Minimizing Potential Operational Risk, Schedule and Cost Impact Through Early Quality Assesment of Local OCTG Mills: The Dilemma of Achieving Production Target and Overcoming Supply Chain Challenge in Indonesia

Tubulars are part of the backbone in Oil and Gas industries, especially in drilling operations as it serves as structural support, conduit, protection, pressure isolation and well barrier. Although generically the cost of tubulars could be ranging around 9-10% of the total well cost (based on PC Ketapang II Ltd. Operation), it is an integral part of the well that protects the company’s millions of dollars investment throughout the life of the well. As such, it is crucial to ensure company able to procure and utilize acceptable quality of tubulars for its operations to minimize potential operational risk, schedule and cost impact.Indonesia has many capable local mills that are certified by American Petroleum Institute (API) and recognized by the host authority as registered in Buku Data Kemampuan Nasional Industri Penunjang Migas Nasional Tahun 2021 by SKK Migas(1). However, the process and assessment result for these mills to be registered was not easy to be accessed to identify any gap with operator's standard. In order to support the aspiration by host authority to utilize local products, specifically to support the local pipe industries, the oil and gas operator as the investor shall also fulfil internal requirement to assess the pipe manufacturers in Indonesia, specifically. The assessment was conducted successfully and shows that the local mills in Indonesia have Quality Management System (QMS) and QAQC process that meets both international standards and company internal requirement. By having this assessment process, the potential risk can be minimized and local supply chain challenge can be mitigated to contribute in Indonesia Government’s aspiration towards 1 Million BOPD and 12 BSCFD target in 2030.