New Regulation on Oil and Gas in a Disruptive Era

In the framework of managing oil and gas, the government in 2017 issued a new policy on oil and gas exploitation concerning gross split production sharing contracts in the form of Regulation no. 8 of 2017 by the Minister of Energy and Mineral Resources (ESDM) and Regulation no. 53 of 2017 of the Minister of Energy and Mineral Resources. This regulation was once debated throughout the oil and gas world because this new provision abolished the replacement of production costs known as cost recovery. The government believes that this new policy will be more effective and efficient; however, doubts remain over whether the policy for dividing gross split results is the answer that will enhance the prosperity of the people with regard to various problems in the oil and gas sector. In connection with the terms of the contract for gross split results, this article answers the question of whether the gross split system is associated with the welfare of society or the welfare of state. To answer this question, this article also explains the development of oil and gas management in Indonesia. The theory of the welfare state is used to answer this research question. Literature studies are used in the data collection techniques of this research study through interviews with a number of sources. Also, comparisons are made with other countries regarding oil and gas management.