JAKARTA. Ministry of Energy and Mineral Resources (ESDM) confirmed to release the Regulation of Minister of ESDM on the contract of revenues sharing under the split gross scheme on 18 January.
The final draft of the ministerial regulation sets the basic split before tax in oil commodity as much as 70% for the government and 30% for the contractor. These numbers have decreased from 85% and 15%, respectively. Meanwhile, in the gas sector, the split before tax is 65% for the government, and 35% for the contractor. Previously, the split was 70% for the government and 30% for the contractor.
Director of Engineering and Environment of Ministry of ESDM Djoko Siswanto said, the government’s portion was reduced, on the grounds that the contractors have to bear all oil and gas production costs. “Previously, we bore the costs,” said Djoko, Monday (16/1).
The draft also sets the basic split after tax. In terms of oil commodity, the portions of the government and the contractor are 57% and 43%, respectively, while in terms of gas commodity the portions are 52% and 48% for the government and for the contractor, respectively. The contractor will have higher portion when dealing with non-conventional and deep sea projects.
In this case, the contractor will obtain an additional portion up to `16% if during the exploration the contractor finds non-conventional field with the content of CBM or shale gas. The similar scheme applies when the contractor conducts under the sea exploration at a depth of over 1,000 meter.
According to him, the internal rate of return (IRR) of the contractor under this gross scheme split is similar to the scheme of IRR cost recovery. "But the gross split scheme allows the contractor to save the licensing costs," he said.
However, Executive Director of the Indonesian Petroleum Association (IPA) Marjolijn Wajong claimed to have not heard the information about the details of the gross split "We have never been explained about that figure," said. He asked the government to conduct a study before issuing the regulation.
Chairman of the Energy and Oil and Gas Dvision of the Indonesian Chamber of Commerce and Industry (Kadin) Bobby Gafur Umar said, each oil and gas field has specific exploration costs. “Investors of oil and gas upstream consider the factor of economic value versus risks and legal certainty," he said.
Executive Director of Reforminer Pri Agung Rakhmanto said that gross split scheme has more efficient bureaucracy and administrative processes. "Whatever the form of the contract, state revenues will remain the same," he said.
(Muhammad Farid/Translator)
