Government to Deploy Unconventional Measures to Boost Oil Lifting to One Million Barrels Per Day
TEMPO.CO, Jakarta - Energy and Mineral Resources Minister Bahlil Lahadalia has stated that the government will employ innovative and unconventional measures to push national oil production, or oil lifting, to one million barrels per day by 2028–2029. The move is in line with President Prabowo Subianto's directive to realise a vision of national energy self-sufficiency.
"We at the Ministry of Energy and Mineral Resources have been compelled to take unconventional steps, because if we stick to conventional approaches, our lifting will simply remain stagnant," Bahlil said at the opening of the 49th Indonesian Petroleum Association (IPA) Convention and Exhibition in Tangerang, Banten, on Wednesday, 21 May 2025, as quoted by Antara.
Three Pillars of Lifting Strategy
In its efforts, the Ministry of Energy and Mineral Resources is relying on three key strategies:
- Production Technology Optimisation: Deploying cutting-edge technology such as enhanced oil recovery (EOR) and transitioning from vertical to horizontal drilling, which is considered more effective in extracting remaining oil reserves.
- Idle Well Reactivation: The government will bring back into operation approximately 16,000 oil wells that have been inactive, both under PT Pertamina and cooperation contract contractors (KKKS).
- New Basin Exploration: Some 68 of Indonesia's 128 oil and gas basins still hold significant potential. The government plans to auction 60 new oil and gas working areas by 2028 to open the door to investment and strengthen national energy reserves.
To attract investor interest, the government is preparing attractive incentives, including increasing the oil and gas revenue share to 50 per cent and offering an internal rate of return (IRR) of 15–17 per cent. The government has also signed production-sharing contracts for three working areas — Kojo, Binaiya, and Serpang — with a combined investment value of USD 13.3 million.
"We are providing an economically attractive sweetener formula. The aim is to increase the country's lifting targets whilst ensuring cooperation contract contractors do not incur losses and the state also profits — so we are arranging a win-win solution," Bahlil said.
Prabowo Affirms Energy Self-Sufficiency
Prabowo stressed the importance of energy self-sufficiency for the nation's independence and sovereignty. He noted that reducing oil imports would save hundreds of trillions of rupiah and strengthen the national economy.
"A nation that can meet its own energy needs will become a very strong nation," he said at the inauguration of the maiden production from the Forel and Terubuk oil fields in Natuna on 16 May 2025.
The oil fields, operated by Medco Energi, add 20,000 barrels per day of production capacity and represent the first project in the oil lifting sector under the new administration.
Currently, national oil lifting remains in the range of 580,000–690,000 barrels per day, whilst national consumption reaches one million barrels. Indonesia even imports 58 per cent of its oil from Singapore.
"This means we need to raise production by approximately 320,000 barrels. Resolving this lifting challenge requires focus, time, and total commitment," Bahlil said at the Presidential Palace in Jakarta on Thursday, 15 May 2025.
To that end, Bahlil emphasised the importance of accelerating production enhancement programmes, including the development of 300 wells that have been explored but do not yet have a plan of development (PoD).
Additionally, SKK Migas Head Djoko Siswanto expressed optimism about achieving the 2025 lifting target of 1.61 million barrels of oil equivalent per day through massive drilling campaigns, field reactivation, and the deployment of EOR and improved oil recovery (IOR) technology.
"We at the Ministry of Energy and Mineral Resources have been compelled to take unconventional steps, because if we stick to conventional approaches, our lifting will simply remain stagnant," Bahlil said at the opening of the 49th Indonesian Petroleum Association (IPA) Convention and Exhibition in Tangerang, Banten, on Wednesday, 21 May 2025, as quoted by Antara.
Three Pillars of Lifting Strategy
In its efforts, the Ministry of Energy and Mineral Resources is relying on three key strategies:
- Production Technology Optimisation: Deploying cutting-edge technology such as enhanced oil recovery (EOR) and transitioning from vertical to horizontal drilling, which is considered more effective in extracting remaining oil reserves.
- Idle Well Reactivation: The government will bring back into operation approximately 16,000 oil wells that have been inactive, both under PT Pertamina and cooperation contract contractors (KKKS).
- New Basin Exploration: Some 68 of Indonesia's 128 oil and gas basins still hold significant potential. The government plans to auction 60 new oil and gas working areas by 2028 to open the door to investment and strengthen national energy reserves.
To attract investor interest, the government is preparing attractive incentives, including increasing the oil and gas revenue share to 50 per cent and offering an internal rate of return (IRR) of 15–17 per cent. The government has also signed production-sharing contracts for three working areas — Kojo, Binaiya, and Serpang — with a combined investment value of USD 13.3 million.
"We are providing an economically attractive sweetener formula. The aim is to increase the country's lifting targets whilst ensuring cooperation contract contractors do not incur losses and the state also profits — so we are arranging a win-win solution," Bahlil said.
Prabowo Affirms Energy Self-Sufficiency
Prabowo stressed the importance of energy self-sufficiency for the nation's independence and sovereignty. He noted that reducing oil imports would save hundreds of trillions of rupiah and strengthen the national economy.
"A nation that can meet its own energy needs will become a very strong nation," he said at the inauguration of the maiden production from the Forel and Terubuk oil fields in Natuna on 16 May 2025.
The oil fields, operated by Medco Energi, add 20,000 barrels per day of production capacity and represent the first project in the oil lifting sector under the new administration.
Currently, national oil lifting remains in the range of 580,000–690,000 barrels per day, whilst national consumption reaches one million barrels. Indonesia even imports 58 per cent of its oil from Singapore.
"This means we need to raise production by approximately 320,000 barrels. Resolving this lifting challenge requires focus, time, and total commitment," Bahlil said at the Presidential Palace in Jakarta on Thursday, 15 May 2025.
To that end, Bahlil emphasised the importance of accelerating production enhancement programmes, including the development of 300 wells that have been explored but do not yet have a plan of development (PoD).
Additionally, SKK Migas Head Djoko Siswanto expressed optimism about achieving the 2025 lifting target of 1.61 million barrels of oil equivalent per day through massive drilling campaigns, field reactivation, and the deployment of EOR and improved oil recovery (IOR) technology.