Indonesia to Manage Oil Money: Tactics from These 16 Countries Could Be Copied
The discourse on establishing an oil and gas fund, or petroleum fund, has resurfaced after the Oil and Gas Bill (RUU Migas), intended to replace Law No. 22 of 2001 on Oil and Gas, was approved for further deliberation as a House of Representatives initiative bill during a plenary session on 18 August 2026. One of the key points in the RUU Migas concerns the petroleum fund. A portion of oil and gas revenues is proposed to be allocated to the petroleum fund, with the hope that these funds can be used for exploration, increasing reserves, infrastructure development, and energy technology research, particularly in the upstream oil and gas industry.
Member of Commission XII of the Indonesian House of Representatives, Eddy Soeparno, stated that the idea of establishing a petroleum fund is intended to finance the development of upstream oil and gas projects, including research. “Including the establishment of an oil and gas fund. So there is a Petroleum Fund, as it is called abroad, but this is an oil and gas development fund, so its purpose is for research, essentially to strengthen energy security in the oil and gas sector,” Eddy, who is also Deputy Speaker of the People’s Consultative Assembly, told CNBC Indonesia recently.
A similar idea has actually been studied by the Ministry of Energy and Mineral Resources since 2015. At that time, the petroleum fund was designed to finance high-risk exploration, maintain fuel price stability, and increase national energy storage facilities.
How does the petroleum fund mechanism work? How is it practised internationally? Has the petroleum fund actually been successfully implemented in other countries? Are there examples that Indonesia could follow?
Indonesia can look to other countries that have already established funds based on oil and gas revenues. However, based on CNBC Indonesia research, in practice these vary. Some invest oil money in global stocks and bonds, some save it for budget stabilisation, and others return a portion of the funds to energy projects.
Oil Money Does Not Always Return to the Well
The term petroleum fund in practice encompasses several forms of funds. There are funds that directly receive royalties and the state’s share from oil and gas production. There are also sovereign wealth funds that grow from the budget surpluses of oil-exporting countries.
Their investment objectives are then adjusted to their respective mandates. Oil and gas funds such as those of Norway, Kuwait, Abu Dhabi, and Qatar mostly use petroleum funds to invest in global financial assets. This strategy transforms oil wealth that will eventually be depleted into shares, bonds, property, and other productive assets.
Conversely, Azerbaijan, Iran, Nigeria, Libya, and Angola have greater scope to finance domestic development, including energy projects. This means that some funds do return to the oil and gas sector, but are still paired with non-oil and gas investments.
Three Patterns of Oil and Gas Fund Management
In general, there are three patterns of oil and gas fund or petroleum fund management in the world.
First, the global savings model, which invests oil and gas revenues across various countries and sectors. Norway is the clearest example because its fund is not used to finance domestic oil exploration.
Second, the stabilisation model, as seen in Kazakhstan, Trinidad and Tobago, Ghana, Guyana, and Algeria. These funds prioritise liquidity so they can be used when oil prices fall or the state budget comes under pressure.
Third, the mixed development model. Nigeria, Iran, Azerbaijan, Angola, Libya, and Russia can channel part of their wealth into domestic projects. The energy sector can obtain financing, but must compete with roads, electricity, health, agriculture, technology, and other productive sectors.
Indonesia’s Concept Is More Sectoral
The concept that has been studied by the Indonesian Government has a different character. The fund is designed to assist high-risk exploration, increase oil and gas reserves and production, maintain fuel price stability, and improve energy storage facilities.
Thus, Indonesia’s design is closer to an energy sector development fund than a global investment model like Norway’s. Funds can be placed in financial instruments, but the returns are directed back to strengthening energy security.
The lesson from other countries is that the source of money and the investment objective must be distinguished. Funds may originate from oil and gas without having to be entirely invested in oil and gas. However, if Indonesia’s mandate is indeed to strengthen exploration and energy infrastructure, the portion of its use must be clearly stated, professionally managed, and transparently audited.