PROPOSED TAX ON GROSS SPLIT CONTRACT IN HYDRAULIC FRACTURING COAL BED METHANE RESERVOIR WELL X

• Main Author: OKTAVIANI (NIM: 22215024), LISA
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/28619
• Institution: Institut Teknologi Bandung

The demand of oil and gas in Indonesia is increasing, while the production is decreasing since 1960. Coalbed Methane is a non-conventional resource that can be one of the resources to fulfilled the demand. However, the exploitation of CBM well is undesirable since the production is relatively less compared to conventional <br /> <br /> reservoir. Gross Split contract includes incentives to attract investor to invest in such reservoir, however the income tax charged to investor still quite high that may reduce the investor’s profit. <br /> <br /> <br /> The treatment of Hydraulic fracturing on well X increased the production. The IRR shows that the project is economically feasible with the biggest IRR 31% on <br /> <br /> hydraulic fracture half-length target (xf) 200 ft. Then, we calculate the Gross Split contract base on gas production, and the result shows that the split for the <br /> <br /> government is 31.6% while for the contractor is 39.9%. However, the NPV for the contractor is negative with 40% of income tax, which is means the contractor will not interest to invest. Based on Government Regulations, PP no 27/2017, which includes the regulation of fiscal incentives, then we conduct the sensitivity of the <br /> <br /> income tax. The result shows that the amount of the tax for the target xf = 200 ft to 400 ft is between 10-15%, and for the target xf = 100 ft is less than 5%.