Oil and Gas Cost Recovery Revenue Sharing Contract Revived

By Editorial Team 03/08/2020
Oil rig
Summary

The government officially allows investors to choose the form of oil and gas cooperation contracts, reviving the cost recovery production-sharing contract mechanism. The rules of the game are contained in the Minister of Energy and Mineral Resources (ESDM) Regulation No. 12/2020 on Gross Split Production Sharing Contracts. In a written statement on Monday (8/3), the Ministry of Energy and Mineral Resources said the regulation, which revised Regulation No. 8/2017 signed by Minister of Energy and Mineral Resources Arifin Tasrif on July 15 would provide legal certainty and increase investment in oil and gas business activities.

The government revised Articles 2 and 4, which regulates the forms and basic provisions of the gross split profit-sharing contract. The government also abolished the provision in Article 24, which regulates the imposition of a gross split profit-sharing contract for the management of the expiring work area that will not be extended, and those that will be extended. Moreover, the government also revoked Article 25 letter b, amended Article 25 letter d, and added Article 25 letter e.

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