Comparative analysis of upstream oil and gas contracts cost recovery scheme against gross split scheme: (Case study: PT. Pertamina Hulu Energi Jambi Merang)

Ika Sari; Mohamad Adam; Isnurhadi Isnurhadi; Tertiarto Wahyudi; Marlina Widiyanti

doi:10.31295/ijbem.v4n2.1710

Authors

Ika Sari
Ika.saridjufri@gmail.com
Master of Management, Sriwijaya University, Palembang, Indonesia
Mohamad Adam Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia
Isnurhadi Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia
Tertiarto Wahyudi Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang
Marlina Widiyanti Lecturer of Magister Management, Economic Faculty, Sriwijaya University, Palembang, Indonesia

Keywords:

comparative analysis, cost recovery, gross split, PSC

Abstract

In carrying out upstream oil and gas activities, PHE Jambi Merang uses a fiscal concept called Production Sharing Contract (PSC) through a cost recovery scheme. The lack of supervision over the implementation of cost recovery payments is considered one of the causes of the increase in cost recovery from year to year. To anticipate the above, the government in 2017 issued a Regulation of the Minister of Energy and Mineral Resources concerning Production Sharing Contracts with a Gross Split Scheme. The basic principle is gross profit sharing without a mechanism for returning operating costs to oil and gas contractors. The purpose of this study is to find out how the two schemes are compared. This study shows that the Gross Split Scheme has a more realizable economic value than the Cost Recovery scheme. The calculation parameter of the fiscal regime that produces the largest GOI take value is the Gross Split scheme, and for the most significant contractors, the Gross Split Scheme is the same. The implication is that it is expected to increase knowledge regarding PSC Cost Recovery and PSC Gross Split for further studies in the future.

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