Crude Oil Production Recovery Strategies for Upstream Sectors on Offshore Indonesia: A Conceptual Model

Crude oil is one of Indonesia's most significant revenue from its export. However, crude oil is also a burden in import spending to fulfill the high demand for its derivative product, fuel oil. This issue is driven by the decline of crude oil production and sluggish upstream activities to replace the depleted oil reserves, which are also affected by low crude oil prices in the market. The upstream oil activities such as exploration and exploitation mostly operated on onshore instead of offshore, so the offshore’ undeveloped oil reserves are still vast and promising. Therefore, there is an urgency to set the crude oil production recovery strategies by focusing on the offshore upstream sector. However, the offshore upstream macro processes are complex and dynamic, need a holistic view to understand their structure, causal relationship, and behavior over time. This study proposes a conceptual model based on the System Dynamics approach to comprehend those dynamic complexities. It will be modeled through one of the biggest and oldest offshore oil companies in Indonesia as a representative to produce the strategies. The conceptual model shows that the exploration sectors should be more prioritized to ensure the sustainability of exploitation activities and crude oil production recovery in the future.