Abstract
The implementation of the gross split scheme in the upstream oil and gas business by revenue sharing contract is a new phase concerning the existence, especially for regional governments related to the insertion of regional assets. The participation of <em>BUMD</em> in the oil and gas management where the <em>BUMD</em> is located is prominent, in the context of increasing revenue and boosting the regional economy. The involvement of <em>BUMD</em> in oil and gas management is mainly related to the gross split mechanism. There are several problems, among others, related to the problematic management of <em>BUMD</em> whose business activities support the upstream oil and gas business to increase local revenue and how to implement the revitalization of <em>BUMD</em> governance that supports the upstream oil and gas business. This article is the result of empirical legal research by using a conceptual approach. Research techniques and data collection using primary and secondary material by analyzing the data through text interpretation (hermeneutics) and the logic of deduction. Based on the research on the revitalization of BUMD governance in the upstream oil and gas business that uses a gross split mechanism, there are several problems in its management, including overlapping sectoral arrangements regarding <em>BUMD</em> between one regulation with other regulations, management issues, human resources issue, supervision and guidance of <em>BUMD</em>, and restructuring of <em>BUMD</em>.
Highlights
The sovereignty over the natural resource in Indonesia is under the mandate of the Indonesian Constitution of 1945, especially in Article 33 paragraph (2) and paragraph (3): Paragraph (2): All the production branches which are important for the State and which take control of the public livelihood are controlled by the State
Accordance with Article 331 paragraph (4) The Law Number 9 of 2015 On Second Amendment to The Law Number 23 of 2014 concerning Regional Government said that the main goal of establishing BUMD, among others (Article 331 paragraph (4) Law Number 23 of 2014 On Local Government) (1) Providing general benefits for the regional economic development; (2) Organizing the public benefits in the form of providing quality goods and/or services for the fulfillment of people’s lives according to the conditions, characteristics, and regional potency based on good corporate governance; and (3) Obtaining a profit and/or economic margin
In connection with the revitalization of BUMD Governance in the framework of increasing regional original revenue through upstream oil and gas business activities using management strategies in the form of a Regional Company (Perseroda), the strategy adopted is to use the concept of a controlling company or form a holding company for business sectors that processing oil and gas
Summary
The sovereignty over the natural resource in Indonesia is under the mandate of the Indonesian Constitution of 1945, especially in Article 33 paragraph (2) and paragraph (3): Paragraph (2): All the production branches which are important for the State and which take control of the public livelihood are controlled by the State. The natural resources management that carried out by local governments can be through business sector mechanisms that are operated by BUMD. Accordance with Article 331 paragraph (4) The Law Number 9 of 2015 On Second Amendment to The Law Number 23 of 2014 concerning Regional Government said that the main goal of establishing BUMD, among others (Article 331 paragraph (4) Law Number 23 of 2014 On Local Government) (1) Providing general benefits for the regional economic development; (2) Organizing the public benefits in the form of providing quality goods and/or services for the fulfillment of people’s lives according to the conditions, characteristics, and regional potency based on good corporate governance; and (3) Obtaining a profit and/or economic margin.
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