Bahlil Issues Regulation to Accelerate Non-Conventional Oil and Gas Development, Here Are the Key Points

Jakarta, CNBC Indonesia - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia has officially issued Ministerial Decree (Kepmen) Number 246.k/MG.04/MEM.M/2026 concerning the Acceleration of Non-Conventional Oil and Gas Exploitation in the Rokan Working Area. The regulation was signed by Minister Bahlil Lahadalia on 11 June 2026 and takes effect from the date of enactment. This acceleration rule is intended for the development of working areas that hold non-conventional oil and gas reserves, applicable to both existing and new fields. There are several key points governing the acceleration of non-conventional oil and gas management in the Rokan area, covering technology, potential, contracts, and production sharing. The main points are as follows: First: a. Upstream oil and gas activities within a designated Working Area may be carried out using: 1. conventional; and/or 2. non-conventional technology. b. Conventional oil and gas exploitation as referred to in point a.1 is implemented under the existing Cooperation Contract. c. Non-conventional oil and gas exploitation as referred to in point a.2 may be proposed by the Contractor in the existing conventional Working Area as referred to in point b, where the areas overlap, based on the results of a non-conventional oil and gas potential study. d. The non-conventional oil and gas exploitation referred to in point c may be proposed: 1. as part of the existing conventional oil and gas Working Area; or 2. as a new non-conventional oil and gas Working Area. e. The costs of studying non-conventional oil and gas potential in the conventional Working Area as referred to in point c may be charged as operating costs. Second: Where the implementation of activities under the conventional oil and gas Cooperation Contract has been established, the implementation of non-conventional oil and gas in the Working Area as referred to in Diktum KESATU point d shall have its production split and incentives determined according to technical and economic feasibility, taking into account: a. the amount of capital and operating expenditure; b. oil and gas prices; c. the volume of oil and gas production. Third: The calculation of incentives as referred to in Diktum KEDUA shall be performed separately for the conventional oil and gas Cooperation Contract and the non-conventional oil and gas Cooperation Contract, based on the incentive scheme form, recording and reporting, and the term of the Cooperation Contract. Fourth: The implementation of the conventional oil and gas Cooperation Contract for the Rokan Working Area refers to the Minister of Energy and Mineral Resources Decree Number 1923K/10/MEM/2018 concerning Approval of the Management and Stipulation of the Form and Principal Terms and Conditions of the Cooperation Contract in the Rokan Working Area, as amended several times, most recently by Minister of Energy and Mineral Resources Decree Number 199.K/MG.04/MEM.M/2025. Fifth: The production split for the non-conventional oil and gas Cooperation Contract in the Rokan Working Area shall consider: a. the granting of incentives based on the results of the non-conventional oil and gas potential study. b. the recommendation of the Special Task Force for Upstream Oil and Gas Business Activities on the potential study results as referred to in point a, which includes: 1. technical aspects containing subsurface evaluation, activity plans, drilling technology, and production; 2. economic aspects covering parameters such as Internal Rate of Return (IRR), Net Present Value (NPV), and the State and Contractor shares; 3. the level of risk based on activity stages, location, data and infrastructure availability; and the greatest benefit for the state through increased investment and the creation of multiplier effects such as the utilisation of domestic goods and services, local economic development, employment absorption, and the provision of oil and gas as raw materials for downstream industries. Sixth: The Contractor may sell the non-conventional oil and gas production generated before the approval of the plan of development, with the sales proceeds divided according to the production split in the Cooperation Contract without first accounting for the first tranche petroleum and operating cost recovery. Seventh: A Contractor of a conventional oil and gas Working Area that is currently conducting, and may continue, a non-conventional oil and gas potential study within its Working Area.