐ Scope of Work: 13 wells

• SERD

‐ Normalized with 10% reduction after the “oil price drop”

‐ Scope of Work: 16 wells

supremeenergy PROCUREMENT OF GOODS & SERVICES

No Description of

Drilling Services

Procurement Plan

Proc. Method Bidders Focus

1 Drilling Rig Services – 2 drilling rig units

Tender 4 bidders, preselected thru PQ process

• Technical, Experience, and Organization • Commercial • Availability

2 Cementing Service, including Bulk Plant

Direct Selection 2 bidders, based on market existence & performance

• Technical, Lab Test & Experience • Commercial

3 Directional Drilling Service and Drilling Jar

Tender 3 bidders, preselected thru PQ process

• Technical, Experience, and Track Record • Commercial

4 Wireline Logging Service and explosive supply


• Technology & Data quality (Subsurface) & Experience • Commercial

5 Drilling Fluid Service Tender 3 bidders, based on market existence & performance

• Technical, Lab Test & Experience • Commercial

6 Aerated Drilling Service Direct Appointment Single provider • Strong negotiation

7 Drilling Bit & Services Tender 4 bidders, preselected thru PQ process

• Technical, Experience, and Track Record • Commercial • Best 3 with selective application of products

8 Fishing Service , Whipstock and Rental Equipment


• Technical, Whipstock Technology and Track Record • Commercial

9 Mud Logging Services Tender 3 bidders, based on market existence & performance

• Technical, Experience, and Organization • Commercial • Availability

A Casing Various Sizes Tender 3 bidders, based on market existence & performance

• Technical, Delivery Time • Commercial

B Master Valve 12” & 10” & Gate Valves

Tender 3 bidders, based on market existence & performance

• Technical, Delivery Time and Track Record • Commercial

C Casing Head & Wellhead Accessories

Tender 4 bidders, based on market existence & performance, mostly local manufacturer

• Technical, Delivery Time • Commercial

supremeenergy RESULTS OF PROCUREMENT

Drilling Goods / Drilling

Services

Selected

Contractor

Diff.

(%) Remarks

Goods Procurement

Goods 1 A ↓ 1%

Goods 2 B ↓ 21%

Goods 3 C ↓ 12%

Services Procurement

Service A 1 ↓ 3%

Service B 2 ↓ 72%

Service C 3 ↓ 39%

Service D 4 ↓ 52%

Service E 5 ↓ 33%

Service F 6 ↑ 38% Changes on design

/ Spec, low total

contract value

Service G 7 ↓ 41%

Service H 8 ↓ 14%

Service I 9 ↓ 22%

Procurement of Goods and Services:

• 2 Drilling Rigs Contracts,

• 18 Drilling Services Contracts

• 5 Drilling Goods

Results:

• SEML: 32.6% reduction from budget

• SERD: 23.4% reduction from budget

• Total budget reduction: approx 23% of

Base Case Budget (procurement saving)

This procurement saving is a booked

value to be materialized during

execution of drilling program which

affected by:

• Quality of goods & services (personnel,

equipment and technology) delivered by

contractors

• Geology and subsurface nature

• Other factors such weather & other natural

events

• Quality of supervision by Company

representatives

supremeenergy FACTORS CONTRIBUTED TO $ SAVINGS

Master the engineering and field application of the goods and services

Put into detailed scope of work, and develop the most efficient pricing structures

Know intimately the performance of service providers, and the vendors of quality

drilling goods

Participate in maintaining competitiveness among service providers

Develop competitive procurement plan & process

Perform technical and commercial evaluation meticulously

Have strong legal support and negotiation skill

Take the benefit of slowing down market

Employ direct management of contractors

supremeenergy TO CLAIM THE SAVINGS…… Stage Activities

Planning & Building Review Exploration Well Data and Subsurface Engineering

Feasibility Study, including Conceptual Well Design

Drilling Plan & Budget (AFE)

Procurement Strategy

Prequalification and Selection of Drilling Services Providers

Well Design/Drilling Program Offset well study and validate lessons learned

Risk assessment and mitigation plan

Basis of Well Design

Peer Review

Final Well Design & Drilling Program

Procurement Preparation of Scope Of Work(SOW)

Preparation of Tender Documents

Tender Process of Drilling Services

Award Contracts

Site Preparation / Mobilization Ensure all Statutory/Regulatory Compliances in Place

Worksite Preparation

Set up Logistics /Supply Base

Mobilization of Goods and Services

Drilling Operations Management

Manage Real Time Drilling Operation & Engineering Compliance

Prepare Daily Operation & Cost Analysis

Invoicing Process & Cost Control

Ensure HSE Compliance

Contract & Logistics Support and Management

Engineering Support and Drilling Data / Reports handling

Closing and Data Management Manage All Drilling Reports and Data into Company Database

Prepare End of Well Report for each drilled well

Prepare Drilling Cost and Budget Report

Drilling Assets handover to Logistics Department

Drilling Contracts Close-Out

SERD

SEML

2017-

2018

SERD

2018-

2019

SEML

supremeenergy

THANK YOU

SERD Wellpad “I” @ 2400m ASL