document: On 6 February 2019, Pertamina Hulu Energi (PHE) and regional government-owned company PT Migas Hulu Jabar ONWJ (MUJ) signed an addendum to a previous agreement for the transfer of 10% participating interest (PI) in the Offshore Northwest Java (ONWJ) PSC from PHE to MUJ. The addendum addressed calculations of tax obligations for both partners in relation with the gross split contract for the block. In addition, the regional government via MUJ committed to support upstream activities in the area by simplifying and accelerating the issuance of the necessary permits. The addendum is expected to ensure sustainable long-term cooperation between Pertamina and the local administration in West Java.  The addendum is a follow-up of the initial agreement signed on 19 December 2017, whereby PHE transferred the 10% PI to MUJ, in accordance with Regulation of Ministry of Energy and Mineral Resources No. 37/2016. Pertamina Hulu Energi is operator of the block, following a twenty-year extension signed on 18 January 2017. The ONWJ contract was the first to adopt the new Gross Split scheme which was implemented by the government on 16 January 2017.  Oil and gas production from the block is being used entirely to support national strategic needs such as fuel, power plants and raw materials for fertilizer production. The latest development in the ONWJ PSC was the SP field, which was brought onstream in October 2018. The field has a production capacity of 30 MMscfd, catering for local consumption. SP was the first field development project carried out under Gross Split fiscal terms.  MUJ is a business unit controlled by the Jakarta and West Java provincial governments, and by several regencies in the West Java area.  Background Information  PT Pertamina and SKK Migas, witnessed by Indonesian Minister of Energy and Mineral Resources, signed an extension for the Offshore Northwest Java (ONWJ) PSC on 18 January 2017. The contract will be valid for 20 years, from 19 January 2017 to 18 January 2037.   The final government/contractor split for the new contract was set at 42.5%/57.5% for oil and 37.5%/62.5% for gas. Financial commitments for the first three years of the contract will be USD 82.3 million. Signature bonus to be paid by Pertamina is USD 5 million. Total investment for the 20-year duration of the contract is estimated at around USD 8.5 billion.  The ONWJ PSC was originally awarded in 1967. The interest split in the block until 18 January 2017 was Pertamina Hulu Energi with 58.2795%, EMP ONWJ Limited with 36.7205% and Kufpec with 5%.
summary: On 6 February 2019, Pertamina Hulu Energi (PHE) and regional government-owned company PT Migas Hulu Jabar ONWJ (MUJ) signed an addendum to a previous agreement for the transfer of 10% participating interest (PI) in the Offshore Northwest Java (ONWJ) PSC from PHE to MUJ. The addendum addressed calculations of tax obligations for both partners in relation with the gross split contract for the block.