Production?s split for Mahakam to use R/C scheme

By Febry Silaban

The government and state owned oil and gas firm PT Pertamina (Persero), which has been appointed to be the new operator of the Mahakam block in East Kalimantan after the current contract expires in in 2017, have agreed to use the Revenue Over Cost (R/C) scheme for the production split of the block in the new contract.

This was said by Director for the Management of Oil and Gas Upstream Activities at the Ministry of Energy and Mineral Resources Djoko Siswanto to Petromindo.com on Wednesday.

Under the R/C PSC scheme, which has been implemented in Malaysia since 1997, the greater the production, the greater is the split for the government.

The R/C scheme was picked up among for four alternative models put into consideration. Djoko said the R/C scheme has been chosen in response to the proposal from upstream authority SKK Migas?s Head Amien Sunaryadi to change the calculation of income and expenses for the block from the block basis to the Plan of Development (PoD) basis.

The government has also set signature bonus payable by Pertamina at a preliminary figure of US$41 million, Djoko said.

Editing by Johannes Simbolon