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New oil and gas bill to replace SKK Migas with dual function BUK Migas

The House is deliberating a new bill that has been decades in the making to replace the oil and gas regulatory body SKK Migas with a dual function regulatory and business entity called BUK Migas.

Divya Karyza (The Jakarta Post)
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Jakarta
Fri, September 29, 2023

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New oil and gas bill to replace SKK Migas with dual function BUK Migas The sun sets behind an offshore oil and gas rig operated by Saka Energi Muriah Limited in the Kepodang Field of the Muriah Block, off the coast of Jepara, Central Java, in this undated handout photo from SKK Migas. (SKK Migas/SKK Migas.)
Versi Bahasa Indonesia

T

he House of Representatives has resurrected a long-awaited amendment to the decades-old 2001 Oil and Gas Law, which includes a major change to alter the function of the industry regulator, the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas).

Article 44 of the new bill replaces SKK Migas with the Special Oil and Gas Business Entity (BUK Migas), according to a draft seen by The Jakarta Post in early September.

The article also allows the new body to own a participating interest in oil and gas blocks and to sell oil and gas products as part of its production sharing contract (PSC), an arrangement that is not possible under the current law.

Maman Abdurrahman, deputy chair of House Commission VII overseeing energy and mineral resources who led the deliberation of the draft bill, did not immediately respond to a request for comment.

Earlier on Sept. 20, House Commission VII lawmaker Mulyanto said BUK Migas would be more than just a regulator, and would also be a “doer”.

“The authority of doing business will be carried out through a cooperation contract (KK), making investments as well as managing oil and gas funds,” Mulyanto said during an interview with CNBC Indonesia.

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This also covered selling oil and gas products, including exports, he added.

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