Strategic Analysis in Integrating the Development Wells Spud Readiness with Drilling Project Management Office (DPMO) at PT. Sinergi Hulu Hebat (SHH)
Abstract
The upstream oil and gas sector in Indonesia face structural production declines of 3–7% annually while domestic energy demand continues to rise. PT. SHH, a sub-holding of PT. PH, contributes significantly to national oil and gas output, yet its development wells spud realization has consistently fallen below annual targets, causing inefficiencies in capital utilization and reduced production. This study investigates the root causes of delays in development wells spud readiness and evaluates strategic solutions to accelerate well preparation and optimize delivery. A mixed-methods approach was employed, combining quantitative analysis of historical performance data, including Critical Path Method (CPM) and Pareto analysis, with qualitative insights from semi-structured interviews and Current Reality Tree (CRT) assessment. Failure Mode and Effects Analysis (FMEA) was used to quantify risk, and the Analytic Hierarchy Process (AHP) evaluated alternative strategies. The findings reveal that delays are primarily driven by fragmented governance, land acquisition and permitting bottlenecks, site and road construction constraints, and limited cross-functional coordination. Among evaluated alternatives, the implementation of a Drilling Project Management Office (DPMO) emerged as the most effective business solution, integrating oversight across subsurface, drilling, project, procurement, logistics, and permit functions. Post-implementation results demonstrate that spud realization increased to 95% of the WP&B target, delivery performance exceeded RKAP expectations at 101%, and capital efficiency improved, reducing potential revenue losses by an estimated USD 10–35 million. This study highlights that centralized governance, proactive monitoring, and structured cross-functional coordination are critical for enhancing well spud readiness, optimizing resource utilization, and supporting national energy security.
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