Jakarta (VNA) – The Indonesian government has announced that it hadrevised a 2017 law that will give oil and gas investors more flexibility whenchoosing their contract options for exploration, according to Reuters.
The revisions, which came into effect on July 16, allow contractors to choosebetween different sharing contracts including the “cost recovery” and “grosssplit” systems in an effort to boost investment.
Indonesia adopted the “gross split” scheme for oil and gas production deals in2017, in which contractors shoulder the cost of exploration and production inexchange for retaining a bigger portion of the oil and gas they recover.
That represented a shift from the “cost recovery” scheme used previously, inwhich the government reimbursed the exploration and production costs borne bythe contractors in exchange for a higher share of companies’ oil and gasearnings.
Under the revised law, expiring contracts no longer have to be converted togross split production sharing contracts from cost recovery contracts.
In the case where state oil company PT Pertamina or its affiliatesare appointed, the ministry will determine the cooperation contract./.
The revisions, which came into effect on July 16, allow contractors to choosebetween different sharing contracts including the “cost recovery” and “grosssplit” systems in an effort to boost investment.
Indonesia adopted the “gross split” scheme for oil and gas production deals in2017, in which contractors shoulder the cost of exploration and production inexchange for retaining a bigger portion of the oil and gas they recover.
That represented a shift from the “cost recovery” scheme used previously, inwhich the government reimbursed the exploration and production costs borne bythe contractors in exchange for a higher share of companies’ oil and gasearnings.
Under the revised law, expiring contracts no longer have to be converted togross split production sharing contracts from cost recovery contracts.
In the case where state oil company PT Pertamina or its affiliatesare appointed, the ministry will determine the cooperation contract./.
VNA
