Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan challenged the oil and gas sector industry players to be efficient. This efficient practice will be applied to the gross split concept of profit sharing or oil and gas revenue sharing based on gross production. According to Jonan, the gross split concept is a directive from President Joko Widodo, who asks the upstream oil and gas industry in Indonesia to be efficient.
If the concept of cost recovery (operating costs that can be returned) which has been abandoned by a number of countries is maintained, it will be difficult for Indonesia's upstream oil and gas industry to be efficient. It is the people who bear the cost of recovery. With a gross split with no cost recovery, the company must be efficient. However, for contracts with cost recovery, they are still respected until the expiration date,” said Jonan.
Amien added that controlling cost recovery is more difficult than increasing Indonesia's ready-to-sell oil production. This year, it is estimated that the cost recovery to be paid to contractors is 11.4 billion US dollars, while the state's share is 9.29 billion US dollars and the contractor's share is 3.175 billion US dollars. Talking about the gross split described by Jonan, Syamsu believes that efficiency will be the key to winning the competition in the Indonesian oil and gas industry.
The role of technology is very important in terms of efficiency. The efficiency that has been carried out by Pertamina during quarter III-2106 resulted in a net profit of 2.83 billion US dollars. Satya does not object to the government applying the gross split concept as long as there is still state control.
This concept is expected to prevent budget waste by contractors which must be borne by the state in the concept of cost recovery. The Ministry of Energy and Mineral Resources (ESDM) is preparing legal protection for the gross split concept which is planned to be implemented starting 2017. This concept is intended for new oil and gas contracts.
Kompas, Page-19, Tuesday, Dec, 20, 2016
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