Will Be Fairer, SKK Migas Will Issue Result Sharing Contract Policy

Illustration (Photo: Doc. Antara)

NUSA Dua - Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) accelerates the issuance of contract flexibility policies for profit sharing.

Deputy for Exploration, Development and Management of the SKK Migas Working Area Benny Lubiantara said the flexibility allows operators to choose a cost recovery scheme that is considered to provide fairer state and contractor benefits.

The assessment of this incentive scheme is intended to make Indonesia a more attractive upstream oil and gas investment area.

"In terms of incentives, we are reviewing the flexibility of the gross split scheme which will be used as a basis for cooperation with KKKS for the development of fields that will be auctioned in the future," said Benny in his presentation at The 4th International Convention on Indonesian Upstream Oil and Gas (ICIUOG) 2023 in Nusa Dua, Bali, Thursday, September 21.

Benny targets that before the end of 2023 these rules can be completed to accelerate the development of the potential for Indonesian oil and gas blocs.

This is important because in terms of business, there are two sub-sectors that affect the upstream oil and gas industry, namely exploration and farm in or land use to be worked on.

For exploration, the government has provided data for open areas to potential investors.

SKK Migas also has several other activities such as the establishment of a Special Task Force that assists in oil and gas exploration activities in Indonesia.

Regarding the form of incentives studied, he said, SKK Migas saw the taxation system and royalties imposed by other countries between lqin in America.

The system is considered suitable for use in Indonesia, but will be modified by following the country's investment climate.

Simulations carried out by SKK Migas show that several blocks that use the gross split scheme in the future will not be economical.

They are currently working with the Ministry of Energy and Mineral Resources to evaluate how the project can be accepted by investors.

"The system and we modified it a little bit to make it more interesting. It will be inaugurated soon," he concluded.