Since entering Indonesia in 1968, ARCO has explored under twelve PSCs and found oil and gas in eight. Currently ARCO holds interests in six exploration PSCs: five operated and one non-operated. The attached map reflects ARCO operation blocks in Indonesia.

We did not put too much attention to our performance, not until the corporation directives on managing down costs was launched very extensively in 1992. The reason was simple: since inception until the year 1985 the trend in ONWJ was only up. But later things started to change: net income had been continuously trending down since 1987 before we picked-up again in 1994 with the start of the domestic gas sales. The upbringing that operating costs was not leveraging to the bottom line misled our behavior toward cost monitoring. We did not put attention to what happen to our cost expenditures not until the headquarters really put pressure that we had to manage the costs down.

Everybody realizes that performance management monitors and calibrates the results of the improvement. Performance measures can apply to complete processes or individual work activities. The data has to be processed to show trends, and fed back to everyone so improvement target can be agreed. In the pursuance of this concept, departmental performance measures templates developed from the department strategy to contribute to AIOGC New Mission were introduced. However, if the performance monitoring is compartmentalized only within each function, it is very difficult to see the big picture. By having an integrated performance profile the company could see the link between the performance and its past strategies for growth and development.



Research Location: PT ARCO Indonesia

Supervisor: Prof. Dr. Wagiono Ismangil

Accepted on June 1996



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