Analysis of extensive use of variable split components on flexible gross split scheme

Abstract

The new fiscal scheme in the upstream petroleum industry has been implemented in Indonesia since 2017. Furthermore, the combination split at each parameter is not reflective of the various economic conditions, with the difference between well-developed and new frontier offshore categories at two percent. However, the field size for the offshore new frontier areas should have significant larger reserves to justify the pipelines and other infrastructures capable of utilizing the well-developed offshore facilities. This study therefore analyzes the fiscal model calibration for the variable component of infrastructure in an offshore field, through its economic indicator. Sensitivity of infrastructure development is applied, which affects to the capital investment, the operating cost, and production scenario. The study found that the composition of the split is not reflective of the various development and economic conditions. It is suggests that a new gross split scheme be designed and applied to multiple levels of infrastructure in the same working area.