81 Chapter V Conclusion and Recommendation 5.1 Conclusion 1. Business environment analysis consists of PESTLE analysis, Porter’s Five Forces analysis and SWOT analysis. Based on PESTLE analysis, political and legal aspects give negative impacts to PT Energy Sumber Perkasa as the political system in Indonesia conduct the election of presidential every five years, most of the time every regime made different regulations about oil and gas industry which sometimes not corelated between one to another. The political condition in the world such as Ukraine Russia war, the political condition in middle east give major effect to the oil and gas industry. PT Energy Sumber Perkasa must follow many of legal regulations in order to run its businesses. In economic aspect, oil and gas industry has positive and negative impacts on other industries. If the oil price is high, it is great for oil industry but a challenge for other industries meanwhile if the oil price drops, it is bad for oil and gas industry but good for other industries. Oil and gas industry also have significant role in generating revenue for Indonesia. Technology aspect give positive impact to PT Energy Sumber Perkasa. New technologies will increase the efficiencies of exploitation, exploration, and operation activities which can attract investors to invest. Socio-cultural and environment aspects have quite negative impacts to PT Energy Sumber Perkasa as the concern about the global awareness from society is increasing and the availability of renewable energy. PT Energy Sumber Perkasa is demanded to apply environment friendly regulations in its operation activities to reduce the carbon emission which will cost more money to the business to apply the regulation. According to Porter’s Five Forces analysis, the threat of new entrants is low because to start business in oil and gas industry require a massive investment and a legal permit to operate in Indonesia which is quite hard to get since the bureaucracy is a little bit complicated. So, generally only big oil companies can operate in Indonesia. The bargaining power of supplier is low because most of the time only big oil service companies who can survives in oil and gas industry 82 as oil service companies must follow the contract that the oil contractor has set before which demand the supplier to provide advanced service such as newest technology, skilful workers, updated equipment according to the request from the oil company. Bargaining power of buyer is low because the oil price that costumers get is subsidised by the government budget that adjust with the allocation of Anggaran Pendapatan dan Belanja Negara (APBN). Threat of substitution is medium because Indonesian people still dependant with oil and gas. But right now, the concern about environment has been increasing that makes some people change to use renewable energies and the behaviour of consumers also change in order to minimize carbon emission. The intensity of rivalry among competitors is low because Government of Indonesia through its state-owned company has a plan to nationalize all the oil and gas fields in Indonesia which means oil and gas field that managed by foreign companies will be transferred its ownership into GOI’s. According to SWOT analysis, PT Energy Sumber Perkasa has strengths such as PT Energy Sumber Perkasa is a national oil company, PT Energy Sumber Perkasa has highly skilful workers, support local development, good financial condition, and good investment rate company. The weaknesses that PT Energy Sumber Perkasa has are the bureaucracy is complicated, transition from the previous contractors, and some of the oil reservoirs are matured. PT Energy Sumber Perkasa has opportunities such as oil and gas reservoirs in Indonesia, demand for oil and gas, population of Indonesia, and infrastructure development in Indonesia. PT Energy Sumber Perkasa has threats such as regulation from government, crude oil price, competitors from others oil and gas companies, political situation, and consumption of oil in Indonesia. 2. The financial feasibility of the project that use PSC gross split contract has been conducted following the capital budgeting framework to accept or reject the project, based on the economic indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), Discounted Payback Period (DPP), Payback Period (PP), and Profitability Index (PI).