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A leading player in the coal-bed methane energy sector said on Sunday investors should receive at least 82 percent of the gross revenue from such projects under a scheme the government is drafting to increase investment in the sector.

Currently, investors in such projects receive 45 percent to 49 percent of the net income, with the government getting the rest.

However, the government announced this year that it would introduce a more flexible revenue-splitting mechanism to attract more investment to the sector. It is proposing to split gross revenue, rather than net income, with investors, and give investors a larger share of that gross revenue in exchange for not allowing them to recover costs incurred during development and operation, which they are currently allowed to do.

Evita Legowo, director general of oil and gas at the Energy Ministry, said on Sunday that the proposed scheme had yet to be finalized and no numbers had been agreed on. She said coal-bed methane investors would be able to choose between the new system and the old system.

“They will be able to choose which method will be most beneficial for them. We hope this will drive investment in the sector,” she said.

Sammy Hamzah, chief executive of PT Ephindo, Indonesia’s leading coal-bed methane company, said that because investors would not be able to recover costs, they would need to receive more than 82 percent of gross revenue from projects to make it worth their while.

Sammy added that coal-bed methane projects required greater incentives for investors because it was a relatively new sector in Indonesia.

Ephindo is currently working on three domestic coal-bed methane projects.

Methane exists naturally in coal deposits.

Indonesia has estimated reserves of 453 trillion cubic feet, the second-largest in the world after China.

Since 2008, the government has signed 20 coal-bed methane production-sharing contracts with investors.

Energy Minister Darwin Zahedy Saleh said he expected five such projects, producing a combined 4.2 million standard cubic feet of gas a day, to come on stream next year.