Legal Risks in Oil and Gas Procurement Highlighted

Regulatory Responsibility Emphasized

The upstream oil and gas procurement process in Indonesia is under scrutiny due to potential legal risks associated with approval procedures. Kardaya Warnika, a senior oil and gas practitioner and former Head of BP Migas, highlighted that SKK Migas holds full responsibility for procurement approvals. Warnika's statement underscores that if these approvals are made in violation of regulations, the criminal risk falls on the regulator, not the Production Sharing Contractors (KKKS).

Strengthening Integrity in Procurement Processes

This warning comes at a time when SKK Migas is actively working to strengthen integrity in governance through cooperation with the Corruption Eradication Commission (KPK). Warnika stressed that all decisions related to imported goods, used goods, and cost recovery components must adhere strictly to prevailing regulations. He cited controversial cases like Jokotole as examples where KKKS acted merely as executors when SKK Migas provided approvals.

Implications of Non-Compliance

The legal implications of non-compliant approvals can be severe, potentially constituting criminal acts of corruption. Warnika clarified that as long as SKK Migas gives the approvals, the decision rests with the regulator. Consequently, if these approvals contradict regulatory frameworks, the legal consequences could extend into the realm of criminal liability.