Split of Natuna contractors portion to become 60%

The contractors of the East Natuna Block in the Riau Islands have the possibility of obtaining greater revenue split than the government of Indonesia because of the high investment cost of developing the gas block, Bisnis Indonesia reported on Wednesday.

Deputy Minister of Energy and Mineral Resources Widjajono Partowidagdo said that the investment cost is high because of the high CO2 content of the block.

?Determination of the split in the gas block will depend on the investment cost and return of capital. We (the government) understand the request of the contractors to obtain a greater portion. There?s a possibility for the contractors to obtain a 60 percent split, while the government gets 40%,? he said.

Separately, spokesman of BPMIGAS, Gde Pradnyana said that gas output from Tangguh project in Papua will be used for domestic interest particularly as there is a plan to develop petrochemical center in the province.

He said that how much exactly of the Tangguh output would be allocated for the domestic market will be determined after exact data on the gas needed of the industries in the province have been obtained. The Tangguh gas will also be used to supply energy to PLN power plants.

?The portion for the domestic market will depend on the size of PLN?s need and of the petrochemical industry. There has been gas request made to the Ministry of Energy and Mineral Resources, but no gas sale-purchase agreement yet to date,? Pradnyana said. (*)