this presentation shows about oil and gas sector of indonesia, such as the histories, imports, exports, subsidies, etc
For video: https://www.stratfor.com/video/falling-oil-prices-reverberate-through-indonesia-and-malaysia
This video is about an analysis from Stratfor East Asia Analyst called John Minnich, which examines how falling oil prices create challenges and benefits for Southeast Asia's largest energy producers.
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Indonesian oil & gas sector and the role for Indonesian Development
1. Oil and Gas
Anindya Sharani 350276
Muhammad Bima Samudera 350244
Muhammad Heickal Pradinanta 350168
Rozano Aulia Imansyah 350282
Valdo Dellazepta 350096
6. â Indonesiaâs oil industry is one of the oldest, discovered in 1883
â Koninklijke Nederlandsche Maatschappij tot Exploitatie van Petroleum-bronnen in NederlandschIndiĂŤ, 1890
â Royal Dutch Shell, 1907
â In 1911, Indonesia contribute to 4% of Worldâs oil production
â government control of oil increases post-independence, creating contract
with foreign oil companies and long term planning
â Indonesia joined opec in 1962
â Pertamina was founded in 1968 from the merging of Pertamin, Permina, and
Permigan
Exporter Period
7. Exporter Period
Annual oil production in Indonesia peaked in 1977 at over 600 million barrels
Price of crude oil was $14 per barrel, significant increase since 1973
Prices reached $35 per barrel in 1981
oil exports skyrocketing at $15 billion (70% of total export earnings)
However, production decreases starting 1982, down to 460 million barrels
Crude oil price was decreased to $29 per barrel
Market collapse in 1986, OPEC production plummeted from 50% to 29%
Crude oil price tumbled to $10 per barrel
13. Oil Subsidy
- Oil subsidy was implemented on the beginning of the new order era
- Based on the low purchasing power of indonesia people and at that time
indonesia still had many oil reserve
- Crude oil was used as the main source of national income
- The presence of VAT took over the main source of national income
- in 2015 Indonesian government spent Rp. 291.1 Trillion (+- $23 Billion) for oil
subsidy
15. Why the subsidy was getting higher?
Triggered by the failure of the government to make a convenient public
transportation
Vehicle boom in Indonesia
Increased in the price of the imported oil
16.
17. Subsidy Analysis
This past 10 years the government has spent approx Rp. 1,635 trillion for oil
subsidy
Oil subsidy is for the rich people
Rather than oil subsidy the government should use the money to productive
sector
Infrastructure development would be more appropriate rather than the oil
subsidy
18. Where the subsidy goes?
On the beginning of Jokowi era he took a brave action by cutting the budget for
oil subsidy and increasing it price
19. Conclusion
The Royal Dutch Shell bring about the start of Indonesiaâs oil export eral
Oil production growth in Indonesia was supported by the dependency of other
nations to OPEC.
Oil industry had its peak performance back in the mid 20th century
Oil subsidy since the beginning of the new order era was proven unappropriate
to continue in this present condition
Money from oil subsidy should be transferred to the productive segment
21. The role of gas for Indonesian Development
Energy Sector
(Oil and Gas)
Sources of
energy for
Domestic
Sources of
Governmentâs
Income
Feedstock to
strategic
industries
Indonesian Development
23. Indonesiaâs export of gas
Indonesia's gas production has always been directed towards export markets
Indonesian Government attempts to enlarge domestic uses of gas
Long-term export contracts that were signed in the early and mid-2000s are
priced below market prices
The domestic demand cannot be satisfied by domestic production
26. Subsidy of Natural Gas
Indonesian government give subsidy in form of tax incentive.
In 2008, $ 245 Million or Rp 2.37 Trillion was given to oil and gas
companies as tax incentive.
27. How to receive tax incentives?
The company must be operate under any one of the following conditions:
Oil refinery with priority for local demand.
Natural Gas refinery and processing business to produce LNG and LPG.
Lubricants manufacture.
Organic basic chemicals industry originating from crude oil and natural gas.
28. What are requirements to receive tax exemption?
Taxpayer that may be entitled for tax exemption are new corporate that fulfill
the following criteria:
Operate in a pioneer industry
New capital investment plan of at least Rp 1 Trillion.
Will deposit minimum 10% of total investment plan to Indonesian bank.
Have status of validated legal entity in Indonesia, at most 12 months before the effective date of
tax exemption.
29. How many period is the effective tax exemption?
The tax exemption on income tax payable for maximum 10 fiscal years and
minimum 5 fiscal years, based on commercial production commences.
After the end of exemption periods, taxpayers will be entitled to a 50% reduction
on income tax payable for subsequent 2 fiscal years.
34. Will Indonesia becomes an Importer in 2025?
No, because Indonesia is the 10th largest natural gas producing country.
35. Will Indonesia becomes an Importer in 2025?
Yes, if :
Government did not take any action on exploring new untapped resource.
Predominance of natural gas exports under long-term contracts.
Indonesiaâs inadequate distribution infrastructure.
(Royal Dutch Company for Exploration of Petroleum sources in the Netherlands Indies) in 1890, which was merged in 1907 with the Shell Transport and Trading Company to form Royal Dutch Shell
By 1911 Royal Dutch Shell operated concessions in Sumatra, Java, and Kalimantan (then called Borneo), and Indonesian oil was almost 4 percent of total world production
In 1968 the government companies; Indonesian Oil Mining company -- Pertambangan Minyak Indonesia (Pertamin), National Oil Mining Company -- Pertambangan Minyak Nasional (Permina), and the National Oil and Gas Company -- Pertambangan Minyak dan Gas Nasional(Permigan); were consolidated into a single operation, the National Oil and Natural Gas Mining Company -- Pertambangan Minyak dan Gas Bumi Nasional (Pertamina)
Indonesia's contract terms were considered among the toughest in the world, with the government in most cases receiving 85 percent of oil produced once the foreign company recovered costs
a substantial rise from the 1973 price of about US$4 per barrel as a result of OPEC's successful market manipulations. Prices continued to soar in 1981, reaching US$35 per barrel, and oil exports peaked at US$15 billion, or about 70 percent of total export earnings
In response to the high oil prices of the 1970s, industrial nations took steps to reduce dependence on oil. Utilities switched to using coal,natural gas, or nuclear power (researches for alternatives to oi)l. During this time, the percentage of oil produced by OPEC fell from 50% to 29%. The result was a six-year price decline that culminated with a 46 percent price drop in 1986.
In order to combat falling revenues, Saudi Arabia pushed for production quotas to limit production and boost prices. When other OPEC nations failed to comply, Saudi Arabia slashed production from 10 million barrels daily in 1980 to just one-quarter of that level in 1985. When this proved ineffective, Saudi Arabia reversed course and flooded the market with cheap oil, causing prices to fall to under ten dollars a barrel.
Walaupun bukan top consumer minyak, tapi dipake buat bensin, minyak tanah, aspal, plastik, obat2 an. Demand naik produksi menurun. Import lebih murah dari pada produksi sendiri. Harga turun.
Realisasi impor Produk Kilang rata-rata terlaksana sampai 120% terhadap RKAP. Hal ini dikarenakan target produksi BBM kilang domestik semakin lama semakin tidak mampu mencukupi kebutuhan yang selalu meningkat di pasar domestik.
impact? nge import lebih banyak
Keluar OPEC, why? 4 tahun berturut2 import>export, 2006 jadi âimporterâ import>export, yang di eksport lebih bagus, yang di import lebih jelek â dapet lebih
Economic growth rate is around 4% - 6%
predominance of natural gas exports under long-term contracts.
shortages may arise because of insufficient long-term investment in exploration and development of gas fields.
Indonesiaâs inadequate distribution infrastructure.