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Government urged to explain new oil and gas scheme
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Workers tighten a drilling machine at an oil and gas block in Indonesia. The government will introduce a new sharing scheme for the oil and gas industry next year. (Kompas.com/File)
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awmakers and business players have called on the government to disseminate clear information on the gross split sliding scale that will be issued next year, in order to avoid confusion in the oil and gas industry.
Gerindra party lawmaker Harry Poernomo said the government had to ensure that the new mechanism, drawn up to replace cost recovery - a reimbursement scheme for oil and gas companies’ exploration and exploitation activities – did not contravene the Constitution, which mandates state control over all natural resources.
“We have to make sure the gross split sliding scale is in line with Article 33 of the Constitution [on state control on economy]. It has to allow for strong government intervention in the management of the country’s natural resources,” he said in a discussion on Wednesday.
(Read also: Lawmakers likely to miss Oil and Gas Law revision deadline)
Recently, the government announced that it plans to issue a gross split sliding scale next year for new contracts because it regards the current cost-recovery scheme as inefficient.
The new gross split sliding scale is expected to accelerate contract negotiations and attract more investors. In turn, it will increase oil production and save funds from the state budget that the government has allocated to pay for cost-recovery.
Responding to the new scheme, Ronald Gunawan, chief operating officer of Medco Energi International, said the company was extensively communicating with the government about the new scheme through the Indonesian Petroleum Association (IPA). (win/jun)
