Pemerintah Bakal Restui Perubahan Scheme Pembangunan Blok Corridor Ke Cost Recovery, Asal...

Director General of Oil and Gas (Migas) of the Ministry of Energy and Mineral Resources Tutuka Ariadji. (Photo: Maria Trisnawati/VOI)

JAKARTA - Director General of Oil and Gas (Migas) of the Ministry of Energy and Mineral Resources Tutuka Ariadji revealed that his party will approve the proposal of the Corridor Block operator, PT Medco Energi Internasional Tbk to change the development scheme from the previous gross split to cost recovery.

Just so you know, gross split is a form of cooperation contract in the oil and gas sector whose distribution of the proceeds is determined based on the results of oil and gas gross production. With the gross split scheme, the operational costs are entirely the responsibility of the Contractor. Meanwhile, the cost recovery scheme, cost operations (cost) will eventually become the responsibility of the Government.

Tutuka said the government would facilitate the change of the scheme from gross split to cost recovery as long as the operator or Cooperation Contractor (KKKS) has not spent development costs.

"We will facilitate it if as long as it can be done, if the gross split has not been paid," said Tutuka when met by the media at the Ministry of Energy and Mineral Resources Building Monday, October 2.

Meanwhile, for the Corridor Block case, the operator of the manager has not issued a development fee so that the process can be faster and easier.

Regarding the consequence of moving schemes, he said, the KKKS will be required to include a new program as an effort to increase additional oil and gas production in managed fields.

"We ask that there must be a program, an addition (to increase oil and gas field production)," added Tutuka.

Furthermore, he said, if the previous Corridor Block operator, ConocoPhillips, had already submitted a change in the scheme before leaving Corridor Block.

"For a long time, the Conocophillips (Copi) era had asked now (Medco) to continue. When the Copi had proposed it, but it had not yet been processed, it had already come out first," continued Tutuka.

The reason the operator proposes to change the scheme is due to the huge risk of the field.

Seeing the high risk, the KKKS then proposed a change in the scheme so that the risk could be shared with the government.

"But there are also KKKS who want to take risks with their own beliefs so that the gross split process is faster, there is no need for government approval. So depending on them, we can't force them to move here (cost recovery)," concluded Tutuka.