Indonesia - 03

Indonesia: Officials Float Alternatives to Cost-Recovery and Production-Sharing System

Under Indonesia’s production-sharing system – in place for nearly half a century – most PSC operators are allowed to retain 15% of after-cost-recovery oil and 30% of after-cost-recovery gas, with the government keeping the remaining portions. PSC operators may soon have the opportunity to decline to participate in this system, and instead opt into a new system called the “gross split sliding scale.” Operators who opt into the scale would pay outright for all costs of exploration and production, and then split gross production evenly with the government – a “gross split.” However, if oil or gas production rises above a certain level…


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