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.
For many years, the regulatory hurdles and bureaucratic processes associated with approval of developments expenditures have been highlighted as key barriers to investment in the Indonesian oil and gas sector. During 2017 and earlier this year, the Government has sought to reduce the overall bureaucracy with steps aimed at simplifying the current regulations and providing more clarity on key areas of uncertainty such as fiscal terms, including the introduction of the new "Gross Split PSC" concept in early 2017. The success of these reforms in attracting new investment is yet to be seen.
We hope this 9th edition of our Guide proves to be a useful resource to all those interested in the oil and gas industry in Indonesia as they consider their investment opportunities in the sector. Please contact PwC Indonesia's Oil & Gas specialists to discuss further.