Oil and gas are non-renewable natural resources, and the income from oil and gas is the significant for the development of Indonesia. Thus, Law of oil and gas is expected to be the reference of the oil and gas use. The law of oil and gas in Indonesia has to be based on the constitution of goals and objectives of the nation establishment.
Nevertheless, the issues of corruption, collusion, and nepotism (KKN) impact on the development of oil and gas sector in Indonesia. The other issue hampering the management of oil and gas in Indonesia is the limited infrastructure to support the production and distribution.
In a discussion of event series of the anniversary of Law Faculty of Universitas Muhammadiyah Yogyakarta (UMY) on Wednesday (10/2) at meeting hall of law faculty with a theme ‘The Barriers of Oil and Gas Management from time to time’, a lawyer as well as an observer of oil and gas law, Junaidi Albab Setiawan, S.H. L.LM. stated that oil and gas have strategic roles in fostering economy and development of Indonesia since both are the greatest income after taxes. “Oil and gas possess high economy values and are well known as political instruments as a proverb ‘who controls oil and gas is the real sovereign,” he told.
Seetiawan inserted that, if management and eradication are not conducted centrally and massively, corruption of oil and gas will never end. “The points which need to be cautious are dealing with working area and cooperative contract, production process management, cooperative contract extension, and data manipulation of cost recovery, pipeline, transortation, procurement auction, and production sharing contract,” he mentioned.
According to Setiawan Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) has significant roles to manage upstream oil and gas based on cooperative contract. “The establishment of SKK Migas aims at controlling the use of oil and gas in order to benefit nation and public welfare. The SKK Migas also functions as the authority, manager, doer, and controller collaborating with Ministry of Energy and Mineral Resources (ESDM).
