Indonesia to replace SKK Migas with special business entity

Indonesia is planning to replace the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) with a special business entity (BUK) through a revised Oil and Gas Law. The transition aims to fulfill a 2012 Constitutional Court mandate that required a permanent legal entity to manage the nation's natural resources, as SKK Migas was originally established as a temporary measure following the dissolution of BP Migas.

Legislators aim to finalize the draft law within the year. Proposed options for the new entity include merging SKK Migas with Pertamina or establishing it as an independent special business entity.

Experts suggest that transitioning to a business entity model will strengthen state control over assets and maximize national profits. By operating as a business, the entity can generate margins to be redistributed for public welfare, whereas the previous non-business structure often required paying fees to third parties for certain operations. Additionally, the change is expected to improve the oversight of state-owned assets used under Production Sharing Contracts (PSC), which are currently managed by contractors.