cbm makalah

Upload: chandra-alfianto

Post on 07-Jan-2016

231 views

Category:

Documents


2 download

DESCRIPTION

about Coal Bed Methane

TRANSCRIPT

  • Making CBM work in Indonesia

    Peter GodfreyVice-President Commercial

  • Tensions between government and industry are normal!

    CBM Operating Companies / Investors

    Return on Investment Shareholder Value Track record Reputation Competitive forces

    Government of Indonesia:

    Supportive national energy policy 3Beneficial ownership of CBM resources Revenue Generation (both central and regional) Enhance Domestic Gas Supply Environmental issues National interests

    BUT CBM IS NOT OIL & GASMargin businessIt will never be a bonanza!Need for cost-efficiency & effectivenessNeeds experience & innovation

  • The old story what industry needs

    Stable and predictable regulation that appropriately balances investment risks and rewards

    Transparency throughout the value chain aimed at facilitating the complex process of stake-holder contractual negotiations

    Continuity, whereby all stake-holders can more clearly make appropriate commercial decisions that will affect their medium/longer-term investments

    Efficiency aimed at accelerating the pace of decision-making whilst at the same time ensuring that the correct decisions are made both from a Government and Industry point of view

    Managerial Independence and Accountability aimed at promoting a positive development culture as opposed to a bureaucratic blame culture

    Greater incentivisation for effective development rather than one that is more like an obstacle race today

  • What will it take to build a sustainable CBM industry in Indonesia IndoCBM April 2006 Slide 1

    1. ISSUE CBM REGULATION SOON

    2. SUPPORTIVE FISCAL REGIME WHICH RECOGNISES RISKS FACING EARLY DEVELOPERS

    - SIMPLE AND CLEAR LICENSING SYSTEM- CLEAR CBM RIGHTS

    - RISKS:- RESERVES UNCERTAIN- RESERVES STRANDED / REMOTE AREAS- TECHNICAL DEVELOPMENT- DIFFERENT LIFE CYCLE TO TRADITIONAL NATURAL GAS- UNCERTAIN CAPITAL AND DEVELOPMENT COSTS- INFRASTRUCTURE LACKING- MARKET UNDEVELOPED

  • 3. GOVERNMENT PROMOTION

    4. IDENTIFY AND WHERE POSSIBLE ASSIST IN DEVELOPMENT OFTHE MARKET, THE INFRASTUCTURE NEEDED AND ECONOMICALLYSUSTAINABLE GAS PRICES

    - TO ATTRACT IN BEST PRACTICE TECHNOLOGY PROVIDERS / INVESTORS

    MARKET OPTIONS:

    e.g.- ELECTRICITY GENERATION- SUPPORTING MINE OPERATIONS- SALES TO THE POWER GRID- SUPPLY TO NAT GAS PIPELINE SYSTEM- RAW MATERIAL FOR FERTILISER, METHANOL ETC- MOTOR FUEL (CNG/GTL)

    What will it take to build a sustainable CBM industry in Indonesia IndoCBM April 2006 Slide 2

  • Oil & Gas v CBM Economics

    Oil&

    Gas

    CBM

    Government Take

  • 2007 IPA recommendations to increase oil and gas E&P investment

    REGULATORY Lack of fiscal clarity, consistency and certainty

    between PSC, Tax Law and Oil and Gas Law Regulatory complexity, especially in procurement

    DEVELOPMENT Declining field sizes, rising costs and

    uncompetitive investment economics

    Fallow discoveries

    EXPLORATION Big potential in frontier basis but low investment

    Taxation of exploration investment Taxation of Farmouts Gas Risk

    REGULATORY Synchronize and harmonize when preparing new

    tax law and implementing regulations Streamline bureaucracy

    DEVELOPMENT Increase marginal field incentive from 20% to

    100% Apply to all fields, not just fully cost recovered

    blocks Implement Brownfield incentives PSC partitioning for development and

    exploration

    EXPLORATION Revolutionary risk sharing via ring fence removal Improved profit sharing with progressive terms Eliminate Royalty non splitable FTP Totally eliminate VAT and import duties / taxes

    etc Clarity, Certainty and Predictability Oil linked gas pricing for domestic gas

    Issues IPA Recommendations

  • The Goal: to promote the development of CBM and attract investment

    Establishment of Regulations and Field Rules Model Contract for CBM Conflict Resolution Policy and Procedures Fiscal Regime for CBM

    Legal foundation Production Sharing Contract v Tax and Royalty system

    Tender Procedures Bid Evaluation Criteria Procurement regulations Health, Safety, Environment & Security issues Gas Markets and Prices Government must value the development of a new energy

    resource and environmental benefits etc.

  • Government needs to recognise that the early investors of CBM are taking additional risk

    Frontier start-up nature of CBM CBM operator seeks rapid cost recovery to

    justify investment and re-investment Beyond the exploration phase, investment

    decisions will be based on: The market for CBM / ease gas commercialisation The ability to freely negotiate gas supply agreements

    short / medium and longer term Expectations regarding gas prices

    Ability to sell gas at guaranteed or open market prices

  • Theoretical CBM Fiscal System Comparisons

    0.00%50% in JOA's30% Back-in51.00%0.00%0.00%Maximum Government Participation

    ?Yes(2)First call local useFirst call local use??Domestic Market Obligation

    State Taxes 5-10%0.00%

    Yes, as applicableYes, as applicable

    State Taxes 12%0.00%Local Taxes

    Federal Tax, 25-35%44.00%50.00%30.00%

    Federal Tax, 21%30.00%Income Tax Rates ( + BPT)

    42-53%30-33%30-42%38-41%40-50%40-50%Avg Contractor Take of Profits

    Yes0.00%Yes10.00%Yes10.00%VAT, GST, Duties, PLP's

    0.00%0.00%0.00%0.00%Federal

    Royalties0-2.5%Other Private Royalties

    AMT80%(1)100.00%60.00%100.00%100.00%Cost Recovery Limit

    0.00%10.00%0.00%0.00%0.00%0.00%First Tranche Petroleum

    12.50%0.00%10.00%Sliding scale, 0-

    12.5%

    Sliding scale, based on type

    of gas10.00%Royalty

    n/aYes, varies each

    PSCn/an/an/an/aProduction Bonuses

    0.00%Yes, varies each

    PSCYes, $0.3mYes0.00%0.00%Signature Bonuses

    Yes25%, or 100% of

    no discoveryYes(3)YesYesYesRelinquishment

    Gov't and individualsGov't sole owner

    Gov't sole owner

    CUCBM mandatory foreign co'y countrparty

    Gov't and individualsIndividualsTitle to CBM

    R/TPSCPSCPSCR/TR/TDominant Fiscal System

    USAIndonesiaIndiaChinaCanadaAustralia

  • Pertamina & MIGAS visit to Arrow facilities in Australia June 2007