Well abandonment is an obligatory work in the Production Sharing Contract. In the midst of low oil prices, this work cannot be postponed to do, especially for wells that have potential hazards. The longer it postponed, the greater risk will be face. It needs to be done with the most efficient way. Well abandonment of onshore-well in "R" Block of Central Sumatra Basin began in 2015. Reason for abandonment is varied from no more reservoir potential, mechanical problem, bad well integrity, missing part of wellhead, and vandalism. Since the initial start of the well abandonment work, the gold-plated effect appeared. The well abandoned in a very safe method, but not worth the risk. Discuss the procedures of selecting the well under potential circumstances to be plugged. An adjustment made by optimize it to fit-to-purpose abandonment according to Indonesia national standard while complying with the feasibility and safety operation. As a result, there is a decrease in average AFE cost during 2015 to 2017 by 29% which equal to US$8.5 million and still has decrease potential until the very fit-to-purpose method obtained. The average realization of AFE cost decrease from 48% to 34%. This paper shows that there is always a chance for optimization even though abandonment work does not have any gain of production and ignoring it also poses safety and cost risks. To date, this optimization has saved US$2 million.

There are 63 work areas in Indonesia producing 800,000 barrels of oil per day. Workover and well service or wellwork activities are carried out by PSC Contractors as one of backbone activities which compensates production decline. As a state institution for upstream petroleum activities in Indonesia, SKK Migas is responsible to manage and evaluate the performance of wellwork activities to serve the purpose of maintaining national production. More than 31,000 wellwork activities are performed annually and contribute to the production of more than 40,000 bopd. 2015 program is at 36,000 activities to contribute production target of 50,000 bopd. All wellwork activities are reported to SKK Migas by the PSC contractors in the form of a spreadsheet. SKK Migas evaluates the wellwork performance to be used as consideration in wellwok program approval for the following year. The evaluation includes numbers and types of activities, time and cost, and the contribution to production. During 2013 and 2014, SKK Migas managed to collect reports from PSC Contractors which consists of more than 60,000 wellwork activities. Based on the evaluation, SKK Migas also give appreciation to the PSC contractor who has the best performance on wellwork activities. This paper will illustrate how SKK Migas manages large scale wellwork activities in Indonesia using spreadsheet. This paper also illustrate how historical performance is compared, evaluated and analyzed for forward planning of wellwork activities.

Review the Activity Based Costing (ABC) and Earned Value Management (EVM) fundamentals of being applied to the case study. Examine the constraints and its feasibilities in recommending the implementation of ABC combined with EVM to well abandonment projects. Well abandonment project is one of phase in the oil well's life span that must be done after it is no longer producing and to protect environment. Instead of giving revenue, well abandonment projects are spending money. To fulfill its deliverables with cost-effectively and in timely manner, the project coverage requires good planning, scheduling, and control. This paper is an actual case study which documents the abandonment of 7 oil wells located in Indonesia. ABC assigns resource costs to a cost object based on activities performed for the cost object. EVM coordinates the work scope, schedule, and cost goals of a program or contract, and objectively measures progress toward these goals. By applying the fundamentals of ABC and EVM, the abandonment project of 7 oil wells was completed in a total of 131 days, a slippage of 12% over the approved plan of 117 days and at a total cost of 1.078 million USD, versus the target cost of 1.074 million dollars. This paper explores the step-by-step process that is used to create the Baseline Schedule, track the progress against the schedule and report to the appropriate stakeholders. The paper concludes by recommending ABC combined with EVM be applied to other well abandonment projects.