PROPOSED DEEP WATER FISCAL TERM TO ATTRACT OIL AND GAS INVESTMENT IN INDONESIA

• Main Author: AFANDI (NIM 29115334), MARUF
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/22991
• Institution: Institut Teknologi Bandung

Nowadays, Indonesia are facing high demand of Energy for developing the country. <br /> <br /> <br /> Energy Consumption are increasing both for domestic and industrial purposes, while <br /> <br /> <br /> energy supply from oil and natural gas is declining due to marginal production fields <br /> <br /> <br /> and naturally decrease rate of production, meanwhile Renewable Energy is still growing <br /> <br /> <br /> but not yet able to cover Indonesia's energy needs, it is necessary to develop new oil and <br /> <br /> <br /> gas working areas that have promising potential oil and gas. As we know that most <br /> <br /> <br /> potential Oil and gas resources are currently in the deep water (> 500m water depth) and <br /> <br /> <br /> still have a minimum of supporting infrastructure. <br /> <br /> <br /> In this study aims to provide Fiscal Term proposals in which optimal state revenues are <br /> <br /> <br /> achieved, and attractive investors to conduct Deep Water Exploration and Exploitation <br /> <br /> <br /> activities. There are four (4) Factors that it should be considered. They are Contractor <br /> <br /> <br /> Profit Split (pre-tax 80% for the contractor), Domestic Market Obligation (DMO Holiday <br /> <br /> <br /> for 10 years), Tax Holiday for 7 years) as well as providing Investment Credit by 20%. <br /> <br /> <br /> The value of each factors, will depend on the characteristics of each project is calculated. <br /> <br /> <br /> Minimum recoverable Reserve is obtained. The simulation in this research is only as a <br /> <br /> <br /> model to get a general benchmark in the development of deep water exploration. <br /> <br /> <br /> Based on the economic simulation results by including the above four factors, it is found <br /> <br /> <br /> that the world oil price is around 50 US $ (at present), it is very difficult for Investor to <br /> <br /> <br /> develop Deep-water Project. The total value of the project is negative with the highest <br /> <br /> <br /> IRR level of ~ 8%, while with world oil price in the range of 100 US $, the economics of <br /> <br /> <br /> Deep-water project is interesting with IRR reach ~ 16%. With IRR values in these two <br /> <br /> <br /> price ranges, then with oil prices ranging from 75US $, the economic value can still be <br /> <br /> <br /> positive with attractive fiscal term added.