Jakarta, W. Java reach agreement on PI in ONWJ block

The Jakarta and West Java provincial administrations reached an agreement over the distribution of a 10 percent participating interest (PI) in the Offshore North West Java (ONWJ) block.

The Jakarta administration said in a statement that the agreement was signed by Governor Djarot Sjaiful Hidayat and West Java Governor Ahmad Heryawan in Bandung.

Under the agreement, the Jakarta administration through provincial-owned company PT Jakarta Propertindo gets 20.29 percentage points, while West Java through PT Migas Hulu Jabar gets 79.71 percentage points. The West Java provincial administration will share its share allocation with four other regencies in the province including Indramayu, Subang, Karawang, and Bekasi.

Chairman of the upstream oil and gas authority SKK Migas Amien Sunaryadi expects the two provinces to provide support in accelerating business processes in the operation of the ONWJ block.

The government signed on January 18 a new production sharing contract of the ONWJ block, assigning the entire contract to the block?s previous operator PHE ONWJ, an indirect subsidiary of state-owned oil and gas firm PT Pertamina. The government applied for the first time the newly-introduced gross split scheme in the new ONWJ block contract, meaning that the operator will no longer get reimbursement from the government for its operating and production costs in return for greater output split.

Editing by Reiner Simanjuntak