Purnomo seeks better incentives for E&P business

Minister of Energy and mineral Resources Purnomo Yusgiantoro on Monday proposed to the Cabinet better incentives for investors in the oil and gas industry to boost exploration.

Purnomo told reporters after a regular cabinet meeting that he wanted standard production contract splits changed to benefit operators more. He gave no details of the changes he had sought.

"I have proposed to change the splits. These should be changed to better terms for investors," Purnomo said, without saying when any decision might be made.

The current split for oil favours the government 85:15, while it is 70:30 percent for gas.

A year ago Indonesia offered more lucrative terms for new oil and gas contracts, but only in high-risk and remote areas.

This gives a split after tax of 75-80 percent for the government and 20-25 percent for investors on oil contracts. On gas contracts, the split is 55-65 percent after tax for the state and 35-45 for investors.(*)