Government Reshuffles Hulu Migas' Gross Business Split Rules, Here's The Investor's Reaction

Illustration (Photo: Doc. Antara)

JAKARTA - Oil and gas investors or Cooperation Contractors (KKKS) positively welcome the draft amendment to the Minister of Energy and Mineral Resources Regulation Number 8 of 2017 concerning the Gross Split Profit Sharing Contract which is currently being discussed by the government.

"We appreciate the steps taken by the government to improve Gross Split's contract to increase Indonesia's oil and gas competitiveness. This is a follow-up to a workshop in Bandung in December 2022. Within 6 months there has been a draft. This is extraordinary," said Ali Nazir representing Indonesia Petroleum Assocation (IPA) quoted Wednesday, May 24.

The same thing was also conveyed by Imelda from Pertamina Hulu Energi and Gunawan from Pertamina Hulu Rokan.

"This new design is a breath of fresh air for KKKS such as PT Pertamina," said Imelda.

On this occasion, the KKKS also conveyed input and questions related to the draft, among others, the proposal to consider high costs (maintenance) for the working area (WK) over management and additional splits for WK oil and gas mature.

Director of Business Development Hulu Migas Noor Arifin Muhammad welcomed the responses and inputs.

"The development to date has a lot of input. Of course, we are still very open to input so that we can realize the initial purpose of this Gross Split contract. Thoughts about this form of contract certainly do not come suddenly, but from a deep thought. We keep simplification in line with the goal at the beginning," he said.

In addition to the draft amendment to the Minister of Energy and Mineral Resources Regulation Number 8 of 2017 concerning Gross Split Revenue Sharing Contracts, the government is also drafting a Ministerial Decree on Guidelines for Implementation and Contract Components for Gross Split Results Sharing which is used as a reference in determining and adjusting the results for Gross Split contracts.