KERJA SAMA OPERASI CONTRACT (KSO CONTRACT) - SAVING THE BEST BITS FOR LAST

摘要

Mature and small oil fields in Indonesia present a challenge for Indonesia, requiring the attention of specialists in this area. The inception of KSO contract awards has brought in new players to pursue opportunities in small oil field investment. Understanding the elements that make up a KSO contract and how these lead towards a fair economic return to a potential Investor / Contractor are key to identifying and negotiating a viable small field contract. This study aims to explain the different components that make up KSO contracts, and contrasts them with other small field incentivized contracts in Southeast Asia. We evaluate how changes in the various components impact economic return from a model small oil field. This paper seeks to inform on the perspectives of the Investor / Contractor, Pertamina and the Government, leading to a potential improvement of KSO contract terms, appropriate bidding strategies and other potential risks involved in such investments.