Inviting Investor, Migas Profit Sharing Should Depends on Operational Cost

JAKARTA. To interest investors to develop oil and gas (migas) business in Indonesia, Indonesian community have to be fair and not to consider them as enemy. As an example, it is better for new migas cooperation contracts, the amount of government’s profit sharing depend on the operational cost. If investors pay high cost, then the government profit sharing should be low. Otherwise, if investors pay low cost, then the government profit sharing should be high.

“Even thought the government’s profit sharing, let’s say 30 %, but it has many multiplier-effects; we could achieve gas, could export it and use it for domestic, new occupation, new tourism sites, and others. Do not view it as one side only and as the government, do not insist not to decrease its profit sharing because it won’t work. The government will get nothing (if there is no development),” says Vice Minister of EMR, Widjajono Partowidagdo.

This kind of profit sharing policy has been implemented in other countries, including Malaysia.

“If we took high profit sharing from small operational cost, it produces small result. Why should we waste time for such business. It is better because they want to invest, so just took small profit sharing from high operational cost, then it produce high result also,” adds Widjajono.

This kind of profit sharing is only implemented for new cooperation contracts only. For old contracts, there is no problem because at that time operational cost of petroleum activity as not expensive as now. Otherwise, recently most migas reserves are located in deep sea and remote area so its development cost is high.

“At that time there were no deep sea drilling, no deep sea, EOR. These cost expensive, “he says.

If government could accommodate it, Widjajono is sure that many investors will be interested in migas business in Indonesia. Recently, investors are unwilling to invest in migas business in Indonesia. It is proven by continuous decrease of migas reserves. (AK)