Ministry of Energy and Mineral Resources: Major new division makes oil and gas investment more attractive

Currently, it is being finalized and soon we will be socializing…

Jakarta (ANTARA) – The Ministry of Energy and Mineral Resources (ESDM) refers to a production sharing contract with a scheme big split new (new GS) is willing to promote upstream oil and gas investment in Indonesia to be even more attractive.

The Director of Upstream Oil and Gas Industry Development at the Ministry of Energy and Mineral Resources, Ariana Soemanto, said in her statement in Jakarta, Thursday, that the government continues to prepare policies and efforts to improve the oil and gas investment situation. make more enthusiastic. .

According to him, the contract new GS simplifies the profit sharing components (split) contractor in the GS contract, which previously included 13 components, has become only five components, so that it is more functional, simpler, and the level of profit sharing is also more attractive to contractors.

“Go ahead new GS, contractors get it split up to 75-95 percent. At the same time, for old GS contracts to achieve viable economics, most contracts require the submission of additional split for the government, uncertainty for contractors,” said Ariana.

Onward new GS, he added, would be even more attractive for unconventional oil and gas (MNK), as contractors would receive a direct profit share of up to 93-95 percent.

“This will be interesting for PT Pertamina Hulu Rokan in terms of MNK Rokan’s operations,” he added.

According to him, the provisions related to profit sharing will be further explained in the Decree of the Minister of Energy and Mineral Resources, where the level of profit sharing is also socially imposed to business actors.

“Right now, it’s being finalized and we’ll be socializing soon,” he explained.

Ariana said that the new GS Ministerial Regulation that was published in principle applies to new contracts in the future.

However, for existing GS contracts that have not been approved development plan first (POD-1), they can submit changes to new GS, including MNK may submit changes to new GS.

The New GS Ministerial Regulation, he also said, also accepts contract changes big split existing ones who wish to transfer to the scheme cost recovery.

“In addition, there is the scheme of the contract cost recovery signed after the issuance of the New GS Ministerial Regulation, may change to new GS, and vice versa. So, it will provide flexibility in the future,” he said.

In principle, Ariana repeated, it’s a scheme big split it will appeal to contractors who have a strong belief in efficiency.

With the GS scheme, according to him, the more efficient the contractor, the more profitable he will be. In addition, the supply of goods and services by contractors on GS contracts is more independent.

“For the government, this is policy support for contractors to have choice and flexibility in upstream oil and gas investment to make it more attractive,” said Ariana.

Currently, the government is preparing various policies to make oil and gas investment more attractive.

For new oil and gas contracts or new oil and gas blocks (in scheme contracts cost recovery) is given split for contractors it can reach 45-50 percent.

“Before, it was only 15-30 percent. Recently, oil and gas upstream Indonesia has been made more attractive to encourage exploration and optimal production,” Ariana said again.