Proceedings of the 2018 International Conference on Energy and Mining Law (ICEML 2018)

The Effect of Cost Recovery Mechanism in Production Sharing Contract (PSC) in Oil and Gas Industry in Indonesia

Authors
Patricia Audrey Ruslijanto, Ms Ikaningtyas, Rika Kurniaty
Corresponding Author
Patricia Audrey Ruslijanto
Available Online September 2018.
DOI
10.2991/iceml-18.2018.55How to use a DOI?
Keywords
cost recovery, Production Sharing Contract (PSC), oil and gas, Indonesia
Abstract

This paper aims to explain the normative rules relating to cost recovery as a basis for profit sharing between the government and the contractors in oil and gas agreements, and the implementation of those agreements. As the exploration and exploitation of oil and gas is a strategic industry for Indonesia, wherein oil and gas industry contributes 30% of the Indonesian state budget. In the management of national oil and gas industry, foreign investors are often involved with Production Sharing Contract. This Production Sharing Contract between the government and investors usually done after cost recovery reduction was made. With a normative juridical and conceptual approach, show there is existence of inconsistency in the implementation of cost recovery in Production Sharing Contract (PSC) of oil and gas procurement, particularly regarding the components that should exist in cost recovery contract of oil and gas cooperation in Indonesia. The amount of cost recovery value will greatly affect the amount for the production of oil and gas. Although it has been regulated in government regulation number 79 Year 2010 on operating cost of re-refundable and tax revenue in the field of oil and gas business, which states that there are 3 components of cost recovery: capital cost, non-capital cost, and depreciation, however there are still many disobediences to the implementation of cost recovery in the field.

Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 2018 International Conference on Energy and Mining Law (ICEML 2018)
Series
Advances in Economics, Business and Management Research
Publication Date
September 2018
ISBN
10.2991/iceml-18.2018.55
ISSN
2352-5428
DOI
10.2991/iceml-18.2018.55How to use a DOI?
Copyright
© 2018, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Patricia Audrey Ruslijanto
AU  - Ms Ikaningtyas
AU  - Rika Kurniaty
PY  - 2018/09
DA  - 2018/09
TI  - The Effect of Cost Recovery Mechanism in Production Sharing Contract (PSC) in Oil and Gas Industry in Indonesia
BT  - Proceedings of the 2018 International Conference on Energy and Mining Law (ICEML 2018)
PB  - Atlantis Press
SP  - 254
EP  - 259
SN  - 2352-5428
UR  - https://doi.org/10.2991/iceml-18.2018.55
DO  - 10.2991/iceml-18.2018.55
ID  - Ruslijanto2018/09
ER  -