Indonesia debuts terms of future PSCs

JAKARTA, January 19, 2017 – The Indonesian government late on Wednesday signed off on new terms for future production-sharing contracts (PSCs).

Speaking at a press conference in Jakarta, Indonesian Minister of Energy and Mineral Resources Ignasius Jonan said the share of production reserved for the government would be lowered from 70% to 52% for gas and from 85% to 57% for oil.


The measure is designed to be a boon for contractors, while at the same time reduce the burden of development costs on Indonesia’s budget. At USD 11 billion, reimbursements came out USD 2.6 billion higher than budgeted for in 2016.

“This gross split [mechanism] means all expenses would be the responsibility of the contractor, no longer burdening the state budget,” Jonan said.

The country’s first new PSC was signed earlier on Wednesday between the government and Pertamina. Covering the Offshore North West Java block, the company will retain 62.5% of gas production and 57.5% of oil output.

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