Indonesia Offers Both Gross Split and Cost Recovery to Lure Back Major Oil and Gas Companies
Jakarta, CNBC Indonesia — Energy and Mineral Resources Minister Bahlil Lahadalia and Finance Minister Sri Mulyani Indrawati are continuing efforts to make Indonesia's upstream oil and gas investment climate more attractive, with the aim of enticing major global oil and gas companies to return to the country.
Bahlil made the remarks after holding a meeting of the SKK Migas Supervisory Board with the state treasurer. He said the government is no longer insisting on a particular production-sharing system, offering both gross split and cost recovery arrangements.
"The situation now is this: whichever option you prefer — gross split or cost recovery — we offer both. It is up to the contractors to choose whichever they consider more suitable. If they think gross split works well, we provide it. If they prefer cost recovery, we provide that too," Bahlil said at the Ministry of Energy and Mineral Resources building, as quoted on Wednesday (28 May 2025).
Bahlil expressed hope that this approach would accelerate the return of major investors who had previously departed from Indonesia, including French oil and gas company TotalEnergies.
"Which company has returned to Indonesia after previously leaving? Total, isn't it? They left and have now come back," he said.
Previously, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that Indonesia's upstream oil and gas investment climate remains attractive, following the return of several "Seven Sisters" companies that had previously withdrawn from the country.
Among those companies are Shell, Chevron, and TotalEnergies, all of which had pulled out of upstream oil and gas projects in Indonesia.
"This actually shows that those we used to call the Big Sisters, the Seven Sisters, still have an interest in entering Indonesia," said SKK Migas Programme and Communications Division Head Hudi D. Suryodipuro on the sidelines of the Indonesian Petroleum Association Convention and Exhibition (IPA Convex) 2025, as quoted on Wednesday (21 May 2025).
According to Hudi, the interest of these companies in returning to Indonesia is inseparable from the government's efforts to maintain an attractive oil and gas investment climate.
"This actually demonstrates that, through government efforts, cooperation, and of course the support of previous investors still present in Indonesia, there are many promises and hopes that those who were formerly in Indonesia can return," he said.
Bahlil made the remarks after holding a meeting of the SKK Migas Supervisory Board with the state treasurer. He said the government is no longer insisting on a particular production-sharing system, offering both gross split and cost recovery arrangements.
"The situation now is this: whichever option you prefer — gross split or cost recovery — we offer both. It is up to the contractors to choose whichever they consider more suitable. If they think gross split works well, we provide it. If they prefer cost recovery, we provide that too," Bahlil said at the Ministry of Energy and Mineral Resources building, as quoted on Wednesday (28 May 2025).
Bahlil expressed hope that this approach would accelerate the return of major investors who had previously departed from Indonesia, including French oil and gas company TotalEnergies.
"Which company has returned to Indonesia after previously leaving? Total, isn't it? They left and have now come back," he said.
Previously, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that Indonesia's upstream oil and gas investment climate remains attractive, following the return of several "Seven Sisters" companies that had previously withdrawn from the country.
Among those companies are Shell, Chevron, and TotalEnergies, all of which had pulled out of upstream oil and gas projects in Indonesia.
"This actually shows that those we used to call the Big Sisters, the Seven Sisters, still have an interest in entering Indonesia," said SKK Migas Programme and Communications Division Head Hudi D. Suryodipuro on the sidelines of the Indonesian Petroleum Association Convention and Exhibition (IPA Convex) 2025, as quoted on Wednesday (21 May 2025).
According to Hudi, the interest of these companies in returning to Indonesia is inseparable from the government's efforts to maintain an attractive oil and gas investment climate.
"This actually demonstrates that, through government efforts, cooperation, and of course the support of previous investors still present in Indonesia, there are many promises and hopes that those who were formerly in Indonesia can return," he said.