The Constitutional Court’s decision to dissolve the upstream oil and gas regulator BPMigas caught most of us by surprise. The legal move against BPMigas had been launched by several organizations that deemed the institution “pro-foreign interests”.
This Court’s verdict comes as our oil production carries on its downward trend and consumption continues to go up.
Meanwhile, our domestic companies remain unable to contribute much to the national oil production (less than 25 percent), and state-owned oil and gas company PT Pertamina continues to generate comparatively low net income (roughly one sixth of Malaysian counterpart Petronas’).
What was this court ruling really all about? Let’s consider the issue at its most basic level.
Managing national petroleum resources involves three key functions: 1) Policy, which is conducted by the Energy and Mine...