0. Private and Confidential
Review on Energy Opportunity in Indonesia
This document is confidential and is intended solely for the academic purposes only.
No copies shall be made without permission
Achmad Zaenal P
Hendratmi Susilowati
Rum Martani
Saptianta Ari Sabaris
Tri Fitriani
Yoga Wicaksono
07/266274/PEK/12183
07/263707/PEK/11603
07/266252/PEK/12161
07/266253/PEK/12243
07/266254/PEK/12163
07/2663/PEK/12243

1. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

2. Energy Demand vs Supply
Efficiency
Demand
Growth
World oil
shortfall scenarios
Transport
mode shifts
Pricing / taxes
City design/lifestyle
Past Production of Oil
Other petroleum fuels
gas, tar-sands
Other fuels
Forecast
Production
Deprivation, war
2008
Peak Oil: Impacts on MDGs
and options for Australia
Bruce Robinson, Convenor
15th March 2008 2

3. Energy Usage 3 Aktivitas Shell Energy Usage
(equal to Millions bbls per day)
Aktivitas
Shell 3

4. Oil & Gas Demand
February 2004
By 2015, we will need to find, develop and produce new oil and gas equal to eight out of every 10 barrels being produced today. 4

5. Oil Depletion
Blue is water, green is water and oil mixed
and red/purple is “dry” oil with little water in it
Ghawar is Saudi Arabia's and the world's biggest oilfield
If it is at peak, then global peak is probably very close
Peak Oil: Impacts on MDGs
and options for Australia
Bruce Robinson, Convenor
15th March 2008
4/24/2017 5:36:43 AM 5

6. Need on energy potential (oil and gas)
Alternative Energy
Need on energy potential (oil and gas)
Need on diversification of energy supplies

7. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

8. Oil In Indonesia Peak 1977 Peak 1995 700 600 500 400 300 200 100 8
Decline since1995
600
500
400
Millions BBLS per annum
300
200
100
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Chevron Pacific Indonesia
Other 8

9. Industry Updates

10. Indonesia Oilfield Development Indonesia Production Fact
Industry Updates
Upstream Catalyst
Indonesia is couple hundreds BOPD bellow OPEC quota.
Acquisitions are likely to be greenfield, which requires further cash flow for development
Indonesian onshore oil is well explored and western part of Indonesia is historically the larger oil producer
Indonesia does have plenty of Proven and Potential Recoverable Oil.
Indonesia Oilfield Development
Indonesia Production Fact
New potential prospects in Indonesia are more likely to be located offshore, implying higher capital needs
Indonesia’s oil production has declined from 1,6Mbbl.day in 1994 to 969,000bbl/day in 2007
Regulator strive to increase and prepare a set of supportive regulation to help increase production

11. Consecion & Production by Acreage
Industry Updates
Upstream Catalyst
Consecion & Production by Acreage
Pertamina has the biggest acreage in Indonesia, however it produces the less compare to PSC
It shows that Pertamina still have lost of Potential in its Field
Pertamina Upstream has 64 oil and gas contracts of joint operation arrangements.:
6 JOB-EOR contract systems
12 JOB-TAC contract systems
34 TAC contract systems
12 other
Pertamina’s Partner
Among 64 of oil and gas contracts within the joint operation arrangement, only 30 contracts are in the commercial-producing stage and the other areas are still in the exploration stage.
More than 50% TAC are not properly operated, due to:
Lack of fund
Bank Loan
No implementation on the proper technology and using right resource

12. PSC Fiscal Term Production 100% (-) Investment Credit FTP 20 %
Max Cost
Recovery
Equity To Be Split
Indonesia Share
Contractor Share
DMO
DMO Fee
Taxable Income
Tax 44 %
Contractor Take
Indonesia Take
(-)
(+)

13. TAC Fiscal Term Gross Production SO NSO (-) (+) Pertamina Share
Investment Credit
Taxable Income
Contractor Take
Gross Production SO
Equity to be Split
Contractor Share
NSO
Pertamina Share
Tax
Pertamina Take
Indonesia Take
Tax 44 %
DMO Fee
DMO
Cost Recovery
(-)
(+)

14. Declining in Investment
Source : 2005 Schlumberger Information Solution

15. Declining in Investment
Fiscal Regime in Indonesia not attractive enough compare with other countries (based on Price Water House’s Survey)
Source : 2005 Schlumberger Information Solution

16. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

17. Oil and Gas Operation - Hydrocarbon
Hydrocarbon = 85% of Carbon (C) + 15% Hydro (H)

18. Oil and Gas Operation - EOR
Enhanced Oil Recovery (EOR) merupakan teknik lanjutan untuk mengangkat minyak jika berbagai teknik dasar sudah dilakukan tetapi hasilnya tidak seperti yang diharapkan atau tidak ekonomis.

19. Oil and Gas Operation – Lifting Process

20. Alternative Energy Source

21. Alternative Energy Source - CBM
Coal Bed Methane Fuel  green electricity for power plant
In China : CBM used vehicle and it can reduce 50% of oil consumption
There is no producing field in Indonesia, exploration is conducted by some companies (Medco pilot project at Rambutan field and Vico at …field, etc)
Estimated Indonesian CBM Deposit : ± 453,3 TCF ( trillion cubic feet )
It is high investment regarding the process (dewatering cycle takes ± 2 years
CBM Production stage
Source :

22. Alternative Energy Source - CBM
Estimate Indonesian CBM Deposit
Medco Rambutan Field

23. Alternative Energy Source - CBM

24. Alternative Energy Source - Geothermal
Geothermal energy is a source of heat energy contained in hot water, water steam and rocks together with associated minerals and other gases that cannot be separated genetically from one another in a geothermal system and a mining process is needed for its utilization.
Coal : USD / kWh
Geothermal : USD / kWh
Oil/gas : USD / kWh
In producing electricity per kWh, it requires such cost :
Other facts :
Clean, renewable, and environmental friendly energy than coal
Geothermal Potential :
40 % of the world potential
Equivalent with 27,140 MW
219 billion of Oil Barrel
Current capacity : 3.8% of total potential

25. Alternative Energy Source - Geothermal
Direct Use of Geothermal

26. Alternative Energy Source – Bio Fuel

27. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

28. Domestic Political Environment
Existing Oil and Gas Industry
Debate on UU Migas No 22 tahun 2001 (BP MIGAS)
LNG pricing phenomenon ; LNG Tangguh ( USD 3.3 /MMBTU) vs LNG Arun & Bontang (USD 17 / MMBTU)
Some of contract area are still attracting investor (G&G point of view)
Indonesian political Stability, uncertainty factor and regulatory risk is high for Investor (PWC / Schlumberger research on it)
Alternative Energy
Regulator...?
Political will in alternative energy...?
Infrastructure...?

29. DIT. GEN. OIL AND GAS/IMPLEMENTING BODY
Domestic Political Environment
DIT. GEN. OIL AND GAS
DIT. GEN. OIL AND GAS/IMPLEMENTING BODY
POST CONTRACT
CONTRACT
PRE CONTRACT
CURRENT CONDITION
(AFTER UU 22/2001)
PAST CONDITION
(BEFORE UU 22/2001)
DIT. GEN. OIL & GAS
FUNDAMENTAL
DUTIES & FUNCTION
According to
Pres. Decree No. 165 of 2000
and others related
Regulation
PERTAMINA
Imp. Body
PT. PERTAMINA
(PERSERO
Reg. Body
Upstream
Function
Downstream
Pertamina
LAW No.8 of 1971
Gov. Upstream Function
Gov. Do.stream Function
Pre Contract, Contract
and Post Contract
Gov. Downstream
Fuction
LAW 22/2001 CONCERNING OIL & GAS
Source : Schlumberger Information System

30. Fiscal Term (MIGAS) Petroleum Fiscal Arrangements Contractual Systems
Concessionary Systems
Risk Service Contracts
Pure Service Contracts
Prod. Sharing Contracts
Service Contracts
(Flat fee arrangement - state
assumes the risk; i.e. Mideast)
(Profit arrangement)
(Cash fee)
(“in-kind” fee)
(Allows private ownership)
(State retains ownership)

31. Government Revenue - Oil

32. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

33. Regional Economy Existing Oil and Gas Industry Alternative Energy
The Fiscal Term / Business Model in Oil and Gas have been developed. Many adjustment and models are applied in Indonesia (PSC, KSO, TAC, JOB, JOA).
Oil :
Local Gov Take : 15.5 %
Cent Gov Take : 84.5%
Gas :
Local Gov Take : 30.5 %
Cent Gov Take : 69.5%
The basic model of Split revenue related to local autonomy in Oil and Gas industry
Alternative Energy
The Fiscal Term / Business Model in alternative energy has not developed as well as in Oil Industry. The regulator should accommodate and develop fiscal term in generating production in alternative energy to increase investment both FDI and Local Investment
Opportunity in alternative energy business should trigger the increase in regional economy

34. Natural Environment
PROPER - Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup
In Oil and Gas Industry :
Source : Men KLH

35. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

36. Natural Environment
PROPER - Peringkat Kinerja Perusahaan dalam Pengelolaan Lingkungan Hidup
Source : Men KLH
2008
GREEN : Total E&P Indonesie (Handil, Tatun, Tunu), VICO - Nilam Asset , Premier Oil Natuna Sea, BP West Java dan Star Energy.
BLUE : 40 fields of PSC
RED : 6 fields of PSC
BLACK : 1 (Kalrez Petroleum) => Sludge and poisonous waste.

37. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

38. CSR in Oil and Gas Industry as Stake holder Obligation
Social Environment
Existing Oil and Gas Industry
Corporate Social Responsibility is no longer operating cost of the business unit, it include the 17 of negative lists that not entitled to petroleum operation
It is under corporate responsibility on cost of Community development and CSR
CSR in Oil and Gas Industry as Stake holder Obligation

39. Agenda Introduction Indonesian Updates (Ind) Oil and Gas Industry
World Supply and Demand Energy
Challenge of Energy Demand
Alternative Energy
Indonesian Updates (Ind)
Industry Updates
Fiscal Term (business model)
Declining in Oil and gas Investment
Oil and Gas Industry
Hydrocarbon, EOR, Lifting Process
Alternative Energy Potential
Alternative Energy Potential – CBM
Alternative Energy Potential – Geothermal
Alternative Energy Potential – Bio Fuel
GBE related to Energy Industry
Domestic Political Environment
Regional Economy
Natural environment
Social Environment
Summary

40. Summary

41. End of presentation
Go Green: “ the most expensive and valuable gift for your future…”