Indonesia - 05

Indonesia: Gross Split PSCs: Improved Transparency in the Oil and Gas Sector?

Last week Minister of Energy and Mineral Resources Ignasius Jonan issued Regulation No. 08/2017 regarding so-called gross split PSCs. Offshore North West Java (ONWJ) block will be the first to replace cost recovery with this new framework. Under the gross split PSC, the Indonesian government will own any and all natural resources until the point of delivery. SKK Migas retains control and management of the PSC, while financial and operational risks are borne by the contractor. For oil, the base split will now be 57% for the state and 43% for the contractor for oil, while for natural gas it will be 52% for the state and 48% for the contractor.

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