DPR Accelerates Oil and Gas Bill, SKK Migas to Be Replaced by Special Business Entity

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is likely to be replaced soon by a Special Business Entity (BUK) for Oil and Gas.

This comes as the House of Representatives (DPR) accelerates deliberation of a bill that would replace Law Number 22 of 2001 on Oil and Gas with a new law.

Member of Commission XII of the DPR, Eddy Soeparno, said the provision is proposed in the draft Oil and Gas Bill to provide legal certainty. According to him, the institutional change is a response to the mandate of the Constitutional Court, which has annulled several articles in the old law since 2012.

“It has long been our concern because the revision of the Oil and Gas Law has long been a mandate from the Constitutional Court to revise several articles that have been annulled. Therefore, we feel it is very important now to revise the Oil and Gas Law,” he told CNBC Indonesia, quoted on Monday (31/8/2026).

Going forward, the BUK is designed as a business entity with the authority to manage upstream operations while also acting as a regulator. Unlike SKK Migas, the new institution is proposed to be placed directly under the coordination of the President to cut bureaucratic channels.

“So the first highlight that has become the focus of many parties is the Special Business Entity, the BUK, as the replacement for SKK Migas. The BUK proposed in the bill is a business entity that is directly responsible to the President,” he explained.

Eddy added that the BUK will become the institution holding working areas throughout Indonesia, where other parties wishing to participate in the upstream sector must cooperate with the entity.

He is targeting the deliberation of the regulation to be completed as soon as possible and is aiming for completion by October 2026.

Meanwhile, Deputy Chairman of Commission XII of the DPR, Bambang Haryadi, stressed that SKK Migas was established only to fill a temporary legal vacuum. He said the Oil and Gas Bill is a long-term solution to unite the functions of control and exploitation of oil and gas in accordance with the constitutional mandate.

“The Oil and Gas Bill has indeed been discussed since 2015. Following the Constitutional Court ruling at the end of 2012 which dissolved BP Migas because it was deemed contrary to the 1945 Constitution, Presidential Regulation 9 of 2013 was issued to fill the temporary legal vacuum by establishing SKK Migas,” said Bambang.

Bambang said the fundamental difference in the latest draft lies in full state control over all oil and gas business activities.

“The goal is clearly to implement the Constitutional Court ruling. The important point is that control and exploitation must be controlled by the state. Law 22 of 2001 separated control and exploitation. In this Oil and Gas Bill, they are united in accordance with the Constitutional Court ruling,” he explained.

According to him, strengthening the legal foundation through the new law is expected to boost the investment climate in the upstream oil and gas sector. Certainty of institutional governance is considered key to improving the national oil production profile.

“That is indeed the goal,” said Bambang when asked whether the Oil and Gas Bill could have an impact on increasing oil and gas lifting.