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Proposal Total E&P Indonesie is one of the leading gas producers in Indonesia supplying more than 65% of the gas liquefied at the Bontang liquefaction plant. Operating 8 drilling rigs in all of their concession area, they drill an average of 150 wells within three years. This aggressive drilling activity is done to meet the natural gas delivery contract.
It is obvious that this enormous number of well gives a direct impact on provisioning material to connect the well to flow line. This huge need has also brought a bigger challenge in term of storage surface needs, handling complexity, and maintaining the stock. Another problem come up is that sometimes the target well are severely changed over the years. A change of plan resulting in material requirement change may occur within only two months.
To ensure the availability of well connection material, by respecting the constraints of maintaining the stock level and surface area availability, it is necessary to manage the purchase cycle, from planning, purchasing, to controlling the stock. Since implemented in early 2004, SAP/R3 MRP module will generate planned order from MRP (Material Resources Planning) run. This MRP run indicates the recommendation of how many supply material has to be provided to meet total reservation of the material. Planned order will follow the parameter setting in the material master, however MRP controller has a choice whether to follow the suggestion from plan order or not. On the other hand, because of the well connection material type and the difficulty in determining required material to be reserved before a confirmed bill of material is issued, made it difficult to implement SAP/R3 to plan the procurement material and stock control.
To overcome this problem, method and planning department has developed other tool outside the SAP system which is able to manipulate SAP R/3 data to control stock level. This tool is tailored to be user friendly, real time basis, and has the capability to generate analyses and proposal to the user. This management system has been resulted in stock optimization and avoiding material shortage over the years.
Introduction March 21 2004 is the milestone for this company when they achieved the highest production level of about 584,927 boe including oil and condensate. They supply more than 65% of the gas to be liquefied at Bontang liquefaction plant, on behalf of the association which operates the Mahakam permit. In order to maintain its position and to meet the natural gas delivery contract they do an aggressive drilling activity. In 2004 until 2007, it is noted that this company uses more than 8 rigs operating in all of their production area in order to drill not less than 150 wells.
Regarding the enormous number of well to be connected, it is obvious that it gives a direct impact on provisioning material to connect the well to the flow line. The advantages of buying a huge number of materials will give a higher bargaining position for the company. Theoretically these advantages made them able to control the price and negotiation. On the other hand, this huge amount of materials need has also brought some disadvantages in term of surface needs to store the material, handling complexity, and stock maintenance.
Another problem was that the procurement for well connection is that it was procured as a one year quantity. However, it was extremely difficult to have a precise quantity at the time they procure the material since it is impossible to define the material quantity in such an early step of the project.
Another problem during the project was because the target well sometimes severely changed over the years. Typically there will be a modification from the previous planning within only two months, it can be either the target itself or the type of the connection. The company acknowledges three types of well connection which are adjacent, remote, and remote commingle. Each type has specific needs.
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