Jakarta - PT Pertamina Hulu Sanga Sanga (PHSS), a Production Sharing Contract Contractor under the supervision of SKK Migas, as well as part of the Pertamina Subholding Upstream Regional Kalimantan Zona 9, has obtained fiscal incentive approval from the Government of Indonesia through the Ministry of Energy and Mineral Resources (ESDM) on December 28, 2021.

The provision of these incentives is the Government's strategy to increase oil and gas reserves and production in order to achieve the national production target of one million barrels of oil per day and 12 billion standard cubic feet of gas per day by the year 2030. This incentive approval was given to the Sanga Sanga development plan incentive proposal, which has been initiated by PHSS since 2019 deliberating PP 53 of 2017 and regulation of the Minister of Energy and Mineral Resources 52 of 2017 regarding profit sharing adjustments by considering economics of the field in accordance with appropriate regulations.

Based on the incentive approval letter signed by the Minister of Energy and Mineral Resources=No. T-545/MG.04/MEM.M/2021, December 28, 2021 regarding the approval of changes to production sharing/split contracts for the Sanga Sanga Working Area (WA), PHSS acquired incentives in the form of additional revenue sharing/split of 20% starting 2021.

The President Director of PT Pertamina Hulu Indonesia (PHI)-Regional Kalimantan, Chalid Said Salim said that, this incentive is required to increase the recovery of oil and gas reserves and resources in the Sanga Sanga WA.

He said that, “In line with the proposed Sanga Sanga development plan, incentives are essential to maintain economics of the assets and promote the sustainability of investment in Sanga Sanga WA, which is important in conserving production levels to support the national oil and gas production target. This incentive is expected to unlock additional reserves of 230 million barrels of oil equivalent (MMBOE), from 38 MMBOE to 268 MMBOE.”

In 2021, PHSS recorded oil production figure of 12.2 thousand barrels of oil per day and gas production of 56.9 million standard cubic feet. PHSS will always be committed in improving operation and production performance to support the investment climate and national energy security, especially after receiving government incentive.