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15 May 2013
PRESIDENTIAL REGULATION ON MANAGEMENT OF OIL AND GAS ACTIVITIES BY SKK MIGAS

As a follow up of Decision of the Minister of Energy and Mineral Resources Number: 3135 K/08/MEM/2012 which transfers the duties and functions of the Executive Agency for Upstream Oil and Gas Business Activities (BPMIGAS) to the Executive Task Force for Upstream Oil and Gas Activities (SKK MIGAS), the President of the Republic of Indonesia issued Presidential Regulation No. 9 of 2013 regarding Implementation of the Management of Upstream Oil and Gas Activities (the “Regulation”).
The Regulation basically stipulates that until the issue of a new law in the field of oil and natural gas, the management of upstream oil and natural gas activities is put in the hands of a special  task force named Special Executive Task Force for Oil and Gas Activities or “SKK Migas”. This SKK Migas will work under the supervision of a supervisory commission which is chaired by the Minister of Energy and Mineral Resources (ESDM) with the Vice Minister of Finance as the Vice Chairman, and the Head of BKPM and the Vice Minister of ESDM as the members.

 

Other highlighted provisions of the Regulation are as follows:

  • The Head of the SKK Migas is directly responsible to the President and must sign and submit an Integrity Pact and Performance Contract to the President;
  • SKK Migas may recruit a civil servant or a non civil servant as employee, but it must first recruit former employees of the BP Migas. All SKK Migas employees must sign an  Integrity Pact;
  • SKK Migas is given the authority to use BP Migas’ assets. The assets must be used by applying the optimum and efficiency principles.

 

The Regulation was issued on 14 January 2013 and has been in force since the date of its issue, with the exception of the provisions of Article 18 regarding operational costs, which came into force retroactively on 13 November 2012. (by: Ayik Chandawulan Gunadi).