The eighth edition of PwC Indonesia Oil and Gas in Indonesia ─ Investment and Taxation Guide 2017 captures the latest tax and regulatory changes that have occurred in the oil and gas industry during the past two years. Oil and gas production has a long and relatively successful history in Indonesia, with the sector historically characterized by its relatively stable and well-understood regulatory framework. In many years, including the development of the Production Sharing Contract (PSC) model and the commercialization of Liquefied Natural Gas (LNG), Indonesia has been an international pioneer.
It is now more than eight years since the 2009 Law on Mineral and Coal Mining No. 4 of 2009 (the “Mining Law”) was promulgated. While various implementing regulations, including a number of amendments, have been issued by the Government in pursuing the goals of the Mining Law, there remain many challenges for investors, particularly in the current low commodity price environment.
These challenges apply for holders of both contracts of Work (“CoWs”) and Coal contracts of Work (“CCoWs”) issued under the pre-2009 mining regime, as well as holders of Mining Business Licences (Izin Usaha Pertambangan, or “IUPs”) issued under the new regime