July 3, 2025
JAKARTA – The government aims to boost national oil output by tapping into community-operated oil wells, targeting an additional 15,000 barrels per day (bpd) by the end of the year.
The initiative follows the enactment of Energy and Mineral Resources Minister Regulation No. 14/2025, which formally legalizes community wells and outlines a clear framework for cooperation with the upstream oil and gas industry.
Before the issuance of the regulation, many local communities had been operating oil wells without permits or legal certainty.
“Maybe in August we will begin partial lifting, but the goal is to reach 10,000 to 15,000 bpd by the end of the year,” deputy energy minister Yuliot Tanjung said during a press briefing in Jakarta on Tuesday, as reported by Kontan.
The ministry has identified around 7,000 potentially productive community wells in Aceh, Jambi, South Sumatra, Central Java and East Java.
A joint task force will be deployed by the ministry to carry out a one-month field inventory, identifying viable wells and assessing operational needs. The results of this data collection are expected by the end of July.
Read also: TotalEnergies reenters Indonesia with 24.5% stake in Bobara Block
The new rule introduces three cooperation models, which are collaboration between oil and gas contractors (KKKS) and partners in idle or active production assets; partnerships involving community wells; and the management of legacy wells under Energy and Mineral Resources Minister Regulation No. 1/2008.
For community well operations, the regulation allows regional-owned enterprises (BUMD), cooperatives and micro, small and medium enterprises (MSMEs) to collaborate with KKKS.
These groups may now legally operate or manage wells under a four-year probationary period, subject to review by the ministry’s Directorate General of Law Enforcement.
“This approach legalizes existing activities while creating an economic multiplier effect in rural areas,” Yuliot added.
The initiative aligns with the government’s broader goal of boosting domestic energy production amid declining output from mature oil fields and the push for energy sovereignty.
In a hearing with House of Representatives Commission VII on Tuesday, the head of the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), Djoko Siswanto, revealed that oil lifting in May reached 567,900 bpd. Thus, he expressed optimism that the country would meet the state budget target of 605,000 bpd by the end of this year.
Indonesia aims to increase its oil and gas production to 1 million bpd and 12 billion standard cubic feet per day (bscfd) of gas by 2030 in an effort to reduce imports and meet growing domestic energy demand.
Read also: RI eyes oil and gas investment boost with new gross split tax rule
However, concerns remain over the lack of new reserve discoveries to replace depleting reserves, according to a PricewaterhouseCoopers (PwC) report published in 2023.
As noted by SKK Migas, investment in exploration areas amounted to just US$154 million in 2019, compared with $12 billion invested in exploitation areas.
These issues were also partly driven by the relinquishment and expiration of numerous oil and gas working areas, which declined from 312 in 2015 to 199 in 2019, according to the same PwC report.