Business feasibility analysis Plan for the Acquisition of Oil and Gas Block C in Country Senegal
Kevin Octareza

University Of Indonesia
Jl. Salemba Raya No.4, RW.5, Kenari, Kec. Senen, Kota Jakarta Pusat, Daerah Khusus Ibukota Jakarta 10430

Abstract

The purpose of this thesis is to analyze the business of Company X^s acquisition of Oil and Gas Block C in country Y. Company X received an invitation to participate in an open tender to acquire the ownership portion of the Oil and Gas Block by Company Z. Company Z is an international oil and gas company operating the Oil and Gas Block C, offering a 40% share of the Block ownership of the total 82% owned with the condition that the Company remains as the operator of the Block. the oil and gas. Oil and Gas Block C is located in the sea area, 90 Km from the coast and in the deep sea, has oil reserves in the reservoir / underground equivalent to 430 million barrels. This Block C oil exploitation project will be the first crude oil production in country Y.

The business feasibility method used is the capital budgeting method which calculates the variables Net Present Value (NPV), Internal rate of return (IRR), Profitability Index (PI), Payback Period, Discounted Payback Period. Calculation of Capital Budgeting by sensitive to crude oil price parameters and Weighted Average Cost of Capital (WACC).

The results obtained from the Capital Budgeting Analysis based on the sensitivity of these 2 parameters, show the value of a positive NPV, IRR is greater than WACC and PI >1. So it can be said that the Oil and Gas Block C investment plan is feasible.

Keywords: Acquistition, Participating Interest, Discounted Cash Flow, Oil & Gas Upstream

Topic: Financial Management and Accounting