Indonesia to Offer More Flexibility to Oil and Gas Explorers

Fathin Ungku, Bernadette Christina Munthe
Monday, August 3, 2020

Indonesia announced over the weekend that it had made revisions to a 2017 law that will give oil and gas investors more flexibility when choosing their contract options for exploration.

The revisions, which came into effect on July 16, allow contractors to choose between different sharing contracts including the "cost recovery" and "gross split" systems in an effort to boost investment.

Indonesia adopted the "gross split" scheme for oil and gas production deals in 2017, in which contractors shoulder the cost of exploration and production in exchange for retaining a bigger portion of the oil and gas they recover.

That represented a shift from the "cost recovery" scheme used previously, in which the government reimbursed the exploration and production costs borne by the contractors in exchange for a higher share of companies' oil and gas earnings.

"The government, through the Ministry of Energy and Mineral Resources, is officially allowing flexibility for investors to choose the form of oil and gas cooperation contracts," the energy ministry said in a statement on Saturday.

"This change is to provide legal certainty and increase investment in upstream oil and gas business activities," it added, referring to the exploration and drilling of new wells.

Under the revised law, expiring contracts no longer have to be converted to gross split production sharing contracts from cost recovery contracts.

In the case where state oil company PT Pertamina or its affiliates are appointed, the ministry will determine the cooperation contract.

 (Reporting by Fathin Ungku and Bernadette Christina Munthe; Editing by Ana Nicolaci da Costa)

Categories: Energy Drilling Industry News Activity Production Asia Exploration Regulations Indonesia

Related Stories

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

CNOOC Finds Oil and Gas in South China Sea

Chuditch Gas Field Drilling Ops Get Delayed to Next Year

CNOOC Starts Production at Offshore Field in South China Sea

CDWE Wraps Up Pin Pile Installation Job for Taiwanese Offshore Wind Farm

Valeura Concludes Eight-Well Drilling Campaign in Gulf of Thailand

Velesto’s Jack-Up Rig Set for Drilling Job off Indonesia

Hanwha Drilling’s Tidal Action Drillship En Route to Petrobras’ Roncador Field

CNOOC Puts Into Production New Oil Field in South China Sea

Borr Drilling Bags Three New Assignments for its Jack-Up Drilling Rigs

Current News

Sapura Energy Rebrands to Vantris Energy

BP, ONGC, Reliance Industries Ink Deal for Offshore Exploration in India

Allseas-Boskalis Consortium Bags $1.4B Offshore Gas Pipeline Job in Taiwan

CNOOC Brings New Offshore Gas Field On Stream

Yinson, PTSC Get $600M Contract for Vietnam-Bound FSO

PTTEP Buys Chevron's Hess Unit Share of Southeast Asia’s Offshore Block for $450M

Valeura Energy, PTTEP Partner Up on Gulf of Thailand Blocks

Sapura Scoops Over $118M for Chevron, PTTEP Subsea Ops off Thailand

Pandion Energy Divests Interests in Three Norwegian Assets to Inpex

China Starts Production at Major Oil Field in Bohai Sea

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com