"It's a new PSC. It must be managed under a gross split scheme," said the ministry's oil and gas director general IGN Wiratmaja Puja, on the sidelines of a meeting at the House of Representatives complex in Jakarta on Tuesday.

The contractors -- consisting of state-owned oil and gas firm Pertamina, the local unit of United States oil and gas giant ExxonMobil, and Thailand’s PTTEP -- are currently conducting a technology market survey, a report on which is expected to be submitted to the government by the end of the year.

The government hopes the PSC will be signed next year.

The East Natuna block, formerly known as D-Alpha, is located in Riau Islands province. With a total proven reserve of 46 trillion cubic feet (tcf) of gas, it is one of the largest gas reserves in Asia.

However, the gas field has a high carbon dioxide (CO2) level of 72 percent, which needs advanced technology to maximize extraction and a sizeable investment for its exploitation.

It is estimated to require between US$20 billion and $40 billion.

Furthermore, previous studies indicate that development of the field would only be economically feasible if contractors obtained 100 percent of the profit share, leaving the government to reap revenues from the block’s taxes. (bbn)

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