Citation:

Lavendo Indrawan, Yos Sunitiyoso, Agung Wicaksono. "Drilling Contractor Hiring Selection Using Analytical Hierarchy Process (AHP) Method in Geothermal Well Construction Project" International Research Journal of Economics and Management Studies, Vol. 3, No. 9, pp. 243-253, 2024.

Abstract:

COP28 (Climate Change Conference) in Dubai concluded with an agreement that marks the "beginning of the end" for the fossil fuel era. The agreement urges parties to take global action to triple renewable energy capacity and double progress in energy efficiency by 2030. Indonesia is believed to have the second-largest geothermal energy potential in the world. However, the utilization of electricity generation is quite low compared to other countries which also have geothermal energy potential. Indonesia only utilizes approximately 10% of its total potential. Challenges come from the economic value of the project itself. The cost of the global geothermal industry is primarily dominated by two key components: power plant construction and well construction. Well, construction involves costly and time-consuming operations, with drilling being the primary activity. The cost of drilling operations includes the use of existing drilling equipment and formation evaluation. Considering these factors, the well construction cost shall attempt to be reduced or at least managed to maintain the economic value of the project. This research aims to determine criteria that are important for geothermal operators or project ownersto select reputable and reliable drilling contractors (drilling rig). The criteria and prioritization techniques were first identified through a literature study, further complemented by interviews with key decision-makers in the company, questionnaires given to experts within the company, and a survey of industry practitioners. Four main criteria—administrative, HSE (Health, Safety, and Environment), technical requirements, and commercial—were identified to support the prioritization process using the Analytical Hierarchy Process (AHP). Among the fourteen sub-criteria, the three with the highest global weights are HSE Performance, Rates, and the Well Control System.

References:

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Keywords:

Decision Making, Analytic Hierarchy Process, Renewable Energy, Geothermal, Well Construction.