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Fiscal Term, Cost Recovery

dan Iklim Investasi


Oleh:
Taslim Yunus
THE TRADE-OFF

FISCAL
POLITICAL
TERM
CONDITIONS
GEOLOGICAL
CONDITIONS
CLASSIFICATION OF
PETROLEUM FISCAL SYSTEMS

PETROLEUM FISCAL ARRANGEMENTS

CONCESSIONARY SYSTEMS CONTRACTUAL SYSTEMS


Tax & Royalty

Service Contracts Production Sharing Contracts

Pure Service Risk Service


Contracts Contracts
RESOURCE RENT

Bonuses
T R Royalties
G O P E Production
GOVERNMENT TAKE
R T R N Sharing
O A O T Taxes
S L F Government
I T C Participation
S CONTRACTOR TAKE
O O E
T
T N N
R C A T T
E O R OPERATING COSTS
L R I
V S E A T
E T C C C L
N O DEVELOPMENT COSTS
O T E
U V S O M
E E T R E
S R EXPLORATION COSTS N
Y * T

* Total cost from the perspective of the government


Features of the Norwegian Petroleum Tax
System

Historically:
The system has developed to handle the challenges of a
continuously changing industry.

Todays system:
28% corporation tax
50% special petroleum tax

Ministry of Petroleum and Energy


Tax incentives
Full consolidation of income and expenses
No ring fencing across licenses

No signature bonuses

No royalty

All expenses are tax deductible

Investments are depreciated at a high rate (6 years)

Financial costs may be deducted against both the corporation tax and the special
tax.

Uplift allowance against special tax. May deduct 30% of the investment (7.5 %
each year over 4 years).*

Losses may be carried forward with a risk free interest, and is reimbursed if
activities cease.*

Companies outside tax position may each year claim reimbursement of the tax
value of exploration expenses from the Government.*

Ministry of Petroleum and Energy


Calculating taxes (simplified)

Company level taxation

Operating income (norm price on oil)


- Operating expenses
- Capital expenses depreciation (linear over 6 years)
- Exploration costs, R&D,
abandonment/decommissioning
- CO2-tax, Area fee, (Royalty)
- Net financial costs
Ordinary tax 28% = Ordinary corporation tax base
- Uplift (7,5% of investment for 4 years)
Special tax 50% = Special tax base

Ministry of Petroleum and Energy


Contract of Work

PRODUCTION
100%

COST

E T S

INDONESIA CONTRACTOR
65% 35%

DMO : 25%
PSC - INDONESIA : 3rd. GENERATION

PRODUCTION 100%
INV. CREDIT
FTP : 20%

COST OIL MAX: 80%


T A X : 48%
E T S

INDONESIA 71.15% CONTRACTOR 28.85%

DMO FEE
1st 5 Years : Export Price TAX : 48%
Afterwards : 10% Export Price DMO : 25%
Indonesia Share and
Its Percentage Of Gross Revenue
25 70
Indonesia Share (Billion US$)

Average 63 % Per Year


68

% Indonesia Share
20 66
64
15
62
60
10
58
5 56
54
0 52
2000 2001 2002 2003 2004 2005 2006

Indonesia share % IS Thd GR


Cost Recovery dan Profit Margin
1802* 1630*
7000 90
6000 80
70
5000

Percentage
60
MM US$

4000 50
3000 40
30
2000
20
1000 10
0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Cost Recovery Profit margin


* Pertamina EP
Perbandingan Cost Recovery Minyak
(US$/bbl) Dunia vs Indonesia
Finding Cost Lifting Cost Total
REGION Percent
2004 2005 2004 2005 2004 2005
Change
United States
Onshore -- --
Offshore -- --
Total United States 10.33 9.79 4.38 5.39 14.71 15.18 3%

Foreign
Canada 26.07 16.46 5.15 6.98 31.22 23.44 -25%
OECD Europe 12.16 9.7 4.54 5.71 16.70 15.37 -8%
Former Soviet Union and
Eastern Europe 4.3 13.00 5.74 5.21 10.04 18.21 81%
Africa 7.55 15.25 4.06 4.09 11.61 19.34 67%
Middle East 6.76 4.67 4.36 4.81 11.12 9.48 -15%
Other Eastern Hemisphere 6.18 8.98 4.26 3.74 10.44 12.72 22%
Other Western Hemisphere 4.98 25.06 1.88 3.17 6.86 28.23 312%
Total Foreign 8.3 11.76 4.25 4.91 12.55 16.67 33%

Worldwide Total 9.18 10.73 4.31 5.13 13.49 15.86 18%

Indonesia *) 9.17 9.28 1%

Sumber Data : Energy Information Administration, US Departement of Energy, Dec 2006


Tidak termasuk Pertamina
Perbandingan Biaya (Cost Recovery) Rata-Rata
Antara Perusahaan Migas Dunia
Terhadap KKKS Indonesia
16 RD Shell

15

14

13 Chevron

Cost ($/boe) 12 ConocoPhillips


ExxonMobil
BP
11

10

9 TOTAL

8
KKKS Indonesia
7

6
2002 2003 2004 2005

Source: Total E&P, Paris


estimates based on company reports (preliminary figures for 2005)
technical costs : consolidated subsidiaries (FAS 69)
Perbandingan Biaya (Cost Recovery)
Antara Berbagai Negara

9.2
Indonesia

12
Angola
12

China
13

US Onsh
16

Rusia
25

GOM
30

Canada

0 5 10 15 20 25 30 35

Cost ($/bbl) Source: OPEC


Unrecovered Cost
Non Producing Blocks
0
-500
-1000
-1500
Juta US$

-2000
-2500
-3000
-3500
-4000
-4500
2000 2001 2002 2003 2004 2005 2006
Confidence in Prospectivity
1. Indonesia Prospectivity is good. CEOs and Explorationists continue to believe in Indonesia
prospectivity & materiality.
PwC survey (Indonesia 2005) of Indonesia players.
Robertson's International (U.K.) NV Survey (E&P 146 countries). For the period 1999-2004, indicated
much higher interest in Indonesia than depicted by general global FDI ranking, even during 1998-2003!
Robertson's International (U.K.) New Ventures Survey polls E & P companies worldwide with ventures
outside North America and asks them to rate, in a confidential questionnaire, their level of interest in
new ventures in 146 countries. Up to 2004, Indicates much higher interest than depicted by general
global FDI ranking!

Robertson's International E&P New Ventures Survey


2004 - Ranking 2003 - Ranking 2000 - Ranking 1999 - Ranking 1996 - Ranking

1 UK 1 UK 1 Libya 1 Brazil 1 UK
2 Libya 2 Australia 2 Iran 2 Venezuela
2 Australia
3 Indonesia
3 Iraq 3 Libya 3 UK
Trinidad & Tobago 4 Australia 3 Iran
4 Algeria 4 Qatar UK 4 Algeria
5 Algeria 4 Indonesia 5 Australia
5 Egypt 5 Algeria 6 Colombia
6 Australia 5 Libya
6 Equatorial Guinea 6 Iraq 6 Algeria
Iraq 7 Argentina
7 Brazil
7 Indonesia 8 Peru
8 Kazakhstan 7 Indonesia 7 Angola
9 Equatorial Guinea 8 Brazil 8 Angola 8 Argentina 9 Angola
Iran 9 Gabon 9 Brazil 9 Egypt
10 Tunisia Gabon 10 Iraq
11 Morocco 10 Tunisia 10 Egypt 10 Venezuela

Source: Robertson International

IPA study on competitive fiscal terms IPA Workshop Feb 20, 2006 17
# Sumur Explorasi

50
100
150
200
250
300

0
1967

1970

1973

1976

1979

1982

1985

1988

Tahun 1991

1994

1997

2000

2003

2006
Jumlah Pemboran Eksplorasi

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