Illegal Oil Wells Produce Bad Perceptions, SKK Migas Encourages Governance Rules

Crude oil illustration (Photo: unsplash)

JAKARTA - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is determined to encourage the issuance of new rules to complete illegal wells in the community.

Deputy for Exploitation of SKK Migas Wahju Wibowo explained that one of the problems in the upstream oil and gas sector in Indonesia that urgently needed to be resolved was the existence of illegal drilling (illegal drilling) and theft of oil from official pipelines (illegal tapping).

According to him, the existence of illegal wells that do not meet HSE standards has caused accidents and environmental disturbances.

"In the long term, illegal wells also give rise to a bad perception of efforts to increase upstream oil and gas investment in Indonesia," he told the media quoted on Wednesday, May 14.

According to him, the existence of illegal wells in Indonesia must be brought under control immediately. However, considering the aspirations of the people conveyed to the local government and the DPR that illegal wells that are already operating are needed as livelihoods, it is recommended to create a clear legal umbrella on governance.

According to Wahju, so far the duties and authorities to handle illegal wells are in the Ministry of Energy and Mineral Resources, Regional Governments, and Law Enforcement Officials. SKK Migas only needs to report when it comes to knowing the incident and will move if there is a request from the Ministry of Energy and Mineral Resources, Regional Government and or Law Enforcement Officials, unless there is an assignment and or there is a coaching plan towards making a Cooperation Contract Umbrella.

"Not only support for agencies, we also provide assistance to stop fires and close illegal wells when an incident occurs," Wahju continued.

"The initiatives and actions taken by SKK Migas and KKKS when there was an accident in an illegal well are an effort so that the incident does not spread and cause greater losses to the surrounding community, We help prevent environmental damage from getting worse, and keep the oil and gas potential from being wasted and burning uselessly", Wahju added.

However, as a form of commitment to encourage good management of the upstream oil and gas sector, SKK Migas has proposed two regulations and compiled a study team related to regulation of oil well governance by the community. The two regulations recommended regarding illegal well governance are first, the Presidential Regulation (PerPres) which contains a ban on new illegal well activities going forward. Second, the revision of the Regulation of the Minister of Energy and Mineral Resources (ESDM) Number 01 of 2008 concerning Guidelines for Equipment of Oil Mining at Old Wells which will later become the basis for people managing illegal wells that have already been operating into legal wells that meet various standards and permits set by the state.

Just so you know, based on data from the Ministry of Energy and Mineral Resources (ESDM) in 2021, approximately 8,000 illegal wells in Indonesia were recorded with an estimated oil producing 2,500 10,000 barrels of oil per day (bopd). Throughout January 2023 until now, at least 7 (seven) illegal well accidents have occurred, all of which are in South Sumatra with details of 6 incidents in Musi Banyuasin and 1 incident in Muara Enim.

"Referring to the 2001 Oil and Gas Law, mining activities are only allowed through Cooperation Contract Contractors (KKKS). This provision confirms that well mining activities carried out other than KKKS must be prosecuted legally so that no more people become victims of life," said Wahju.

SKK Migas recommends both regulations for the Ministry of Energy and Mineral Resources to show that opening illegal oil wells is a serious crime for taking strategic natural resources that are fully controlled by the state. In addition to causing casualties, the state also lost potential income due to these illegal activities so that the presence of new regulations became very crucial.

As an effort to prevent illegal wells, SKK Migas has signed a memorandum of understanding with the Indonesian National Police and the Indonesian National Army. SKK Migas also carries out coordination procedures in the event of illegal well activities in the KKKS working area to socialize the cooperation of old wells in accordance with the Regulation of the Minister of Energy and Mineral Resources Number 01 of 2008 as a form of economic empowerment.

SKK Migas is also active in carrying out the Group Discussion Forum with the Ministry of Energy and Mineral Resources by involving the KKKS to convey to the community around the Working Area about the dangers of illegal wells and coordinating with the Coordinating Ministry for Political, Legal and Security Affairs. Wahju hopes that by carrying out all these efforts, all stakeholders will commit to stopping this illegal activity.

"SKK Migas will always coordinate actively with all stakeholders so that the national oil and gas industry remains conducive. We are optimistic that the reduction in illegal wells can have a positive impact on society, the state, the environment, and provide comfort for KKKS in carrying out activities in the Working Area," Wahju concluded.