Source: CNBCIndonesia.com | September 10, 2026

Deliberations on the revision of the Oil and Gas Law (RUU Migas) at the House of Representatives (DPR RI) have recently been accelerated. However, amidst this push for speed, discussions regarding the regulation—which is set to replace Law Number 22 of 2001—remain arduous.

One of the key issues drawing attention is the plan to establish a Special Oil and Gas Business Entity (BUK Migas). This new institution would replace the role of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), a move projected to bring about major changes to the governance of the national oil and gas industry.

So, will this BUK Migas be capable of elevating Indonesia’s status once again to that of an oil “King”?

The issues currently coming to the fore concern not only the authority of the BUK Migas but also who will act as the operator and hold control over the institution.

Based on discussions and information received by CNBC Indonesia, several options regarding the positioning of the BUK Migas have emerged: First, placing the BUK Migas directly under the President, thereby establishing a direct line of accountability to the head of state.

Second, placing the BUK Migas under PT Pertamina (Persero). Third, placing the BUK Migas under the Ministry of Energy and Mineral Resources (ESDM).

These differing views on its positioning have become a crucial point in the deliberations on the Oil and Gas Bill.

Komaidi Notonegoro, Executive Director of the ReforMiner Institute, assesses that—based on the circulating draft of the bill—the BUK Migas is designed as a special business entity or a special state-owned enterprise (BUMN) tasked primarily with managing upstream oil and gas business activities.

“In the existing draft, the BUK Migas is a special business entity or special state-owned enterprise that manages the upstream sector,” Komaidi told CNBC Indonesia, as cited on Thursday (September 10, 2026).

According to Komaidi, the concept of the BUK Migas bears similarities to institutional models that previously existed for managing the upstream oil and gas sector. Prior to the establishment of BP Migas and subsequently SKK Migas, this function was housed within Pertamina’s organizational structure.

“In the past, the role was held by the BBPKA—part of a Pertamina unit or directorate—which later reincarnated as BP Migas under Law No. 2/2001, and subsequently became SKK Migas after the Constitutional Court annulled the previous arrangement. Its mandate is specifically to manage the upstream sector—namely exploration and production,” he said.

Furthermore, the BUK Migas concept bears some resemblance to Danantara, particularly regarding management functions. However, the scope of BUK Migas would be far more specific, as it focuses on the upstream oil and gas sector.

“Is it similar to Danantara? Danantara actually sits at a higher level, acting as an overarching orchestrator. There might be some resemblance to Danantara Investasi—specifically regarding the upstream oil and gas sector—but this entity would collaborate with partner contractors while also retaining the capacity to operate independently,” he added.

Meanwhile, oil and gas practitioner Hadi Ismoyo believes that the new BUK Migas entity should possess stronger authority than previous upstream oil and gas management bodies.

However, Hadi suggests that BUK Migas should focus on its role as a regulator, while operational functions remain the responsibility of PT Pertamina (Persero).

According to him, this division of functions is crucial to avoid overlapping authority between BUK Migas and Pertamina. By acting as a regulator, BUK Migas could more effectively manage and regulate the sector without usurping the operational roles that Pertamina has long performed.

“In my view, BUK should focus on regulation, whereas Pertamina already handles operations. However, BUK could allocate the Petroleum Fund for initial data acquisition; this would improve the quality and accuracy of the data for the offered Working Areas (WKP), thereby attracting major foreign investors,” he said.

Given the energy security challenges Indonesia faces, he believes BUK Migas should be placed directly under the President. Such a position would grant the agency greater authority to execute the President’s vision for national energy security.

Hadi argues that BUK Migas need not be modeled after Danantara, as that concept could lead to overlaps with Pertamina, particularly regarding operational functions.

Furthermore, BUK Migas should not be placed under Pertamina, as this could diminish the agency’s authority. He also advises against placing it under the Ministry of Energy and Mineral Resources (ESDM), fearing that doing so might constrain the agency’s ability to execute the President’s vision for national energy security.

“BUK should be placed under the President to ensure greater authority. It should not be placed under Pertamina; doing so would diminish its powers. The organizational structure should feature a direct reporting line to the President and a dotted line for coordination with the Ministry of Energy and Mineral Resources (KESDM).

BUK should not be placed under the Ministry of Energy and Mineral Resources either. It would be unable to execute the President’s vision and mission regarding national energy security,” he added.