Govt to introduce ?country basis? in contract

By Bernard Loebs

In further efforts to attract investors, the government will introduce new terms in the production sharing contract called ?country basis?.

This follows the recent introduction of ?block basis? for certain blocks which allows contractors to use revenue from the producing fields of a block to cover the exploration costs of other fields of the block. Previously, such practice was disallowed. The ?block basis? scheme has been applied among others in the extension of the contract on ONWJ block.

Director General of Oil and Gas IGN Wiratmaja said under the ?country basis? scheme, contractors are allowed to use revenue from producing blocks to cover the exploration costs in other blocks of their own.

The ministry has introduced several innovative contractual schemes to attract investors whose interest in investment has sharply declined due to the oil price drops.

Editing by Johannes Simbolon