THE PRODUCTION SHARING CONTRACT BASIC TERM


There are some principles underlying the Production Sharing Contract:

  1. Production Sharing Contract was setup within the concept of the Indonesian Law No. 44/Prp/1960, Law No. 8/1971, Law No. 7/1983 and Ministerial letters related thereto.
  2. Pertamina on behalf of GOI (Government of Indonesia) shall be responsible for management of the operations in the Contract Area.
  3. CONTRACTOR shall be responsible for the execution of the operations, and shall provide all foreign exchange, technical assistance and carry the risk of all exploration costs.
  4. Indonesian participation: 10 %.

The Government of Indonesia/PERTAMINA, in securing its objectives as well as the Contractor's under said dynamics, has from time to time modified the PSC, not in terms of its principle features but more in its fiscal term. Such modifications were made to term. Such modifications were made to adopt to prevailing situational issues such as fluctuation in crude oil price, taxation, etc., as well as to non-situational factor such as the natural conditions of the acreage implying the risk and cost of exploration.



FLOW OF CONTRACT ARRANGEMENT

 

Announcement
The government of Indonesia announces New Petroleum Working

Area to be offered for tender.

Bid Invitation
It is special announcement subject to the numbers of the New Petroleum Working Area ready to be tendered.

Bid Information
It will contain the information on the tender process including the instruction to the bidders.

Clarification Forum

Data & Info

Bid Participation
The tender bidders should submit Working Program Commitment, Technical Evaluation, Information on Company Capability, Commitment Warranty to be the Government Tender Team.

Bid Evaluation
The Government Tender Team will decide the winning bidder based in the result of the evaluation on the bidder proposal. The Government Tender Team will report the result to the Minister of Energy and Mineral Resources.

Contract Awarded
The Government Tender Team give the draft PSC Agreement to Pertamina make initial of the contract terms and conditions with the contractor.

Contract Signing
Then the Minister report to the President for approval.