Kartini L Makmur, Robert Sidauruk
The Special Works Unit for Upstream Oil and Gas Activities (SKK Migas) is currently the focus of much public attention following the recent arrest of its Head, Rudi Rubiandini.
Despite all the recent problems that have overwhelmed this institution, its critical role in oil and gas investment means that its ongoing operations are important.
According to the 2013 State Budget, SKK Migas failed to meet the most recent national oil lifting target. SKK Migas was only able to reach production of 840,000 barrels per day, below the projected daily production of 900,000 barrels.
The arrest of Rudi also further damaged SKK Migas’ reputation particularly as the institution that has not even been operating for a full year and yet it already faces allegations of corruption.
These issues have led to the voicing of a proposal to disband the institution. Some commentators believe that SKK Migas is no different to its predecessor, the Oil and Gas Supervisory Agency (BP Migas), which was dissolved by the Constitutional Court.
However, the fact that SKK Migas plays a critical and essential role in national oil and gas production must not be forgotten. In particular, its role as the authority that appoints traders of crude oil produced from upstream oil and gas business activities is an important core activity for oil and gas investment.
Widya Yudha, a member of Commission VII at the House of Representatives (DPR) believes that to disband SKK Migas would be counterproductive.
The most important step, as Widya said, is to evaluate disbursements paid by the Government to the contractors pursuant to the oil and gas production sharing contract mechanisms. This can be done by creating a clear and strict formula to calculate the exact amount for disbursements.
Other efforts to minimize possible corruption loopholes include reducing the authority ofSKK Migas. Widya elaborated that there is currently an overlap in the authority of SKK Migas and the Directorate General of Oil and Gas especially in the tender process.
“An equitable spilt of authority between both institutions will prevent excessive authority being concentrated in SKK Migas,” Widya concluded.
In addition, the oversight of SKK Migas also needs to be strengthened. Even though there is a Supervision Commission to control SKK Migas, not all matters are referred to the Commission.
For instance SKK Migas will consult the Supervision Commission on internal policies, the appointment of its Deputy Head,budgeting, and lifting targets. However, a more detailed activities such as tender process is not consulted to the Supervision Commission.
Jero Wacik, the Minister of Energy and Mineral Resources, who is also the Chairman of the SKK Migas Supervision Commission, has asserted that he will implement tighter oversight to prevent similar cases as the current bribery allegation involving Rudi Rubiandini.
(hot/kc)
Kartini L Makmur, Robert Sidauruk
The Special Works Unit for Upstream Oil and Gas Activities (SKK Migas) is currently the focus of much public attention following the recent arrest of its Head, Rudi Rubiandini.
Despite all the recent problems that have overwhelmed this institution, its critical role in oil and gas investment means that its ongoing operations are important.
According to the 2013 State Budget, SKK Migas failed to meet the most recent national oil lifting target. SKK Migas was only able to reach production of 840,000 barrels per day, below the projected daily production of 900,000 barrels.
The arrest of Rudi also further damaged SKK Migas’ reputation particularly as the institution that has not even been operating for a full year and yet it already faces allegations of corruption.
These issues have led to the voicing of a proposal to disband the institution. Some commentators believe that SKK Migas is no different to its predecessor, the Oil and Gas Supervisory Agency (BP Migas), which was dissolved by the Constitutional Court.
However, the fact that SKK Migas plays a critical and essential role in national oil and gas production must not be forgotten. In particular, its role as the authority that appoints traders of crude oil produced from upstream oil and gas business activities is an important core activity for oil and gas investment.
Widya Yudha, a member of Commission VII at the House of Representatives (DPR) believes that to disband SKK Migas would be counterproductive.
The most important step, as Widya said, is to evaluate disbursements paid by the Government to the contractors pursuant to the oil and gas production sharing contract mechanisms. This can be done by creating a clear and strict formula to calculate the exact amount for disbursements.
Other efforts to minimize possible corruption loopholes include reducing the authority ofSKK Migas. Widya elaborated that there is currently an overlap in the authority of SKK Migas and the Directorate General of Oil and Gas especially in the tender process.
“An equitable spilt of authority between both institutions will prevent excessive authority being concentrated in SKK Migas,” Widya concluded.
In addition, the oversight of SKK Migas also needs to be strengthened. Even though there is a Supervision Commission to control SKK Migas, not all matters are referred to the Commission.
For instance SKK Migas will consult the Supervision Commission on internal policies, the appointment of its Deputy Head,budgeting, and lifting targets. However, a more detailed activities such as tender process is not consulted to the Supervision Commission.
Jero Wacik, the Minister of Energy and Mineral Resources, who is also the Chairman of the SKK Migas Supervision Commission, has asserted that he will implement tighter oversight to prevent similar cases as the current bribery allegation involving Rudi Rubiandini.
(hot/kc)