Having One Stop Service, SKK Migas Is Ready To Facilitate The Development Of Oil And Gas Contractors

Head of SKK Migas Dwi Soetjipto. (Photo: Antara Doc)

JAKARTA - Leaders of Cooperation Contract Contractors (KKKS) are asked not to hesitate to contact the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), to get support in portfolio development. Including, if there is a field that is considered uneconomical or marginal to be developed.

“If the licensing process is complicated, then you can come to SKK Migas. Our internal process already has a One Stop Service Policy (ODSP)”, said Head of SKK Migas Dwi Soetjipto in a statement received by VOI, Thursday, March 17.

Furthermore, Dwi said that achieving the 2022 production target is very challenging, especially with the current production conditions. However, KKKS must take advantage of the momentum of rising oil prices to increase activities that will have an impact on production.

"Moreover, the government has shown its commitment to making the upstream oil and gas industry investment climate more attractive, with various licensing facilities and incentives," he said.

On the same occasion, the Director General of Oil and Gas of the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that throughout 2021, the Ministry of Energy and Mineral Resources has offered 14 working areas (WK).

In the WK bidding, the terms and conditions (T&C) have been improved, including a gas profit sharing split of up to 50:50 for high-risk CAs. Then FTP is reduced to 10 percent (shareable) with the flexibility to choose a cost recovery system or a gross split.

Tutuka added that the DMO price is set at 100 percent ICP during the contract period, for WK reinquishment it is set at 0 percent for the first 3 years and there is no cost ceilling for PSC cost recovery.

Data access is free of charge, and is related to tax facilities for the exploration and exploitation period following the provisions of PP 27/2017 and PP 52/2017. Another incentive is investment credit, with provisions for accelerated depreciation.

The government is in the process of providing tax facilities and incentives. What is being discussed is the additional split to support the gross split PSC economy. Then investment credit, free DMO and accelerated depreciation for PSCs, as well as incentives for renting BMN.

"Currently, the Ministry of Energy and Mineral Resources and the Ministry of Finance are drafting revisions to PP 2/2017 and PP 53/2017 to improve the economy of upstream oil and gas activities," said Tutuka.

Tutuka added that he is currently discussing with the Indonesian Petroleum Association (IPA) regarding efforts to accelerate the POD process. The aim is not only to speed up, but also to simplify the evaluation process to determine the feasibility of a POD, even before an application for approval is submitted. Both for POD I and the next POD.

Furthermore, Tutuka conveyed that the Government through the Minister of Energy and Mineral Resources had set Guidelines for Providing Incentives No. 199 of 2021, with the types of incentives regulated for Production Sharing Contracts (PSC) Cost Recovery including profit sharing (split), FTP, investment credit, DMO rewards and accelerated depreciation. As for PSC Gross Split on the profit sharing (split).

"We will work hard to encourage an increase in the upstream oil and gas investment climate, in order to encourage an increase in national oil and gas production. Today, at the CEO Forum, we hope to get input, get good views and other things, to increase national oil and gas production in a sustainable manner and achieve the 2030 target," said Tutuka.