Sept 14 - 16,2011 | Bali

COURSE OVERVIEW

Accounting Records – Financial Reports are mandatory requirements of the management and the employees of a PSC Company and in fulfilling the requirements of several stakeholders such BPMIGAS, BPKP, BPK, Owners’ audit, Unit’s audit, Indonesia Tax Office, Internal audit, and Independent audit. PSC Contractor/Operator shall be responsible to have and maintained the in house accounting systems in order to record each financial transaction into the adopted accounting systems and interpret each annual data into BPMIGAS’ Financial Budget and reporting and expenditures (as ruled by the BPMIGAS’s Financial Budget and Reporting Procedures Manual). As promulgated by the PSC Agreement as a bounding legal-law between PSC Contractor and BPMIGAS/GOI which specifically declares that PSC Contractor is duly liable for providing funds and technical experts for its operations to explore and produce the oil and or gas through planning and performing all upstream activities during the operations, and allows PSC to use an accounting system in the PSC company. During the training phases will be given a clear understanding and showing the participant how the expenditures (costs) of each upstream activity financially processed through the Oil and Gas Industry accounting or records systems. Starting from the acquisition costs of a PSC Block, exploration, development, and routine production operations stages. The complexity and uniqueness of the exploration and production (upstream) commonly drag the functional employees within the PSC and as well as other related functions both inside of PSC and outside of PSC, which yet still have used logic-interpretations on how such characteristic and nature of the costs. Upon extracting oil and or gas out of the earth-processed into field oil and gas facilities, have made more complex of the accounting process daily. How to equip the participants with full awareness of each dollar spend must be through correct mechanism and accounting records, will be possessed and to what extents such accounting records will gear through what is called PSC‘s recoverable costs every financial terms.

This training course, will also discuss the responsibility of the PSC Contractor which is  related to the Indonesian Tax Laws, which is mandatory delegating each PSC Contractor is liable to do its self assessment for its corporate tax and to withhold its employees’ income tax and withholding tax of the subcontractors which are helping the PSC to run the daily operations, and VAT reimbursable invoices from the subcontractors. This integrated tasks into the PSC responsibility, which is realized that the taxations impacts must be known as clear as possible. In numerous instances the approved PSC Agreement and PSC tax implementation do not conform to the General Tax Laws, have made this matter duly important to study. A thorough understanding of the General Tax Laws and its implementations in one side and PSC Tax treatments on the other side have required considerable efforts. Meanwhile, since the Oil & Gas Law No. 22 year 2001 was promulgated or publicly announced and officially implemented, has replaced the Law No. 8/1971. PERTAMINA was revoked and BPMIGAS has taken over the authority and responsibility to manage Oil & Gas industry including tax matters deal with the present and in future.

This Training is designed to give the participants the ability to properly handle all PSC expenditures and costs classifications in accordance with the rules and laws including Tax Jobs as the basis for the participants to make judgment in dealing with, taxable and non-taxable costs, guide to determining the costs may directly subject to tax liability, tax planning, strategic, and decision making required by PSC management.

COURSE OBJECTIVE

• To equip the participants capability to identify, classify, record, and control all the expenditures incurred through the company operations and the understanding of tax implementation in the PSC and all other types of contracts in connection to procurement and services supplied to the PSC.
• The General Tax Laws and regulations into the PSC operations can not escape, since Corporate Income Tax, withholding taxes related have forced PSC must do aware and concern about Indonesian Tax regulations.
• To fully understand about problems arose in the implementation of the General Tax Laws and regulations, the impacts of the amendment of the tax laws, and what may be the consequences for PSCs in this situation.
• To understand the related tax provisions in the New Oil & Gas Law, what have been changed, what are the prospective operations under the Cooperative Contract (PSC).

BENIFITS OF ATTENDING

• Appreciation of a comprehensive understanding which have developed the participants’ ability to identify, classify, and record the costs/expenditures starting from preparation of the annual budget of costs and lifting of the oil and gas and the requirements of the Indonesian Tax Laws
• Awareness of an integral parts of responsibility for the ongoing-Indonesian-living-developments by the taxes collections and depositing at due time.
• Ensuring duly liable in terms of taxable transactions, date, and time of corporate and withholding payments
• In contrary of the awareness of penalty of delays and may be possible wrong doing things against the law for disobedient incumbent.

WHO SHOULD ATTEND?

• Cost Projects Controller, Business Planning Staff, Drilling, Production, and Facilities Construction Staff.
• Tax Staff, Finance Staff, Legal Counsel, Internal Audit Staff

COURSE CONTENT

Day One:

PSC Agreement approved and signed:

• Acquisition Costs
• Exploration Costs
• Development Costs and Production Facilities Costs
• Production Costs
• Supports facilities Costs
• Depreciation Methods and its characteristics
• DD&A accounting methods to be used to calculate costs recovery
• Depreciation Factors in Oil and Gas Operations
• Grouping the Facilities constructed and equipment purchases related to years age
• Overhead Allocations Costs
• Interest Costs Recovery
• Gas Costs – Natural Gas Costs
• Inventory Accounting related to cost recovery
• Abandonment and site restoration as part of cost recovery
• Definition of operating costs
• Non Capital costs
• Capital costs
• Recovery of operating costs and handling production
• Marginal Field
• Enhanced Oil recovery
• Pre-tertiary Reservoir Rocks split
• Cost recoverable Expenditures Summary
• Capital and Non-Capital flow for cost recovery
• Expenditures flows for recovery and splitting
• Budget Schematic
• Company In-house Budget
• Joint Partners sample of a PSC block
• BPMIGAS Budget and Financial Reports Schedules.

Day Two:

• Types of contracts 
• Crude and Gas Pricing 
• Cost Recovery 
• Cash Settlement   
• Farm-in/Farm-out
• Uplift
• First Trance Petroleum
• Investment Credit
• Abandonment Costs
• Incentive Packages

Tax Implementations in PSC:

• Ring Fence Policy
• Uniformity Principle
• Deductible Taxability
• Special tax policies and regulations applicable to PSC
• Forms of the PSCs entity
• Problems in implementing the tax laws and regulations

Day Three:

• Overview
• What have been changed
• Government Revenues and Tax related issues
• Prospective type of cooperative contracts
• PSC dilemmas in getting withholding taxes’ reimbursements from the State Treasury 
• Sanctions to delays tax-payments to the State Treasury Offices   
• Closing  

COURSE LEADER

Jamaluddin Siregar, BBA, STh, DIM, MBA