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F:/Boss/Kabppka/Gtw03/Jk

Acquisition

III.3. OPERATING COST PSC VERSUS GENERAL ACCEPTED ACCOUNTING PRINCIPLE (GAAP)

Exploration

Production

Development

Marketing

Operating Cost of Production Sharing Contract

General Accepted Accounting Principle – Success Full Effort or Full Costing

Operating Cost means expenditures made and obligation incurred in carrying out Petroleum Operation (exploration, development, extraction and production) hereunder determined in accordance with generally accepted and recognized accounting systems (GARAS) consistent with modern petroleum industry practices

SP Utomo - Petrominer - OSC Workshop - Slide 05

SP Utomo - Petrominer - OSC Workshop - Slide 05

III. 4. COST STRUCTURE AND REVENUE SPLIT

CAPITAL

COST

UNREC.COSTS

OPERATING COSTOPERATING COST

GROSS REVENUERECOVERY OF

OPERATING COST

Contractor ShareIndonesia Share

Sharing Mechanism

PRICELIFTING

PRIOR YEARSUNRECOV.COSTS

NON CAPITALCOSTS

DEPRECIATION

EXPENDITURESEXPENDITURES

EXPLORATION & DEVELOPMENT-G&G Studies-Drillings-Explor-Administration

PRODUCTION-Direct Prod - Oil-Direct Prod - Gas-Gas Processing-Utilities & Auxiliaries-Field Office, Services& General Admin

GENERAL & ADMINISTRATION-Finance Administration-Engineering Services-Material Services-Transportation Costs-Personal Expenses-Public Relation-Community Development-General Office Expenses-Home Office OH- Interest on Loan

SP Utomo - Petrominer - PSC Workshop - Slide 06


COST STRUCTURE AND REVENUE SPLITCOST STRUCTURE AND REVENUE SPLIT

BP-MIGAS Share

Gross Revenue

CONTRACTOR Share

DMO

IndonesiaShare Total Contr.Share

Net Contr.Share

Rec.Oper Cost

Rec.Operating Cost

Equity to be Split

DMO Fee

Gov’t Tax

FTP20%

28.85%

25%x28.85%

71.15%

48%

PSC

INCOME TAX AND FINAL TAX ON PROFIT

1.Contractor Gross Income(+) Recovery of Operating Cost(+) FTP & Equity Share(-) DMO(+) Fee DMO(+/-) Over/Under Under Lifting

2. Cost/Tax Deductions- PSC Operating Cost- Non PSC Cost

3. Taxable Income (1) – (2)Tax Payments:- Income Tax- Dividend/Branch Profit Tax

OTHERS TAXES AND LEVIES

SP Utomo - Petrominer - PSC Workshop -Slide 07 5

TAC SPLIT CALCULATIONTAC SPLIT CALCULATION


AssumesLifting 5.000 bbl, ICP $40/bblOperating costs $100.000, DMO new oil

1.500350875-437

2.288

Contractor Entitlement :1. Rec.Operating Cost – max

35%2. FTP Share – 35%x1.000 bbl3. Equity Share -35%x2.500 bbl4. (-)DMO -35%x25%x5.000 bbl5. Total Entitlement

Total Lifting5.000

FTP -20%1.000

Operating Cost1.500

Equity to be Split2.500

Contractor Share788

PERTAMINA Share2.275

DMO437

PERTAMINA Entitl.2.712

Contractor Entitl2.861

650

350Pertamina Entitlement :

1. FTP Share –658%x1.000 bbl2. Equity Share -65%x2.500 bbl3. (-)DMO -35%x25%x5.000 bbl4. Total Entitlement

6501.625

4372.712

Add. Cash Payment Calculation :

1. BP- $40/$10.8x$5=$9.26 –EP=$30.74

2. EP value –(100-25%-35%)x5000x$30.74

3. Add. Cash Payment (85%-65%)x$92.220

4. Fee DMO -437x$0.20

91.520

108.480

92.22018.444

-87

Total Indonesian Share

Total Contractor Share

18.357

127.107

72.893

X.12. COST STRUCTURE AND REVENUE SPLITX.12. COST STRUCTURE AND REVENUE SPLIT


1. Production1. Production2. Price US$/B/MCF2. Price US$/B/MCF3. Gross revenue MMUS$3. Gross revenue MMUS$4. FTP4. FTP5. Investment Credit5. Investment Credit6. Operating Cost6. Operating Cost7. Equity to be Split7. Equity to be Split

1.7961.7965050

107.73107.7300

21.54621.54618.23318.23356.74556.74511.20711.207

ECONOMIC FIELD DEVELOPMENT BASE ON PSC REGIMEECONOMIC FIELD DEVELOPMENT BASE ON PSC REGIME

1.1.Contractor ShareContractor Share2.2.DMO – GrossDMO – Gross3.3.DMO – Fee AdjustmentDMO – Fee Adjustment4. 4.

Investment CreditInvestment Credit5. 5.

Taxable IncomeTaxable Income6. 6.

Gov. Tax EntitlementGov. Tax Entitlement7. 7.

Net Contractor ShareNet Contractor Share8. Operating Cost 8. Operating Cost 9. Total Contractor 9. Total Contractor

ShareShare

4.1914.1915050

251.43251.4300

50.28650.286

31.84431.844169.30169.30

00

3.5933.5935050

215.58215.5800

43.11643.116

29.45429.454143.01143.01

00

3.0833.0835050

184.98184.9800

36.99636.996

25.18525.185122.79122.79

99

2.6512.6515050

159.03159.0300

31.80631.806

50.88950.88976.33576.335

2.2832.2835050

136.98136.9800

27.39627.396

10.27410.27499.31199.311

2.0882.0885050

125.28125.2800

25.05625.056

10.44010.44089.78489.784

1.9531.9535050

117.18117.1800

23.43623.436

9.7659.76583.97983.979

1.8281.8285050

109.68109.6800

21.03621.036

9.1409.14078.60478.604

1.5361.5365050

92.13092.13018.42618.426

7.6787.67866.02766.027

9.4489.448-9.448-9.4489.4489.44818.23718.23727.68027.680

--13.213.28787

14.39414.39456.74556.74571.13871.138

63.36263.362--

18.118.13232

18.13218.132

63.34263.342--

30.430.40404

32.93832.93831.84431.84464.78264.782

31.19431.194--

11.411.46969

11.46911.469

31.19431.194--

14.914.97373

16.22116.22150.88950.88967.11067.110

46.09546.095--

13.313.34040

13.34013.340

46.09546.095--

22.122.12525

23.69623.69625.18525.18549.15449.154

53.69053.690--

15.515.54747

15.54715.547

53.69053.690--

25.725.77171

27.91927.91929.45429.45457.37357.373

29.00229.002-7.910-7.9101.9771.977

23.07023.070--

11.011.07373

11.99611.9969.1409.14021.13621.136

30.89530.895-8.450-8.4502.1132.113

24.64724.647--

11.811.83131

12.81712.8179.7659.76522.58222.582

33.12733.127-9.035-9.0352.2592.259

26.35126.351--

12.612.64848

13.70313.70310.44010.44024.14324.143

36.55036.550-9.878-9.8782.4702.470

29.14129.141--

13.913.99898

15.15315.15310.27410.27425.42725.427

24.36124.361-6.644-6.6441.6611.661

19.37819.37800

-9.302-9.30210.07710.0777.6787.678

17.75417.754

DESCRIPTIONDESCRIPTION 11stst Yr Yr

1.1.Indonesian ShareIndonesian Share 36.59236.592

22ndnd Yr Yr 33rdrd Yr Yr

186.64186.6488

158.20158.2077

111.55111.5533

135.82135.8266

91.92091.920 88.54488.544 74.37674.376101.13101.1388

94.95894.958

1.Expenditures1.Expenditures2.Current Cash Flow2.Current Cash Flow3. NPV - i=10%3. NPV - i=10%4. IRR (%)4. IRR (%)

137.18137.1822--

66.066.04444

16.76216.76248.02048.020

9.7659.76512.81712.817

10.04010.04013.70313.703

13.87413.87435.28135.281

14.37214.37243.00143.001

7.6787.67810.07110.07158.21158.211

26.526.5

10.27410.27415.15315.153

11.92711.92755.18355.183

9.1409.14011.99611.996

44thth Yr Yr 55thth Yr Yr 66thth Yr Yr 77thth Yr Yr 88thth Yr Yr 1010thth Yr Yr99thth Yr Yr


1. Production1. Production2. Price US$/B/MCF2. Price US$/B/MCF3. Gross revenue MMUS$3. Gross revenue MMUS$4. FTP4. FTP5. Investment Credit5. Investment Credit6. Operating Cost6. Operating Cost7. Equity to be Split7. Equity to be Split

1.8421.8426060

110.52110.5200

--38.638.68282

71.83871.838

ECONOMIC FIELD DEVELOPMENT BASE ON TAC REGIMEECONOMIC FIELD DEVELOPMENT BASE ON TAC REGIME

1.1.Contractor ShareContractor Share2.2.DMO – GrossDMO – Gross3.3.DMO – Fee AdjustmentDMO – Fee Adjustment4. 4.

Investment CreditInvestment Credit5. 5.

Taxable IncomeTaxable Income6. 6.

Gov. Tax EntitlementGov. Tax Entitlement7. 7.

Net Contractor ShareNet Contractor Share8. Operating Cost 8. Operating Cost 9. Total Contractor 9. Total Contractor

ShareShare

2.2002.2006060

132.00132.0000

--46.246.20000

85.80085.800

2.9942.9946060

179.64179.6400

--62.862.87474

116.76116.7666

2.6342.6346060

158.04158.0400

--43.943.98888

114.04114.0422

2.3182.3186060

139.08139.0800

--35.835.80808

103.27103.2722

2.0382.0386060

122.28122.2800

--29.729.76969

92.60192.601

1.7921.7926060

107.52107.5200

--26.926.99696

80.52480.524

1.5761.5766060

94.56094.560

--21.321.38282

73.17873.178

1.3861.3866060

83.16083.160

--18.618.67575

64.48564.485

1.2181.2186060

73.08073.080

--16.816.80606

56.27456.27410.77610.776-4.145-4.145

414414

7.0467.046-3.382-3.3823.6643.66438.68238.68242.43642.436

12.87012.870-4.950-4.950

495495

8.4158.415-4.039-4.0394.3764.37646.20046.20050.57650.576

15.49115.491-5.216-5.216

522522

10.79710.797-5.182-5.1825.6145.61435.80835.80841.42341.423

17.10617.106-5.927-5.927

593593

11.77211.772-5.651-5.6516.1226.12243.98843.98850.12050.120

17.51517.515-6.737-6.737

674674

11.45211.452-5.497-5.4975.9555.95562.87462.87468.82968.829

9.6739.673-3.119-3.119

312312

6.8666.866-3.296-3.2963.5703.57018.67518.67522.24522.245

10.97710.977-3.546-3.546

355355

7.7857.785-37.37-37.374.0484.04821.38221.38225.43025.430

12.07912.079-4.032-4.032

403403

8.4508.450-4.056-4.0564.3944.39426.99626.99631.39031.390

13.89013.890-4.586-4.586

459459

9.7639.763-4.686-4.6865.0775.07729.99629.99634.75634.756

.441.441-2.741-2.741

274274

5.9755.975-2.868-2.8683.1073.107

16.80616.80619.91319.913

DESCRIPTIONDESCRIPTION 11stst Yr Yr

1.1.Indonesian ShareIndonesian Share 68.17468.174

22ndnd Yr Yr 33rdrd Yr Yr 44thth Yr Yr 55thth Yr Yr 1010thth Yr Yr99thth Yr Yr88thth Yr Yr77thth Yr Yr66thth Yr Yr

81.42481.424 110.81110.8111

87.52487.524107.92107.9200

97.65797.657 60.91560.915 53.26753.26776.13076.130 69.13069.130

1.Expenditures1.Expenditures2.Current Cash Flow2.Current Cash Flow3. NPV - i=10%3. NPV - i=10%4. IRR (%)4. IRR (%)

78.21878.218-2.254-2.254

45.58645.5864.9904.990

19.35619.3566.0746.074

25.63225.6325.7585.758

37.79237.79212.32812.328

43.02043.02025.80925.809

15.40815.4084.5054.505

13.54313.54319%19%

27.21227.2127.5447.544

33.22033.2208.2038.203

17.25617.2564.9894.989

SP Utomo - Petrominer - PSC Workshop - Slide 06


Thru 198445.0%20.0%56.0%

Ordonantie 1925KMK 267/012/1978

Income TaxTax on PBDR or Branch ProfitTotal

Reference

When a partner in a PSC is subject to a tax treaty with a foreign country tax regime, the rate of Tax on Interest, Dividend and Royalty or Branch Profit Tax may be so affected that the total tax rate changes to a lower rate.Example of 10% Rate of Tax on Interest, Dividend and Royalty or Branch Profit tax due to tax treaty:

INCOME TAX AND FINAL TAX ON PROFITINCOME TAX AND FINAL TAX ON PROFIT

1985-199435.0%20.0%48.0%

UU PPH No.7/1984 KMK 458/012/1984

After 199530.0%20.0%44.0%

UU PPH No.10/1994

Income TaxTax on PBDR or Branch ProfitTotal

Reference

45.0%10.0%50.5%

Ordonantie 1925KMK 267/012/1978

35.0%10.0%41.5%

UU PPH No.7/1984 KMK 458/012/1984

30.0%10.0%37.0%

UU PPH No.10/1994

- The application of tax treaty result in lower net after tax shares for government - Some, including new contracts revise production splits to have the same net after tax shares

INCENTIVE PACKAGE FOR INDONESIAN PRODUCTION SHARING CONTRACT

DESCRIPTIONDESCRIPTION BEFORE BEFORE INCENTIVEINCENTIVE

INCENTIVEINCENTIVEI (Aug 1988)I (Aug 1988)

INCENTIVEINCENTIVEII (Feb II (Feb 1989)1989)

INCENTIVEINCENTIVEIII (Aug III (Aug 1992)1992)

INCENTIVEINCENTIVEIV (Jan IV (Jan 1994)1994)

OIL FIELDa. Development Before August 1992Conventional-Standard Conventional-MarginalConventional-Tertiaryconventional-Pre Tersier

Frontier-MarginalFrontier-TertiaryFrontier-Pre tertiary

85/1580/2080/20Up to 50 mbcd-80/2051-150 mbcd 85/15Up 150 mbcd 90/10

65/3565/35Singgle split 65/35


75/2580/20Up to 50 mbcd -75/2551-150 mbcd 80/20Up 150 mbcd 85/15

85/1585/1585/1585/15

85/1585/1585/15

85/1585/1585/1585/15

85/1585/1585/15


75/2580/20Up to 50 mbcd -75/2551-150 mbcd 80/20Up 150 mbcd 85/15







OIL FIELDa. Development Before August 1992

b. Depth Sea 600-4500 feet

Up 4500 feet

Up to 50 mbcd -80/2051-150 mbcd 85/15Up 150 mbcd 90/10

Single split 65/35

Up to 50 mbcd-80/2051-150 mbcd 85/15Up 150 mbcd 90/10


85/15

85/15

85/15

85/15









OIL FIELDa. Development After August 1992Depth Sea Up 4500 feet

New ContractFrontier

2. GAS FIELDa. Dev. Before August 1992b. Dev. After August 1992 Depth Sea Up 4500 feet New Contract Conventional Frontier Depth Sea Up 4500 feet

Single -65/35

Single split 65/35

70/30

60/40

65/3560/40

55/45


70/30

70/30

85/15

70/30

70/30

85/15

70/30

70/30

Single-75/25

Single -80/20

70/30

60/40

65/3560/40 55/45







KONDISI DMOKONDISI DMO

Five Calendar YrsFive Calendar YrsFee DMO New OilFee DMO New OilFee DMO Old OilFee DMO Old Oil-Field prod. before Feb -Field prod. before Feb 19891989-Field prod. Feb 1989--Field prod. Feb 1989-Aug 1992Aug 1992Filed prod. Aug 1992 – Filed prod. Aug 1992 – Jan 1993Jan 1993Field prod after 1993Field prod after 1993

Maksimum sama Maksimum sama dengan equity dengan equity share oilshare oil

49-60 month49-60 monthMarket PriceMarket Price

US$0.20US$0.20

Maksimum sama Maksimum sama dengan equity dengan equity share oilshare oil

49-60 month49-60 monthMarket PriceMarket Price

US$0.20US$0.20

Maksimum sama Maksimum sama dengan equity dengan equity share oil, share oil, dan jika dan jika operating operating cost melebihi cost melebihi produksi produksi setelah setelah dikurangi dikurangi dengan FTP dengan FTP dan dan Investment Investment Credit Credit dibebaskan dibebaskan dari dari kewajiban DMOkewajiban DMO

60 months60 monthsMarket PriceMarket Price

US$0.20US$0.2010% Market 10% Market Price Price



US$0.20US$0.2010% Market 10% Market Price Price 15% Market 15% Market PricePrice



US$0.20US$0.2010% Market 10% Market Price Price 15% Market 15% Market PricePrice25% Market 25% Market PricePrice

INCENTIVE PACKAGE FOR INVESTMENT CREDIT

DESCRIPTIONNEW OIL FIELD-Conventional-Conventional-Marginal -Conventional-Tertiary-Conventional-Pre tarsier-Frontier-Marginal-Frontier-Tertiary-Frontier-Pre Tarsier-Depth Sea -600 ft-Depth Sea-600-1500 ft-Depth Sea Up of 4500 ft

17%17%17%17%17%17%17%17%127%127%

17%17%17%17%17%17%17%17%

127%127%

17%17%17%127%17%17%127%17%127%142%

17%17%17%

127%0%0%0%

17%127%

0%

0 %0 %0 %0 %0 %0 %0 %0 %0 %0 %

0 %0 %0 %

110 %0 %0 %

110 %0 %

110 %125 %a

0 %0 %0 %

110 %0 %0 %

110 %0 %

110 %125 %

17 %17 %17 %17 %17 %17 %17 %17 %

127 %127 %

0 %0 %0 %0 %0 %0 %0 %0 %55 %55 %

DESCRIPTIONINVESTMENT CREDITNEWGAS FIELD-Conventional-Conventional-Marginal -Conventional-Tertiary-Conventional-Pre tarsier-Frontier-Marginal-Frontier-Tertiary-Frontier-Pre Tarsier-Depth Sea -600 ft-Depth Sea-600-1500 ft-Depth Sea Up of 4500 ft

0 %0 %0 %0 %0 %0 %0 %0 %0 %0 %

DESCRIPTION BEFOREINCENTIVE

INCENTIVEI (Aug 1988)

INCENTIVEII (Feb1989)

INCENTIVEIII (Aug 1992)

INCENTIVEIV (Jan 1994)

INCENTIVE PACKAGE FOR INDONESIA’S PRODUCTION SHARING CONTRACT

IV. FIRST TRANCH PETROLEUM (FTP)

Tidak ada, sehingga tidak ada jaminan Indonesian sharekarena recovery operating cost setiap tahun boleh 100%, dan sebagai usaha mengamankan penerimaan Indonesia, maka setiap new field development disyaratkan Indonesian share minimum 49%selama project life dan kemudian diturunkan menjadi 25%

Ada sebesar 20%, sehingga ada jaminan Indonesian share, dan melepaskan syarat keekonomian project kepada investor, namun setiap new field development disyaratkan harus meminta persetujuan kepada pemegang manajemen resources development.

Walaupun sudah ada jaminan Indonesian share dengan penerapan First Tranche Petroleum 20% dan tidak ada syarat keekonomian, namun setiap new field development disyaratkan harus meminta persetujuan kepada pemegang manajemen resources development.

Khusus Kawasan Timur dan Barat tertentu -15%

INCENTIVEIV ( Jan 1994DESCRIPTION INCENTIVE

III ( Aug 1992)INCENTIVE

II (Feb 1989)INCENTIVE

I (Aug 1988)BEFORE

INCENTIVE

Tidak ada, sehingga tidak ada jaminan Indonesian sharekarena recovery operating cost setiap tahun boleh 100%, dan sebagai usaha mengamankan penerimaan Indonesia, maka setiap new field developmentDisyaratkanIndonesian share minimum 49%selama project life dan kemudian diturunkanmenjadi 25%

Ada sebesar 20%, sehingga ada jaminan Indonesian share, dan melepaskan syarat keekonomianproject kepada investor, namun setiap new field development disyaratkan harus meminta persetujuan kepada pemegang manajemen resources development.

ekomigas s1 psc

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