P roduction Sharing Contract (PSC) is used to determine the oil and gas sharing revenue between the state and the contractor. In this contract model, the share between the state and the contractor are divided after Gross Revenue minus Cost Recovery PSC until now is the most mutually beneficial contracts. It is because the Contractor’s Cost Recovery will be reimbursed and only confined by First Trance Petroleum (FTP). However, the enormous part of Cost Recovery has led the government to get smaller and smaller part. Several alternatives of new contracts model that are proposed should be more favorable for the state without reducing attractiveness for contractors. The options are to impose PSC-Gross Revenue and PSC-Gross Revenue-Sliding Scale. At PSC-Gross Revenue, Contractor IRR decreased as much as 19.16% and Contractor NPV of US$ 1,087,464,508.96 compared with PSC-FTP (85/15), this occurs as a result of cost recovery mechanisms omitted. However, PSC-Gross Revenue system is simpler in practice and increases Government Take as mush as US $ 12,132,855.06 so it is more profitable for the government. The advantage of the PSC-Gross Revenue and PSC-Gross Revenue-Sliding Scale is no issue of cost recovery that has been often considered a problem. The disadvantage, the government is less able to control the Contractor relating to local content obligations and other multiplier effects. The weakness of PSC-Gross Revenue is it’s IRR and NPV is very sensitive of changes in oil and gas prices, but the PSC-Gross Revenue-Sliding Scale contract model can overcome this weakness.