Oil and Gas industry is an important sector in the national development both in terms of meeting the needs of energy and industrial raw materials in the country and as a producer of foreign exchange so that management needs to be done optimally. In an effort to create business activities of oil and gas independent, reliable, transparent, competitive, efficient, and environmentally sound conservation and encourage the development and potential national role so as to support the sustainability of national development in order to realize an increase in prosperity and welfare of the people, has been set Invite No. 22 Year 2001 on Oil and Gas.
These laws provide a legal basis for the renewal and restructuring of the national oil and gas business activities considering legislation (Law 44 Prp. 1960 on Mining and Oil and Gas Law No. 8 of 1971 concerning Oil and Gas Company earth State) is no longer appropriate to the current situation and the challenges to be faced in the future.
As defined in the Law. 22 In 2001, the Downstream Oil and Gas cored or rely on business activities Processing, Transportation, Storage, and / or Commerce and administered through a mechanism that is fair competition, fair and transparent. However, the Government remains obliged to ensure the supply and distribution of fuel oil as a vital commodity and master the lives of many people throughout the Republic of Indonesia and regulate business activities through a pipeline transporting natural gas so that its use is open to all users and encourage increased use of natural gas in in the country.
In carrying out the responsibility for the regulation and supervision of business activities and the fuel supply and distribution of natural gas transportation business through the pipeline in order to ensure the supply and distribution of fuel throughout the Homeland and encourage increased use of natural gas in the country, the government as mandated by Law no. 22 of 2001 has established an independent body is the Governing Body Fuel Supply and Distribution of Oil and Gas Business Activities Through Pipeline Transportation (Government Regulation no. 67th of 2002 in conjunction with the Presidential Decree. 86 of 2002), hereinafter called the Agency’s Governing Body downstream Oil and Gas (BPH Migas). To implement the provisions of Act 22 of 2001, especially concerning the downstream oil and gas operations, the Government has issued Government Regulation 36 of 2004 on the Downstream Oil and Gas.