Slide 1 supremeenergy Supreme Energy Development Drilling Project DRILLING PROCUREMENT SAVINGS 6 th ITB International Geothermal Workshop 22 March 2017
Slide 1
supremeenergy
Supreme Energy
Development Drilling Project
DRILLING PROCUREMENT SAVINGS
6th ITB International Geothermal Workshop
22 March 2017
Slide 2
supremeenergy SAFETY MOMENT
Slide 3
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)
Slide 4
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.
Slide 5
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)
Slide 6
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
Slide 7
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
Slide 8
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
Direct Selection 2 bidders, based on market existence & performance
• 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
Direct Selection 2 bidders, based on market existence & performance
• 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
Slide 9
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
Slide 10
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
Slide 11
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
Slide 12
supremeenergy
THANK YOU
SERD Wellpad “I” @ 2400m ASL