A Quantitative Threshold for Oil
and Gas Assets
FEATURED PAPER
By Andika Jaka Saputra
Semarang, Indonesia
ABSTRACT
Repair–replacement decisions in aging oil and gas assets often lack a defensible quantitative threshold, as economic, technical, risk, and opportunity factors are typically evaluated in isolation. This study aims to develop an integrated, decision-oriented framework that unifies these value drivers into a structured and measurable decision rule. The research addresses three key questions: how to integrate multi-dimensional value drivers into a single framework, how to improve decision transparency and alignment with asset management objectives, and how to enhance robustness under uncertainty. The proposed framework combines AHP–SAW, engineering economic (EE) analysis, and an AI-based Decision Tree (C4.5) to establish a quantitative decision boundary. Application to real-world case studies demonstrate that the framework produces rational and context-sensitive decisions, with Economic Cost (C1) as the dominant factor, followed by C3, C2, and C4 within a narrow range. Sensitivity analysis confirms model stability under varying conditions. This study contributes by introducing a defensible, data-driven decision tool that links analytical optimization with practical implementation, supporting transparent asset management repair-replacement decisions under uncertainty.
Keywords: AHP, Asset, Decision Tree, Engineering Economy, Repair Decision, Replacement Decision
INTRODUCTION
- Indonesia Oil & Gas Demand and Infrastructure Challenges
Indonesia, as one of the largest emerging economies in Asia, is experiencing rapid economic growth that depends on reliable energy systems. Indonesia’s National Energy Master Plan projects that “energy demand will increase significantly, from 1.76 million barrels of oil per day (bopd) in 2025 to 3.72 million bopd in 2050.”[1] The increase in demand has not been matched by an increase in investment in the downstream sector, resulting in a structural imbalance between demand and infrastructure conditions, as illustrated in Figures 1 and 2.
Figure 1. Indonesia’s Oil and Gas Downstream Investment Outlook[2]
Figure 2. Indonesia’s Energy Masterplan[3]
This mismatch is compounded by aging infrastructure, as Knight et al. (2024) state, “Many of the world’s 12,000 offshore oil and gas platforms are nearing the end of their lives.”[4] In Indonesia, the company report that “86.7% of the oil and gas storage tanks in Indonesia are still in use beyond design life,”[5] confirming that this condition is a global structural phenomenon supported by similar reports in Africa, the U.S., and Europe[6],[7],[8],[9].
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Author’s note: This paper was originally prepared during a 6-month long Graduate-Level Competency Development/Capacity Building Program developed by PT Mitrata Citragraha and led by Dr. Paul D. Giammalvo to prepare candidates for AACE CCP or other Certifications. https://build-project-management-competency.com/our-faqs/
How to cite this paper: Saputra, A.J (2026). The Missing Link in Repair-Replace Decision: A Quantitative Threshold for Oil and Gas Asset; PM World Journal, June. Available online at https://pmworldjournal.com/wp-content/uploads/2026/06/pmwj165-Jun2026-Saputra-Missing-Link-in-Repair-Replace-Decisions.pdf
About the Author
Andika Jaka Saputra
Semarang, Indonesia
Andika Jaka Saputra is an engineer with over six years of professional experience in the oil and gas sector. Currently, he works as a maintenance engineer at the national oil company of Indonesia. Several projects have been completed in various downstream oil and gas projects, including fuel terminal, LPG terminal, and related infrastructure, with a focus on maintenance and asset reliability. He holds a diploma in Electrical Engineering from Semarang State Polytechnic, as well as both a bachelor’s and a master’s degree in industrial engineering from Bina Nusantara University. He is attending a distance learning mentoring course, under the tutorage of Dr. Paul D. Giammalvo, CDT, CCE, MScPM, MRICS, GPM-m, Senior Technical Advisor at PT Mitratata Citragraha to attain Certified Cost Professional (CCP) certification from AACE International.
Andika lives in Semarang, Indonesia, and can be contacted at: andika.jakasaputra@gmail.com
[1] Republic of Indonesia. (2017). Presidential Regulation of the Republic of Indonesia No. 22 of 2017: National Energy Master Plan. Jakarta: Cabinet Secretariat of the Republic of Indonesia
[2] Republic of Indonesia. Loc. Cit.
[3] Indonesian Directorate General of Oil and Gas. (2025). 2025 Performance Report: Directorate General of Oil and Gas of Indonesia. Indonesian Ministry of Energy and Mineral Resources. https://www.esdm.go.id
[4] Knights, A., Lemasson, A., Frost, M., & Somerfield, P. (2024). The world must rethink plans for ageing oil and gas platforms. Nature, 627, 34 – 37. https://doi.org/10.1038/d41586-024-00645-0.
[5] Saputra, Andika J. (2026, March 22). W4.0_AJS_Repair or replacement decision: Strategic decision approach using decision tree C4.5 algorithm (Part 1). 14 Clovers. https://14cloversaace.wordpress.com/2026/03/22/w4-0_ajs_repair-or-replacement-decision-strategic-decision-approach-using-decision-tree-c4-5-algorithm-part-1/
[6] Akashraj, D., P., & Maleith, K. (2020). The Impact of Ageing Facilities on Oil Production in South Sudan. International Journal of Research, 7, 489-498.
[7] Khan, R., Mad, A., Osman, K., & Aziz, M. (2019). Maintenance Management of Aging Oil and Gas Facilities. Maintenance Management. https://doi.org/10.5772/intechopen.82841.
[8] U.S. Department of Energy. (2016). Long-term strategic review of the U.S. Strategic Petroleum Reserve: Report to Congress. https://www.energy.gov/
[9] European Commission. (2020). Commission staff working document: Offshore oil and gas infrastructure in the European Union. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020SC0269
