Share Results Of Up To 50:50. This Is A Step By The Government To Boost Oil And Gas Investment

Illustration of the refinery (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Energy and Mineral Resources (ESDM) seeks to increase investment in oil and gas.

Several things have been done, including improving terms and conditions in the offer of oil and gas working areas, flexibility in the form of cooperation contracts, as well as tax and incentive facilities.

"The government continues to strive to increase the oil and gas investment climate. We listen to investor input including KKKS and strive to improve services for the better," said Director General of Oil and Gas Tutuka Ariadji, quoted on Thursday, June 15.

Tutuka explained, the Government made improvements to the terms and conditions at the oil and gas work area auction (WK) in the form of first Tranche Petroleum (FTP) sharing improvements of 10 percent shared, bonus signatures open bids, flexibility in the form of contract sharing results, DMO prices by 100 percent ICP, there is no obligation to return part of the working area for the first three years, no cost selling for Cost Recovery and convenience for accessing data packages through membership mechanisms.

The government provides an interesting profit sharing where for high-risk oil and gas working areas. For gas, the profit sharing can reach 50 percent for the Government and 50 percent for KKKS," continued Tutuka.

This 50:50 profit-sharing improvement, he continued, has been implemented in a number of oil and gas cooperation contracts, including Blok Agung I and Blok Agung II which are managed by bp.

The government is also trying to improve terms and conditions for existing blocks to increase production, improve upstream oil and gas data, and simplify licensing.

"We realize that Indonesia's competitiveness is not as high as neighboring countries. However, we are trying to increase the IRR (Internal Rate of Return) which is mutually beneficial for the Government and the KKKS," said Tutuka.

Regarding taxation and incentives, the Ministry of Energy and Mineral Resources and the Ministry of Finance have the same understanding to provide this facility in order to support oil and gas businesses. This tax and incentive facility is also expected to be provided for CCS/CCUS activities.

In addition to these things, the Government supports the revision of Law No. 22 of 2001 concerning Oil and Natural Gas which is an initiative of the DPR.

Meanwhile, regarding the form of a cooperation contract, he said, the Government is revising the rules regarding Gross Split's cooperation contract to be simpler. "We are trying to simplify the form of Gross Split's contract. Draft proposals have been submitted to stakeholders, as well as receiving a number of improvement inputs. It is hoped that within the next one or two months it can be completed," concluded Tutuka.