Energy, Utilities & Resources Statement of Capabilities
Our Indonesian Energy, Utilities and Resources (EU&R) practice comprises over
450 professionals across our lines of service - Assurance, Tax Services, Advisory,
Consulting and Legal Services. This large group of professionals has deep industry
knowledge providing us with the largest group of industry specialists in the Indonesian
As we write, the world still finds itself in the midst of the COVID-19 pandemic, and so we have decided not to do a full update of our Guide, but rather to focus only on the latest tax and regulatory changes that have occurred from when we issued our last Guide in the last quarter of 2019 up to the end of the third quarter of 2020. The updates have been provided in the form of a summary of changes presented at the beginning of each section. The impact of the COVID-19 pandemic and uncertainty in the macroeconomic situation are the biggest concerns for stakeholders in the oil and gas industry in Indonesia similar to their counterparts around the world. We have attempted to summarise the changes in key regulations the Government of Indonesia has issued as a response in these uncertain times.
Even before the outbreak of the COVID-19 pandemic, the energy industry had been undergoing profound technological disruption. The “fracking revolution”, the rise of renewable energy, improvements in battery storage, a strong push for a hydrogen economy and the electrification of transport represent opportunities for transformation as well as a fundamental competitive threat. These new technologies – combined with digitization – can bring new skill sets and cost efficiencies to the energy, utilities and resources (EU&R) sector, even before they open the door to new competitors. Seen in this context, COVID-19 represents one more challenge in the complex set of issues the EU&R sector has already been grappling with.
The oil and gas sector is making significant strides in digitization. After a few years of carrying out small-scale pilots, a number of oil companies are now leading the way. They have recruited chief digital officers, have designed digital strategies and established business units to promote them, have partnered with technology firms, and are striving to create a culture that nurtures new ways of working. We are witnessing a proliferation of technologies being deployed in the field, whether it’s the use of so-called digital twins to optimize production or drones carrying out offshore inspections.
This 10th edition of the PwC Indonesia "Oil and Gas in Indonesia - Investment and Taxation Guide" released in September 2019 outlines the latest tax and regulatory changes that have occurred in the oil and gas industry over recent years, including our views on recent regulatory developments surrounding the new “Gross Split” PSCs.
PwC Indonesia recently released its updated Indonesian Oil & Gas Concessions and Infrastructure Map.
The map provides information on 267 Oil & Gas blocks by operator (including Government blocks); the operator name, location, block name and contract type. Additional information on major oil and gas infrastructure across Indonesia is also presented on the map.
Please fill out the form here to request a hard copy of the map.
This 9th edition of the PwC Indonesia "Oil and Gas in Indonesia - Investment and Taxation Guide" released in May 2018 captures the latest tax and regulatory updates that have occurred in the oil and gas industry over the past year, including our early views on the new "Gross Split" PSCs.
The development of the oil and gas industry in Indonesia has been successful in many areas, including the pioneering of the Production Sharing Contract (PSC) model and the commercialisation of Liquefied Natural Gas (LNG). However, oil production has waned over recent years, with Indonesia's production and opportunity profile moving steadily away from oil and towards gas - a trend which is likely to continue.
Investment and Taxation Guide ─ 8th edition
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.
Investment and Taxation Guide – 7th edition
The 7th edition captures the latest tax and regulatory changes that have occurred in the oil and gas industry during the past two years.
The industry is arguably now in a transitional phase, with a growing domestic need for gas (both for consumers and industrial use), the commencement of LNG imports and the construction of further LNG regasification units - all amid chronically low crude oil prices. Indonesia’s production and opportunity profile has also moved steadily away from oil and towards gas - a trend which may ultimately represent a permanent shift. In short, the age of relative stability in this sector has probably passed. The pace of change is likely only to accelerate. It is hoped that this guide will provide readers with the information necessary to better understand these dynamics.
An investor survey of the Indonesian oil and gas industry - 8th edition
This is the eighth edition of our survey of the Indonesian oil and gas industry. The purpose of the survey is to help inform the public and private sectors about Indonesia’s petroleum industry and to highlight some of the challenges in attracting optimal investment and achieving its full potential. Where possible, we have compared current results with the results from prior surveys to highlight trends and to assess whether conditions are deteriorating or improving.
Global demand for affordable, reliable energy will continue to grow for the foreseeable future, but there is a new longer-term backdrop as the world transitions to a low carbon system. Companies in the oil and gas sector need to reconsider their portfolio and related capabilities to not only survive, but thrive, in this new future.
An investor survey of the Indonesian oil and gas industry – May 2015
This is the seventh edition of our survey of the Indonesian oil and gas industry, and where applicable we have analyzed the collective trends in survey participants’ responses using the current and prior reports. The survey responses come from 95 respondents from 75 different companies currently operating in the Indonesian oil and gas sector and therefore can be used to draw credible conclusions about the issues preventing the industry from reaching its full potential.
Investment and Taxation Guide – 6th edition
The 6th edition captures the latest tax and regulatory changes that have occurred in the oil and gas industry during the past two years. In particular, this edition covers the most recent developments related to GR 79, land and building tax and the new negative investment list. This publication has been written as a general investment and taxation tool for all stakeholders and those interested in the oil and gas sector in Indonesia. We have therefore endeavoured to create a publication which can be of use to existing investors, potential investors, and others who might have a more casual interest in the status of this important sector in Indonesia.
As outlined on the contents page, this publication is broken into chapters which cover the following broad topics:
The Top 40 mining companies have come out of the storms of 2020 in excellent financial shape.
Mining is one of the few industries that emerged from the worst of the COVID-19 pandemic economic crisis in excellent financial and operational shape. In fact, 2020 was a banner year for the mining sector. And things are expected to get even better for the world’s biggest mining companies.
Welcome to the eleventh edition of PwC Indonesia’s Mining in Indonesia: Investment and Taxation Guide.
Since the Law on Mineral and Coal Mining No. 4 of 2009 (the “Mining Law”) was
promulgated, various implementing regulations, including a number of amendments, havebeen issued by the Government in pursuing the goals of the Mining Law. Many challenges however still remain.
PwC Indonesia recently released its updated map of Indonesia’s Mining Areas. The map provides details of key coal and minerals mining operations in Indonesia, as well as the location of key mining infrastructure such as ports and coal-fired power plants.
Please fill the form here to obtain our latest Indonesian Mining Areas Map.
Welcome to PwC’s 16th annual review of global trends in the mining industry – Mine. This analysis is based on the financial performance and position of the global mining industry as represented by the Top 40 mining companies by market capitalisation.
We welcome you to the 10th edition of the PwC Indonesia "Mining in Indonesia: Investment and Taxation Guide" released in May 2018, which highlights the key regulatory and taxation considerations for investors in the Indonesian mining sector - a sector which continues to be a key contributor to Indonesian economic growth.
Since the new Mining Law was introduced in 2009 various implementing regulations, and subsequent amendments, have been issued by the Government in pursuing the goals of the Mining Law. In 2018 the Government has sought to reduce the overall bureaucracy by simplifying current regulations with an aim of attracting more investment.
PwC's 14th annual review of global trends in the mining industry is based on the financial performance and position of the global mining industry as represented by the top 40 global mining companies by market capitalisation.
2016 was a year of recovery for the world’s largest Top 40 mining companies, with profitability returning and balance sheet repair well underway.
Investment and Taxation Guide - 9th edition
Our guide has been written as a general investment and taxation tool for all stakeholders and those interested in the mining sector in Indonesia. We have therefore endeavoured to create a publication which can be of use to existing investors, potential investors, and others who might have an interest in the status of this important sector in Indonesia.
Review of global trends in the mining industry
2015 was a race to the bottom with many new records set by the world’s 40 largest mining companies according to the PwC’s annual Mine report.
The 13th in PwC’s industry series analysing financial performance and global trends, the report reveals a first ever collective net loss (US$27bn) for the top 40 miners with market capitalisation falling by £297bn (37%), effectively wiping out all the gains made during the commodity super cycle.
Investment and Taxation Guide - 8th edition
It is now more than seven 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.
Investment and Taxation Guide - 7th edition
It is now six years since the 2009 Law on Mineral and Coal Mining No.4 of 2009 (the "Mining Law") was promulgated, with the aim of maximising the benefits of the coal and minerals sectors for Indonesia. Various key implementing regulations, including related amendments, have been issued by the Government over the past five years to ensure that the ultimate goals of the Mining Law can be realised. However, over this period, stakeholders in the Indonesian mining industry have experienced various challenges in understanding and implementing the Mining Law and associated regulations.
In the past 30 years, electricity and gas markets around the world have been radically transformed as market forces play an increasing role in energy supply and distribution. Decarbonization, decentralization, and digitization are compelling utilities to evolve faster than ever before. How are they responding to this new, three-dimensional challenge?
Power and water market design varies significantly across the Middle East (ME), Africa and Asia. But policy-makers everywhere face the common challenge of ensuring outcomes are consistent with their policy targets and investment requirements. In many locations, water resources are stretched. And as power systems become more decentralised, the need to balance energy resilience with flexibility is adding a new tension to the central trilemma of reliability, affordability and sustainability.
PwC has released the findings of its 15th Global Power and Utilities Survey in November 2018. Between September and October 2018, we gathered the views of 118 power and utility company executives from over 100 companies and 56 different countries or territories in Europe, the Americas, Asia–Pacific, Middle East and Africa. The Europe region includes Russia.
Global energy transformation is gathering pace, driven by the twin forces of changing customer expectations and rapid technological evolution. In response, companies must undertake a strategic shift to prepare for new energy markets. Yet 82 percent of utility executives in our latest Global Power & Utilities Survey say their company is not yet ready for the transformation. In the meantime, new players from outside the sector are sizing up opportunities in energy markets around the world.
This Guide has been written as a general investment and taxation guide for all stakeholders and those interested in the power sector in Indonesia. We have therefore endeavoured to create a Guide which can be of use to existing investors, potential investors, and others with an interest in the status of this economically critical sector for Indonesia.
This edition of the Guide has been updated to reflect the regulations issued in late 2017 to mid 2018 (which are notably fewer and less substantial than last year). However, in this edition we have placed a greater focus on the tracking of actual transactions and project implementation, particularly in light of the wave of Power Purchase Agreements (“PPAs”) signed last year.
We hope readers find our comments on these developments helpful but reinforce the interpretational uncertainty that exists around the regulatory environment in Indonesia.
PwC Indonesia has released the 2018 update of its Map of Indonesia's Major Power Power Plants & Transmission Lines, providing the location of key existing and planned power plants and transmission lines in Indonesia.
Please fill the form here to obtain our latest Map of Indonesia's Major Power Plants and Transmission Lines.
PwC Indonesia has launched the second edition of the Power Industry Survey in association with the Independent Power Producers Association of Indonesia (“APLSI”) to better understand the current condition of the electric power industry in Indonesia, and the opportunities and challenges the future holds.
The survey covers Electricity planning; Investor confidence; Investor returns; Regulations; Energy policy and market design; and, many other trends and issues. This year, the survey identified a sharp deterioration in investor confidence given regulatory uncertainty around power tariffs and Power Purchase Agreement risk allocation. But, there is still intent to invest in the Indonesian power sector, and the survey highlights a number of potential solutions to further accelerate investment.
The 5th edition of PwC Indonesia's popular “Power in Indonesia: Investment and Taxation Guide” has been updated extensively for the substantial volume of regulatory and policy developments in 2017. The Guide provides a comprehensive overview of the key commercial and taxation considerations for investors in the Indonesian power sector, and should be of interest to existing industry players, potential investors, and others with an interest in the status of this economically critical sector for the development of Indonesia.
We hope readers will find our updates on these developments beneficial and we welcome queries on investing in the Indonesian power sector.
PwC Indonesia cooperated with the Independent Power Producers Association of Indonesia (ALPSI) to prepare this report to better understand the current condition of the electric power industry in Indonesia, and the opportunities and challenges for the future.
In furtherance of the development of the country’s power industry, this report is also aimed at acknowledging the role of the private sector in supporting the growth and reliability of the Indonesian electric power sector. This is in line with the country’s agenda of achieving an electrification target of 99.7% by 2025, under which at least 80.5 GW of power plants need to be constructed.
Investment and Taxation Guide – 4th edition
A comprehensive guide to the Indonesian power sector for both existing and potential investors and others with a general interest in the status of this economically critical sector for the development of Indonesia. Expanded and updated from previous editions to include details of the Government’s plans and a discussion of the trends in the conventional and renewable energy sectors.
GE Operations Indonesia (“GE”), in conjunction with PwC Indonesia, has produced a report on Private Power Utilities in Industrial Estates to understand their economic benefits.
Just a short time ago, there was a notable dose of optimism evident in the chemicals sector. Having confronted extraordinary pressures for more than a decade—chiefly from product commoditisation, raw materials volatility, fluctuating markets and rapidly expanding competition—2018 initially delivered some strong results. Profits were up, capacity was tight and global demand was on a positive trajectory.
Prodded by accelerating technology advances, which are shaping customer purchases and needs, some chemicals companies have begun to rethink their growth strategies, finally moving away from cost-cutting and retrenchment, toward more nimble, coherent, and aggressive business models. Timidity and contraction are giving way to new ways of navigating and benefitting from mergers and acquisitions, digital products and services, and even political forces affecting global trade. Although this trend is nascent, it is nonetheless significant and could place the chemicals industry on a path to improved performance in the short-term and offer better prospects for long-term growth.
Advisor, PwC Indonesia
Tel: +62 21 509 92901
Advisor, PwC Indonesia
Tel: +62 21 509 92901
Joshua R Wahyudi
Partner, PwC Indonesia
Tel: +62 21 509 92901