Minister Bahlil: Gross Split's New Scheme Designed To Attract Global Investors

Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia. (Photo: Doc. ANTARA)

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the implementation of a new scheme for oil and gas cooperation contracts in the form of gross splits would spur investment in the upstream oil and gas sector.

According to him, the new profit-sharing scheme aims to provide more attractive incentives for investors, as well as accelerate exploration and oil and gas production.

"The new gross split scheme is more competitive and is designed to attract global investors. It is hoped that it can accelerate the increase in domestic oil and gas production capacity," Bahlil said as quoted by ANTARA, Sunday, December 29.

The signing of the cooperation contract for the Central Andaman oil and gas working area (WK Migas) is the first WK, which uses a new gross split scheme.

Cooperation contract contractor (KKKS) WK Central Andaman is a consortium of Harbour Energy Central Andaman Ltd and Mubadala Energy (Central Andaman) Rsc Ltd. As an operator is Harbor Energy.

The KKKS consortium has paid a signature bonus of 300,000 US dollars and delivered an implementation guarantee of 1.5 million US dollars.

The WK Central Andaman contract is a new history for investment in the oil and gas sector, because it is a contract with a new gross split scheme, the first in accordance with the provisions of the Minister of Energy and Mineral Resources Regulation Number 13 of 2024 concerning the Gross Split Revenue Sharing Contract.

The regulation replaces the Regulation of the Minister of Energy and Mineral Resources Number 8 of 2017 concerning the Gross Split Revenue Sharing Contract.

In addition, the Minister of Energy and Mineral Resources Decree is also determined Number 230.K/MG.01.MEM.M/2024 concerning Guidelines for Implementation and Components of Contract Sharing Gross Split Results.

The update of the regulation is carried out to maintain a balance between the interests of contractors and the government.

Salah satu poin penting pada aturan tersebut adalah kepastian bagi hasil yang diterima kontraktor, yang dapat mencapai 75-95 persen.

In the old gross split contract, the contractor yield sharing is very varied, can be very low, up to zero percent under certain conditions.

Bahlil added that the government also simplified the licensing process for the oil and gas sector to accelerate exploration activities.

The Ministry of Energy and Mineral Resources has cut hundreds of permits that have hampered the oil and gas exploration process.

Bahlil emphasized that the government had cut oil and gas exploration permits from 320 to only 140 permits to attract more investors and accelerate exploration.

"We want to ensure that oil and gas exploration is not hampered by complicated bureaucracy. We have cut down hundreds of permits to accelerate oil and gas exploration in Indonesia," said Bahlil.