Director General of Gas and Oil Affairs at the Ministry of Energy and Mineral Resources Evita Legowo said here on Thursday the 70:30 split was to be applied to contractors who conducted deep-sea explorations, especially in ​eastern Indonesia regions.
"We want more investors to become interested in the exploitation of oil fields in the eastern regions," she said.
She said the idea to introduce the 70:30 split system was developed by a team of engineers and university representatives.
"It should be a fair deal because the team that formulated it consisted of people from different disciplines such as experts in geology, production and infrastructure," Evita said.
In general, the current production sharing split ratio is 80-85 percent for the state and 15-20 percent for contractors.
The new production sharing split was calculated after deducting operating costs (cost recovery).
The government will offer 20 oil and gas blocks in the first stage of an auction with the blocks mostly located in eastern Indonesia seas.
Of the 20 blocks on offer in the first round auction, nine would be awarded through regular tenders and 11 through direct bids. (*)
Editor: Aditia Maruli Radja
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