Policy & Regulation

Indonesia revises unpopular gross-split PSC

The latest version of the contract removes the cap on how far the energy minister can adjust a contractor's share of production and has received more positive feedback The latest version of the contract removes the cap on how far the energy minister can adjust a contractor's share of production and has received more positive feedback.
By Damon Evans 6 September 2017 0 27468
Indonesian offshore infrastructure A flow station off the Indonesian coast. (SKKMigas)

Indonesia has revised its hugely unpopular gross-split production-sharing contract (PSC) after months of negative industry feedback.

The latest version, published on 29 August, has received more positive reviews. However, the new PSC does not appear to override regulation 42/2017, introduced on 21 July, which tightened state control over the sector and triggered uproar from investors.

The most fundamental change is the removal of the 5% cap on the ability of the energy minister to adjust a PSC contractor’s share of production – but only if a project...