Government Godok New Rules To Increase Domestic Oil And Gas Production

Director General of Oil and Gas Tutuka Ariadji. (Photo: Maria Trisnawati / VOI)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) is working on new regulations to increase domestic oil and gas production.

Director General of Oil and Gas Tutuka Ariadji said the government is now pioneering a new idea by considering the high risk of oil and gas production, so fiscal will be fixed, the gross split scheme is refined.

In addition, oil and gas Cooperation Contract Contractors (KKKS) will get a larger split of (split) results.

"The higher the risk we give a larger split. For oil, starting from 80 (percent) it decreases to 50 contractors, 50 governments," said Tutuka, quoted Wednesday, January 24.

Tutuka said, the option of transitioning contract strature for KKKS will also be wide open from Gross Split to PSC Cost Recovery.

"Essentially, giving freedom for the best choice for an advocating contract scheme," continued Tutuka.

This application is because several oil and gas fields with full splits (100 percent) are not economical. Payung regulations are also being prepared. Paramaters who give splits will be cut a lot.

"We will issue it hopefully if not this month (January) next month, the new Minister of Energy and Mineral Resources Regulation regarding gross splits," added Tutuka.

The presence of this new regulation emphasizes flexibility. It can even facilitate the development of non-conventional oil and gas blocks. Moreover, in general, KKKS is reluctant to implement cost recovery.

"Simplified gross split is like a royalty tax, this is not yet in Indonesia," added Tutuka.

In addition to fiscal improvements, many success stories in the upstream oil and gas sector will be in 2023. Starting from increasing drilling 38 tax exploration wells with a successful ratio of 54 percent, developing 799 wells, increasing investment value of up to 0.9 billion US dollars, aggressive exploration in the deep sea, to the discovery of big-fish giant discovery.

"More than 500 million are giant disclosures. We encourage KKKS to shift to wells with great potential," added SKK Head Migas Dwi Soetjipto some time ago.

The steps above are said to be able to penetrate the 123.5 percent Reserve Replacement Ratio (RR) in 2023.

This achievement certainly adds to the life of oil and gas reserves. Comparing new reserves with oil and gas reserves that have been taken. This is proof that oil and gas reserves in Indonesia are classified as safe.

"If we continue to maintain it above 100, reserves (of the gas) will be added," explained Dwi.