Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Government hands over oil blocks in gross split scheme

Government hands over oil blocks in gross split scheme Energy and Mineral Resources Ministry secretary-general Ego Syahrial ( Ramdhani)
Stefanno Reinard Sulaiman
Jakarta   ●   Fri, June 8, 2018 2018-06-08 09:40 1069 a7124a1e87885b91d244660f9e82d9ec 1 Business oil-and-gas-blocks,agreement,gross-split-scheme Free

The government has officially signed contracts for two oil and gas exploration blocks under the gross split scheme.

The two contracts related to the on and offshore Merak-Lampung block located between Banten and Lampung province with oil firm PT Balmoral Gas and the Citarum block, an onshore block in West and East Java, with a consortium involving PT. Cogen Nusantara Energi and PT Hutama Wiranusa Energi.

Energy and Mineral Resources Ministry secretary-general Ego Syahrial told journalists at a press conference on Thursday that the agreements represented a milestone for new production sharing contracts under the gross split scheme.

“Both contracts prove that our new scheme [gross split] is interesting [for investors]. We asked the new operators to commit to a five-year exploration plan,” he said. 

The Merak-Lampung block investment commitment for exploration stands at US$1.3 million and the signature bonus stands at $500,000, while the Citarum block stipulates for a $3.75 million investment commitment and $750,000 signature bonus.

The contracts were offered after the government decided on the winners in an auction. In order to reach the assignment phase, the winners have to complete various requirements such as fulfilling the signature bonus, performance bonds and exploration investment commitment.

The assignment of the Merak-Lampung block contract was the latest among five blocks that the government has assigned since January.

Meanwhile, the Citarum block is among 26 blocks that the government offered in 2018, 24 of which are conventional blocks. However, as of May, only four blocks have been assigned -- Citarum, East Ganal, East Seram and Southeast Jambi – that will ink contracts on July 17.

As many as 20 oil and gas blocks have been and will be managed under the gross and split scheme since its kickoff in early 2017. (bbn)