Replacing diminishing reserves and guaranteeing domestic energy security are two of Indonesia’s policy priorities. As such, oil and gas exploration and development are key areas in which the government is eager to progress. To encourage this, policymakers have adopted a series of reforms aimed at ushering in a new wave of foreign investment into the sector. Similarly, in a bid to offset declining oil fields in western Indonesia, the government is working to incentivise contractors to explore deepsea areas along the eastern frontier. As part of these efforts, the government has sought to reduce red tape and promote transparency. One such reform was the adoption of new gross-split production-sharing contracts (PSCs) in early 2017, replacing the previous cost-recovery model used for over 40 years. As of March 2019 the impact of the gross-split mechanism was yet to be seen, but the authorities remain optimistic that it will encourage exploration […]