KUALA LUMPUR (Feb 11): Globaltec Formation Bhd’s Australia-listed unit NuEnergy Gas Ltd has signed a gross split production sharing contract (PSC) for its Muralim PSC with the Indonesian Ministry of Energy and Mineral Resources.

The gross split PSC replaces Indonesia’s previous cost recovery scheme for oil and gas contractors in favour of a higher contract share of revenues, NuEnergy explained in a stock exchange filing today.

“Under the new regime, the government’s take no longer depends on the exploration and development costs incurred. The approval process for budgeting is therefore significantly streamlined and no longer bureaucratic, with the determination of optimal expenditure wholly in the discretion of the contractor,” it said.

“The conversion of the Muralim PSC to the Gross Split PSC is a step in the right direction that will provide the opportunity to strengthen the project economics, while at the same time lessening the bureaucratic burden on the execution of the project,” NuEnergy added.

NuEnergy had signed the gross split PSC with its Indonesian partner PT Medco CBM Pendopo, the company added.

NuEnergy recently moved to take control of the Muralim PSC, increasing its participating interest to 100% from 50%, after it signed a withdrawal and assignment agreement with Medco.

The agreement, which was signed on Jan 23, 2019, is subject to government approval. It will see Medco assigning all of its rights, obligations and liabilities under the PSC and joint operating agreement to be transferred to NuEnergy.

Shares of Globaltec rose 1 sen or 2.06% to 50 sen in morning trade today. The group had a market capitalisation of RM133.2 million.