BPH Migas Issues New Regulations on Regulatory Accounts through BPH Migas Regulation No. 4 of 2026

Introduction

On 26 October 2026, the Head of the Downstream Oil and Gas Regulatory Agency (“BPH Migas”) enacted BPH Migas Regulation No. 4 of 2026 on Regulatory Accounts for Business Entities Engaging in Natural Gas Transportation Activities Through Pipelines (“BPH Migas Regulation 4/2026”). This Regulation serves as a guideline for BPH Migas in implementing the governance of reporting and verification of Regulatory Accounts for business entity engaging in natural gas transportation activities through pipelines in an accountable, transparent, and efficient manner, supported by reliable data. A Regulatory Account is a set of accounting records prepared by a Business Entity specifically for the regulator, including asset valuation and depreciation. This report is separate from financial statements prepared for accounting and taxation purposes. It serves as the basis for BPH Migas in assessing the costs and tariffs for natural gas transportation through pipelines. In the context of this Regulation, a Business Entity refers to a company in the form of a legal entity established under applicable laws and regulations, conducting business activities on a permanent and continuous basis, and domiciled and operating within the territory of the Unitary State of the Republic of Indonesia.

BPH Migas Regulation 4/2026 was enacted to optimise the implementation, transparency, accountability, and presentation of Regulatory Accounts, while also aligning the provisions with legal developments. This Regulation also aims to ensure the availability of cost, revenue, and asset data presented separately by pipeline segment or region, with reference to audited financial statements, and to enable verification and adjustments.

Comparison

BPH Migas Regulation 4/2026 revokes and replaces in its entirety BPH Migas Regulation No. 21/P/BPH MIGAS/III/2011 on Regulatory Accounts for Natural Gas Transportation Business Activities through Transmission Pipelines.

Key Provisions

Parties Required to Submit Reports and Reporting Scope

Article 3 paragraph (1) requires business entities engaging in natural gas transportation activities through pipelines to prepare and submit Regulatory Account reports for each pipeline segment, pipeline network, Access Arrangement, and/or region. This obligation applies to business entities holding Special Rights for Natural Gas Transportation through Pipelines and/or business entities holding Special Rights for Distribution Network Areas that have obtained a Business Licence for Natural Gas Transportation through Pipelines, as stipulated in Article 3 paragraph (2).

Obligation to Separate Transportation Accounts from Other Business Activities

Article 3 paragraph (3) stipulates that Regulatory Account reports must be prepared by separating revenue, costs, assets, and other parameters relating to natural gas transportation activities through pipelines from those relating to other business activities. The preparation of such reports must refer to the annual financial statements for the same period, which must have been audited by a registered Public Accountant. This provision aims to ensure that the financial information used in the Regulatory Accounts specifically reflects natural gas transportation activities through pipelines and is not commingled with other business activities conducted by the business entity.

Submission of Audited Annual Financial Statements

Article 4 paragraph (1) requires business entities as referred to in Article 3 paragraph (2) to submit annual financial statements audited by a registered Public Accountant to BPH Migas. Where necessary, such financial statements may be supplemented with supporting documents as stipulated in Article 4 paragraph (2).

For business entities that constitute parent entities, the annual financial statements required to be submitted shall comprise:

1. annual consolidated financial statements; and

2. annual financial statements of the parent entity, which constitute supplementary information to the annual consolidated financial statements.

Furthermore, Article 4 paragraph (4) stipulates that such annual financial statements must, at a minimum, comprise the following components:

• balance sheet;

• income statement;

• cash flow statement;

• statement of changes in equity; and

• notes to the financial statements.

Minimum Contents of the Notes to the Financial Statements

Article 4 paragraph (5) stipulates that the notes to the financial statements must, at a minimum, contain the following information:

1. general information on the entity or company;

2. basis of preparation of the financial statements;

3. significant accounting policies;

4. explanations of the items presented in the financial statements;

5. additional information and other disclosures;

6. information on events after the reporting period relating to natural gas transportation activities through pipelines;

7. information on the revenue, costs, and assets of the natural gas transportation business segment, for business entities that also conduct other business activities; and/or

8. information on the revenue, costs, and assets of natural gas transportation activities through pipelines at the parent-entity level, for business entities submitting consolidated financial statements together with those of their subsidiaries.

Furthermore, Article 4 paragraph (7) provides flexibility for business entities that are not yet able to submit information on the natural gas transportation business segment through pipelines and/or information on transportation activities at the parent-entity level, as referred to in Article 4 paragraph (5) letters g and h. Such information must be submitted no later than the submission of the audited annual financial statements for financial year 2029. Accordingly, business entities are granted time to adjust their financial recording and reporting systems to enable them to present revenue, cost, and asset information in accordance with the reporting requirements for Regulatory Accounts.

Reporting Deadlines

Article 4 paragraph (6) and Article 5 of BPH Migas Regulation 4/2026 stipulate the annual submission schedule for Regulatory Account reports and annual financial statements, including the mechanism for submitting interim reports where audited annual financial statements are not yet available.

This mechanism ensures that delays in completing the audit process do not relieve business entities of their obligation to submit reports in accordance with the prescribed schedule. Where audited annual financial statements are not yet available, business entities remain obligated to submit an interim report no later than 30 June and submit the audited annual financial statements no later than 31 July.

Reporting Procedures

Article 6 of BPH Migas Regulation 4/2026 stipulates that annual financial statements and Regulatory Account reports must be submitted through BPH Migas's official online information application system. If the application system encounters technical difficulties or is not yet available, business entities may submit their reports manually in both physical and digital copy. Accordingly, online submission constitutes the primary reporting mechanism, while manual submission may only be carried out under certain circumstances as stipulated in Article 6.

Verification and BPH Migas's Authority to Make Adjustments

Article 7 paragraphs (1) and (2) of BPH Migas Regulation 4/2026 stipulate that BPH Migas shall verify Regulatory Account reports through document evaluation and, where necessary, on-site inspections of pipeline facilities. In the verification process, BPH Migas shall examine the following aspects:

1. compliance with the reporting submission deadlines;

2. compliance with the prescribed reporting format;

3. compliance with the separation of accounts relating to natural gas transportation activities through pipelines from the overall accounts presented in the financial statements; and

4. appropriateness of the allocation of costs or assets to natural gas transportation activities through pipelines.

To support the verification process, BPH Migas is authorised to request supporting documents and/or clarification from business entities, as stipulated in Article 7 paragraph (4). Furthermore, Article 7 paragraph (5) authorises BPH Migas to make adjustments to entries in Regulatory Account reports if business entities are unable to provide adequate explanations and/or produce supporting documents for the reported amounts. Accordingly, the accuracy of accounting entries and the completeness of supporting documents are important considerations for business entities, given that the results of BPH Migas's verification and adjustments may affect the amounts of costs and assets taken into account in the Regulatory Accounts.

The results of the verification shall subsequently be recorded in official minutes signed by the Director of Natural Gas of BPH Migas and the board of directors of the relevant business entity. Where the minutes are signed by a representative of the board of directors, such representative must hold a power of attorney issued by the board of directors of the business entity, as stipulated in Article 7 paragraph (6).

Transitional Provisions

Article 11 of BPH Migas Regulation 4/2026 stipulates that the submission of Regulatory Account reports for the financial year covering the one (1) year preceding the promulgation of BPH Migas Regulation 4/2026 shall continue to be completed in accordance with the provisions of BPH Migas Regulation No. 21/P/BPH MIGAS/III/2011 on Regulatory Accounts for Natural Gas Transportation Business Activities through Transmission Pipelines. Accordingly, Regulatory Account reports for financial years preceding the year in which BPH Migas Regulation 4/2026 is promulgated shall remain subject to the previous provisions, while the new provisions shall apply to the subsequent financial year.

Closing

BPH Migas Regulation 4/2026 strengthens the governance of Regulatory Account reporting by expanding the reporting scope, imposing obligations to separate financial information, establishing reporting deadlines, and enhancing BPH Migas's verification and adjustment authorities.

Business entities need to adjust their financial recording and reporting systems, ensure the completeness of supporting documents, and comply with the prescribed reporting schedule. Business entities should also take note of the transitional period for submitting segment and parent-entity information, which extends until financial year 2029, and await further technical guidance from BPH Migas concerning the use of the online reporting application.