Abstract

Recently in Indonesia are experiencing various of revision and improvement in the regulations, related with the oil and gas industry activity, this kind of situation certainly will impact to the investment atmosphere in the Indonesia oil and gas upstream. International Oil Company and the Government has different point of view related to contracts in PSC. Several analysis or study has been done by institutions and individuals through articles or papers on the comparing for the terms and conditions of a contract with different country. But not many have discussed particularly about the general change of PSC in Indonesia.

This study will compare the historical of Indonesia PSC generations from generation I (1966) until the recent fiscal terms of gross split (2017). Those terms will be compare by using a hypothetical block to modelize the PSC block in Indonesia, which consist of several field. Some assumption also will be used for each field with different peak rate, development scenario, capital variable cost ranges, operation variable cost ranges, which those range data are expected still within the range of most likely consist parameter for PSC block in Indonesia.

This study purpose is to analyze if the Gross Split mechanism is more attractive or equal the PSC Cost Recovery. The result of this study shown that the gross split PSC refer to the Minister of Energy and Mineral Resources no.52 year 2017 is still attractive to the investor from the contractor take perspective. Eventough with the PSC Cost Recovery mechanism the contractor feels more secure for the cost that can be recover from the oil and gas that produces, as part of cost recovery. If the application of Gross Split is clear enough from the regulation, tax, assets rent and others, surely this mechanism can attract more investor to do exploration and development in Indonesia.

Regardless of the political and strategic interests of the Indonesia government or the National Oil Company, the results of this study hopefully can be useful for the professional, educational institution, and government for lesson and learn. How the fiscal term can be impact to the government take, contractor take, cost recovery also the production target related with reserves replacement.

You can access this article if you purchase or spend a download.