Labour Union Says No to SKK Migas Operating Under Ministry, Pertamina
The Special Task Force for Upstream Oil and Gas BusinessActivities (SKK Migas) Labour Union has voiced its opposition to SKK Migas operating under a ministry or Pertamina, as the House of Representatives (DPR) reviews the revised oil and gas law.
Head of the SKK Migas Labour Union Dedi Suryadi said all energy management bodies or agencies, such as SKK Migas, should report directly to the President. This is evident, for example, from the fact that President Joko Widodo made the final decision on the development of the Masela Block for the greater good of the nation.
He said that this proved an energy regulatory body or agency could no longer operate under a ministry or a limited company. “We propose the formation of a permanent regulatory agency that reports directly to the President,” said Dedi in an official statement last week. (Read: Labour Union Proposes SKK Migas Report Directly to President)
The union also urged the government and parliament to speed up the deliberation over the new oil and gas bill so that it can be passed into law as soon as possible. SKK Migas’ employees and investors in the upstream oil and gas sector are plagued with doubt and uncertainty by the tentative status of SKK Migas.
Making SKK Migas a permanent agency, a special state-owned enterprise (SOE) for the energy sector, or one of the SOEs under this energy regulatory would make its employees more motivated to serving the country. “We guarantee that if this agency (SKK Migas) becomes a permanent institution, we would be able to increase national oil and gas production,” Dedi said. (Read: Oil, Gas Output Drops This Past Month).
As previously reported, the Constitutional Court (MK) dissolved the previous upstream oil and gas regulator BP Migas by virtue of decision No. 36/PUU-X/2012 and temporarily assigned the regulation ofupstream oil and gas activities to a minister. Under Presidential Regulation No. 9/ 2013, the government formed a temporary regulatory agency called the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).
The revision of the oil and gas law has been included in the 2016 National Legislation Program. Since BP Migas was disbanded in 2012 and the temporary regulatory agency called SKK Migas was formed, the government and parliament have made little headway towards finalising the revision of this law and establishing a permanent energy regulator.
Meanwhile, the parliamentary commission on energy has completed the process of gathering proposed points for revision in the draft oil and gas law, one crucial point being the status of SKK Migas.
Judging from a copy of the list of points proposed by the House obtained by Katadata, input about the upstream oil and gas regulator came from many factions. The Nasdem faction proposed a merger between SKK Migas and Pertamina. (Read: DPR Proposes Disbandment of SKK Migas in Talks Over Oil & Gas Bill).
The government, meanwhile, wants SKK Migas to stand alone as a special SOE, representing the government, as the partner for oil and gas production-sharing contracts (PSC), and plans to strengthen Pertamina’s position in the upstream sector.