Valuing Investment Management Fees, Active Portfolio Management, and Closed-End Fund Discounts

Managing Oil and Gas Project Value By Prime (Pertamina Investment Management Engine)

Proc. Indon. Petrol. Assoc., Digital Technical Conference, 2020 ◽

10.29118/ipa20-bc-88 ◽

2020 ◽

Author(s):

F. Febrian

Keyword(s):

Portfolio Management ◽

Corporate Strategy ◽

Oil And Gas ◽

Investment Strategy ◽

Project Portfolio ◽

Action Plans ◽

Investment Management ◽

Micro Scale ◽

Robust Portfolio ◽

Oil And Gas Companies

Oil and gas companies are facing an enormous challenge to create value from mature fields. Moreover, price volatility presents a massive impact on project uncertainties. Therefore, robust portfolio management is essential for oil and gas companies to manage critical challenges and uncertainties. The objective of this study is to develop a robust portfolio model to assist top management in oil and gas companies to drive investment strategy. PRIME (Pertamina Investment Management Engine) has been built to visualize advanced oil and gas project portfolio management. The engine observes the relationship between risk-and-return as the main framework drivers. The profitability index is endorsed as a parameter to envisage the investment effectiveness of individual projects. Correspondingly, the risk index is a manifestation of multi-variable analysis involving subsurface uncertainty and price. A nine clusters "tactical board" matrix is provided as the outcome of PRIME to define generic strategy & action plans. The PRIME analysis leads to a dual theme of perspective: both macro and micro-scale. The macro-scale discovers a diversification of strategy and scenario development to achieve long-term objectives. Whereas, micro-scale perspective generates a detailed action plan in a particular cluster as a representation of the short and mid-term corporate strategy. Several strategies and action plans have been recommended, including advanced technology implementation, new gas commercialization, additional incentives in the Production Sharing Contract, tax management renegotiation, and project portfolio rebalancing

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