W15_Candra Nugraha_Cementing Job

Opportunity Statements

Due to increasing demand for the wells work over, cementing jobs are required to perform squeezing existing formation and open new layer for oil and gas production. This field is producing about 7000 bopd by using 4 Rig/Hoist existing to serve 46 jobs per year.

As we need to accelerate oil production to achieve target by the end of year 2011, it’s about 140 old wells will be reactivated. The scenarios to provide the cementing equipments are described below.

Root Cause

  • To anticipate additional jobs for 3 unit rigs, one cementing tank is required to perform squeezing well  formation.
  • Cementing Pump, Mud Agitator and power supply should be available as well without disturbing current 4 Rig/Hoist existing.

Develop Alternatives

Three options are available to support current opportunities.

Development of the outcomes

The Force Field Analysis is developed as per below:






Minimum Acceptable requirements

The criteria of economic selection are:

  • The Highest Net Cash Flow and NPV.
  • Life Time is predicted for 5 years.
  • NPV calculated at 10% Discount.

Develop preferred alternative

Scenario: Invest new cementing unit, is this worth Doing?

Estimated revenue generated as calculated NPV@10% is US$4.927.022 for 5 years operation.

Pay out Time is 3.5 months.

Monitor and Evaluation (Post Mortem)

After the Authorization for Expenditure (AFE) is approved, the following Success Planning is monitored and shall be achieved.

Success Metrics

  • Spills – zero.
  • Industrial Accident / LTI  – zero.
  • Cost performance – +/- 10% of budget.
  • Schedule performance – +/- 10% of milestone dates.

Success Factor

The following action items are a must for achieving the Success Metrics above:

  • Good team work & coordination – meet on regular basis, good cross functional participation and good team commitment.
  • Follow the project management practices.
  • Follow HES procedures and approved standards & codes.
  • Utilize VIP’s & Best Practices.
  • Involve the right resources (e.g., contract development).


  1. Peters, Max S & Timmerhaus, Klaus D. (1991), Plant Design and Economics for Chemical Engineers 4th Edition, Singapore: McGraw-Hill, Inc.
  2. Sullivan, William G., Wicks, Elin M. & Koelling, C. Patrick (1942), Engineering Economy 15th Edition, Singapore: Prentice Hall, Inc.

About Candra Nugraha

I'am living in jakarta, indonesia
This entry was posted in Candra Nugraha, Week #15. Bookmark the permalink.

1 Response to W15_Candra Nugraha_Cementing Job

  1. DrPDG says:

    AWESOME as usual, Mas Candra!!! You really understand applied Engineering Economics very well, which is great news for BPMIGAS and Indonesia!!!

    Very shortly, you are going to have switch focus from Part II – Economic Analysis – (which on the exam is an open book section) to Part III – Project Management – (which is closed book) and is covered by Humphrey’s and your weekly reports, and Part IV – Cost Estimating and Control – (closed book) which is covered by Skills and Knowledge plus Humphrey’s.

    Part I – Basic Cost Engineering Skills & Knowledge – (which is an open book part) is based on Skills and Knowledge but will come automatically from your blog postings, paper and my handouts)

    So in the coming week or two, you need to finish up your paper and get started on preparing for the exams.

    Dr. PDG, Cape Cod, MA

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