Responding to plans to establish a Special Oil and Gas Business Entity (Badan Usaha Khusus/BUK Migas), which is projected to replace the role of the Special Unit for Upstream Oil and Gas Business Activities (SKK Migas), Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia explained that the institutional design of BUK Migas is still under discussion.
“The government is open to various possible institutional arrangements, as long as they can provide the greatest benefits for the interests of the nation and the state,” Minister Bahlil told reporters, as reported on Sunday, September 13, 2026.
He explained that SKK Migas itself was the result of an institutional change in the management of the upstream oil and gas sector. Previously, the government had BP Migas, before the institution was dissolved following a ruling by the Constitutional Court (MK).
“Everything is still under discussion. SKK Migas was actually BP Migas in the past, which was then annulled by the Constitutional Court, and subsequently established as an interim, ad hoc institution. I think all possibilities remain open. The important thing is that we find the best formulation for the good of the nation and the state,” he concluded.
It was previously reported that revisions to the Oil and Gas Law (Oil and Gas Bill) were being discussed again after remaining stalled for more than a decade. The House of Representatives (DPR RI) agreed to include the Oil and Gas Bill among the bills proposed by the DPR RI during a Plenary Meeting on Tuesday, August 18, 2026. One of the bill’s key provisions is the establishment of BUK Migas.
According to the circulating draft of the Oil and Gas Bill, Article 5 stipulates that the central government would delegate the management of upstream oil and gas business activities to BUK Migas, replacing the role currently held by SKK Migas.
Articles 63–69 of the bill would regulate the establishment, functions, authority, organizational structure, and funding sources of BUK Migas. The entity would subsequently take on a major role in the management and oversight of upstream oil and gas activities.
BUK Migas would be involved in the offering and management of Working Areas, the selection of contractors, the preparation and signing of Cooperation Contracts, as well as the management of revenues, assets, data, reserves, and the oil and gas shares to which it is entitled.
In terms of organizational structure, BUK Migas would have two main governing bodies, both appointed and dismissed by the President: a Supervisory Board consisting of seven members and a Board of Directors consisting of at least seven members, comprising a president director, a deputy president director, and other directors.
Meanwhile, Article 102, concerning the transition from SKK Migas to BUK Migas, would give the President a maximum of one year from the enactment of the law to complete the transition, either by establishing a new entity or by designating a state-owned oil and gas company (BUMN migas) as BUK Migas.
Until BUK Migas is established, SKK Migas would continue to carry out its existing functions and duties.
