Head of The Upstream Oil and Gas Regulatory Task Force (SKK Migas), Djoko Siswanto, has opened up the opportunity for cooperatives to manage oil wells that have been illegally drilled by the communities without permission.
According to Djoko, the Oil and Gas Law provides flexibility for cooperatives to manage old wells, including those that have been operated illegally.
“Our Oil and Gas Law allows upstream oil and gas activities to be carried out by cooperatives, especially for old wells that have been managed illegally by the community,” Djoko told a hearing with Energy and Mineral Resources Commission XII of the House of Representatives (DPR), on Monday, November 18, 2024.
He cited that this management model has been implemented in several locations, such as in the Cepu Block, where the local cooperative manages old wells, while the production is purchased by State energi company PT Pertamina.
SKK Migas continuously coordinates with the Coordinating Ministry for the Economy to formulate regulations that will form the basis for the management of old wells by cooperatives.
Djoko said that this regulation could be in the form of a Presidential Regulation (Perpres) or Government Regulation (PP).
“Coordination continues to be carried out to identify the potential for old wells that can be reactivated under the management of cooperatives or business entities, including Pertamina’s contractors,” he said.
Impact of illegal drilling
Djoko highlighted the serious impact of illegal activities, such as illegal drilling, illegal refining, and illegal tapping, which until now are still a major obstacle for the upstream oil and gas industry in Indonesia. He said that these illegal activities cause the potential loss of oil resources of up to 8,000 barrels per day (BOPD).
“These illegal activities not only harm the state, but also hinder the national oil and gas lifting target. Therefore, SKK Migas needs support from all parties to overcome this matter,” Djoko said.
By integrating the management of old wells into the cooperatives, Djoko hopes that illegal activities can be minimized, while simultaneously increasing national oil and gas production.
“We are putting all efforts so that these old wells can be managed properly by business entities or cooperatives, so that oil and gas lifting can increase,” the SKK chief said.
This measure is considered as one of the strategic solutions to reduce illegal activities while empowering the local communities. However, Djoko also emphasized the need for strict supervision so that this initiative runs according to existing regulations.
