Abstract

The drop in oil prices during last 2 years caused many oil and gas projects in global to be delayed, and even canceled, because the project was considered uneconomical to run under the current low oil price conditions. The postponement also happen in Indonesia and seem to increase the deficit between the total oil and gas production and total oil and gas consumption in the coming period. To overcome this situation, incentives should be given by Government of Indonesia immediately to increase the projects economics. The process of granting incentives, if possible, should not reduce state revenues. Using scenario analysis, this study finds that accelerate depreciation method does not have a big influence to economics of POD/POFDs when the POD/POFDs have high investment. When the investment to POD/POFDs was not too high, the accelerate depreciation will accelerate the investment return that eventually will increase the IRR and NPV values.

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