POSCO International Corp. has signed a contract with the Indonesian government and its state oil company to search and extract oil and gas in the Southeast Asian country, as it bolsters the push for energy and resources development.
The production sharing contract (PSC) with Jakarta and state-owned PT Pertamina Hulu Energi (PHE) will give POSCO International the rights to explore the Bunga gas block off the eastern Java Island for six years, and develop and produce oil and gas in the field for 30 years.
A PSC is an agreement between a government and one or more natural resources companies on specifying the percentage of the extracted resources each party will get after the participating companies recover the costs and expenses.
The sharing ratio for the Bunga project is set at 60:40 for oil and 55:44 for gas between the Indonesian government and the two companies. POSCO International and PHE each hold a 50:50 stake for their participation in the project.
