Indonesian upstream oil and gas industry using PSC (Production Sharing Contract) framework enable the government to let the contractors bear all the risk of the exploration stage. Exploration stage is the stage where the risk of failure is at its highest. The failure rate at this stage is reported to be as high as 50%. Committed contractors will have to bankroll all the exploration expenditures without the guarantee of success to find the viable economic reserves. The framework will also let the government to preserve the ability to manage the fields in partnership with the contractors, as well as the ownership of the minerals up to the “Point of Delivery”. The other debatable issue around this framework is the concept of “Cost Recovery”, which the government will be compensating the contractors costs once a viable economic reserves discovered. Another main feature of the cost recovery scheme is that the cost of prior exploration activities, as well as the cost of production incurred by the contractors will be compensated using the sale of oil and gas production over the years.



Start from January 16, 2017, Indonesia took a large step toward eradicating the cost recovery regime for upstream cooperation contracts. Regulation of the Minister of Energy and Mineral Resources Number 8 of 2017 on Gross Split Production Sharing Contracts (“Regulation 8/2017”) sets out a new economic structure for production sharing contracts (“PSC”) based on dividing gross production between the state and PSC Contractors, without a mechanism for the PSC Contractor to recover operating costs

The Tungkal PSC is located onshore South Sumatra and contains the Mengoepeh, Mengoepeh South and SE Mengoepeh fields. 

Currently working as Drilling engineer prepare to drill new development well at Pemantang Lantih Field and Exploration well at Berkas Field

The Bontang PSC is located across 2,185 sq. km of transition zone in the Kutei basin, East Kalimantan. 

Working as drilling and workover engineer prepare 2 (Two) Re-activation program for exploration well and 1 (one) reactivation well for disposal at Tutung field from 2016 until 2018.

VICO Indonesia has been operating the Sanga-Sanga Production Sharing Contract (PSC), which is located in the Kutai Basin of East Kalimantan. 

Working as drilling engineer completed drilling 11 (Eleven) new development well at mutiara field from 2013 until 2016.