Regulations Improved, Share The Results Of The Oil And Gas WK Auction Now So 50:50

Illustration (Photo: Doc. Antara)

JAKARTA - The government has corrected terms and conditions or terms and conditions (T&C) at the auction offer for oil and gas working areas (WK Migas).

It aims to increase the attractiveness of upstream oil and gas investment.

Director General of Oil and Gas at Tutuka Ariadji said, Director General of Oil and Gas at Tutuka Ariadji said, the improvement of the terms and conditions in this oil and gas auction included a stipulation for oil and gas yields for the government and cooperation contract contractors (KKKS) reaching 50:50. The government has conveyed changes to these terms and conditions since last year. So for profit sharing, there is no longer 85:15, now starting from 80:20 for the government and the private sector (KKKS) for oil and gas 75:25. We start with that number, as the risk increases, the Government part will shrink," said Director General of Oil and Gas Tutuka Ariadji to the media, Thursday, December 8.

Tutuka explained that changes to the oil and gas yields of 50:50 have been applied to the cooperation contract for the Agung I and II Working Areas managed by BP.

The signing of the oil and gas WK contract was carried out on June 20, 2022.

"In Project Agung I and II, the distribution is 50:50. This has been communicated to industry and the world, so hopefully it can compete with neighboring countries," he said.

In addition to changes in the amount of profit sharing, the government also provides other incentives such as the provision of a signature bonus without a minimum (open), a decrease in the amount of FTP to 10 percent, a 100 percent DMO price, and the application of flexibility of the Cooperation Contract (cost recovery and gross split) scheme.

In addition, for cost recovery cooperation contracts there will be no fee ceilings applied, no obligation to part of the work area during the first three years, as well as easy access to data packages through membership mechanisms.

"Contractors can also obtain tax facilities in accordance with regulations and there are incentives for upstream business activities for field development," concluded Tutuka.