JAKARTA, BN NASIONAL – Head of SKK Migas, Djoko Siswanto, has opened the possibility for cooperatives to manage old oil wells that have been illegally drilled by the public. This initiative aligns with the Oil and Gas Law, which does not prohibit cooperatives from engaging in upstream oil and gas activities, especially in old wells.
“Our Oil and Gas Law allows upstream oil and gas activities to be carried out by cooperatives, particularly for old wells that have been illegally operated,” Djoko said during a hearing with Commission XII of the House of Representatives (DPR) on Monday (11/18).
Djoko explained that such management has been successfully implemented in the Cepu Block, where a local cooperative managed oil and gas wells, and the production was purchased by PT Pertamina. SKK Migas is currently coordinating with the Coordinating Ministry for Economic Affairs to expand similar initiatives to other regions.
“The model in Cepu can serve as an example. We are identifying other potential old wells to be reactivated while continuing coordination with the Ministry of Economic Affairs,” Djoko added.
Illegal drilling, illegal refining, and illegal tapping remain significant challenges in Indonesia’s upstream oil and gas sector. According to Djoko, these illegal activities result in a loss of up to 8,000 barrels of oil per day (BOPD).
“The potential oil loss reaches around 8,000 BOPD. We need support from all parties to reduce these illegal activities,” he said.
Currently, discussions are underway on regulations for managing old wells, including drafting Presidential Regulations (Perpres) or Government Regulations (PP). These rules are expected to provide a clear legal framework to encourage cooperatives or other business entities to manage old wells legally.
Safety and Environmental Concerns
Hudi D. Suryodipuro, Head of the Program and Communication Division at SKK Migas, highlighted the negative impacts of illegal drilling on occupational safety and the environment. Illegal wells do not meet the health, safety, and environmental (HSE) standards required in the oil and gas industry, often leading to workplace accidents and environmental damage.
“Illegal drilling is the leading cause of workplace accidents in the upstream oil and gas sector. Additionally, it causes serious environmental pollution,” Hudi said.
He emphasized that while SKK Migas is not directly responsible for addressing illegal activities, the agency is often called upon to handle the consequences, such as fires or pollution resulting from illegal wells.
“The public often requests SKK Migas to address illegal drilling, even though enforcement is not our responsibility. However, we strive to assist within our capacity,” he added.
Allowing cooperatives to manage old wells is expected not only to curb illegal activities but also to sustainably increase the national oil and gas lifting.
