Govt Seeks to Turn Regulator SKKMigas Into SOE With Own Ops, Assets


MARCH 05, 2015

Jakarta. The government will turn the graft-ridden upstream oil and gas regulator SKKMigas into a state-owned enterprise by the end of this month in a bid to enable the issuance of global bonds to accelerate development and exploration.

“Hopefully it will be finalized by this March,” said Energy and Mineral Resources Minister Sudirman Said at the president’s office on Wednesday.

Sudirman said the government made the decision after taking into consideration business aspects.

“It’s better to operate it as a business entity. Concept-wise it’s in line with what we already had in mind,” he said.

He added the government will keep SKKMigas separated from state-run oil and gas company Pertamina.

“Pertamina has to focus on becoming an operator, as an oil company that must continue to improve its competitiveness.”

Head of the ministry’s energy reform team, Faisal Basri, had previously recommended SKKMigas be turned into a special state-owned enterprise and to include the recommendation in the oil and gas law revision draft.

According to Faisal, SKKMigas should handle all processes related to the potential of national oil and gas.

Faisal said that by becoming a state enterprise, SKKMigas’ assets could not be frozen during disputes and that with procurement it could monetize Indonesia’s oil and gas potential and enable it to seek loans from banks.

In January, Sudirman discharged Johanes Widjonarko from his position as deputy chairman of SKKMigas.

“I signed the letter that honorably discharged Johanes Widjanarko. It was the recommendation from SKKMigas chief Amien Sunaryadi,” Sudirman said.

Johanes became SKKMigas deputy chief in 2012, when the body was named BPMigas. He then acted as interim leader a year later, following the arrest of then-chief Rudi Rubiandini following his involvement in a graft case.