Indonesia - 06

Indonesia: Prospects for New Exploration and Production Incentives

On 19 November Coordinating Minister for Maritime Affairs Rizal Ramli speculated that it would be beneficial for production-sharing splits to be more generous for IOC operators. The current after-cost recovery split for oil production allows 15% for the operator and 85% for the Indonesian government. Ramli noted that in order to attract investment, this split could be revised to 20% for the operator and 80% for the government. Ramli is not the only government official to have recently mentioned revising the production-sharing split to incentivize exploration and production: in recent months the National Economic Committee (KEN) has held public discussion on the advisability of making production-sharing splits more generous for operators.

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