“In the mineral and coal sector, there are absolutely no changes. It is important for me to convey this to reaffirm that the existing regulations remain unchanged. Forever,” Lahadalia said during a press conference at the Parliamentary Complex here on Monday.
The statement was made in response to reports that the profit-sharing scheme for the mineral and coal mining sector was planned to be revised to resemble the oil and gas profit-sharing scheme. There are two profit-sharing schemes in the oil and gas sector, namely gross split and cost recovery.
Gross split is a production-sharing contract scheme for oil and gas management between the government and contractors, under which revenue sharing is determined upfront based on a percentage of gross production without any operational cost reimbursement mechanism (cost recovery).
Meanwhile, the other profit-sharing scheme in the oil and gas sector is the cost recovery scheme. Under this scheme, operational costs incurred by oil and gas companies or Production Sharing Contract (PSC) contractors are reimbursed through deductions from the state's share of oil and gas revenues.
Regarding the plan to apply the oil and gas profit-sharing scheme to the mineral and coal sector, Lahadalia stated that the gross split scheme applies only to the oil and gas sector and will not be implemented in the mineral and coal sector. The policy, he said, will remain in effect permanently.
“The gross split system adopted by the Energy and Mineral Resources Ministry applies only to the oil and gas sector,” Lahadalia said.
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Translator: Putu, Kenzu
Editor: Primayanti
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