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Govt considers offering additional split for Pertamina
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Workers tighten a drill at an oil and gas block in Indonesia. (Kompas.com/File)
T
he government is considering providing an additional split as an incentive for state-owned energy giant Pertamina to implement the gross split scheme in some of its oil and gas projects.
The government has mandated that Pertamina take over eight expired oil and gas blocks and operate them using a gross split scheme next year.
The blocks are the Tuban, Ogan Komering, Sanga-sanga, Southeast Sumatra, North Sumatra Offshore, Tengah, East Kalimantan and Attaka blocks.
(Read also: State budget no longer burdened by oil and gas activities: Deputy minister)
However, according to Pertamina’s assessment, a gross split scheme is only workable for seven of the blocks, while the other one, the East Kalimantan block, is too costly for such a mechanism.
Some of the seven blocks still need further support from the government in the form of an additional 5 percent split, the company claims.
“Some of the blocks need it [the additional split] and we will consider providing it,” Energy and Mineral Resources deputy minister Arcandra Tahar told reporters in Jakarta on Wednesday.
Under the gross split scheme, contractors are responsible for paying the costs of exploration and production instead of having these costs reimbursed by the government like in previous cost recovery mechanisms.
The new scheme was implemented in January at the Offshore Northwest Java oil and gas block operated by Pertamina’s subsidiary Pertamina Hulu Energi (PHE). PHE has also requested an additional 5 percent split to make the block more economically feasible.
“We’ve sent a letter to the government requesting an additional split,” PHE president director Gunung Sardjono Hadi said. (bbn)
