Indonesia cuts oil and gas exploration permits to focus on uplift from existing wells

The Indonesian government slashed the number of oil and gas exploration permits to 140, from 320 previously, to focus on optimizing existing wells and reactivating idle assets, Indonesia's Energy and Mineral Resources Minister Bahlil Lahadalia said late Oct. 14.

“If we cannot address lifting, then we should not dream of achieving energy sovereignty," Lahadalia said. “If there is no movement or action, [Indonesia’s oil and gas output] declines by about 7%-15% per year."

Indonesia has about 44,900 oil and gas wells, but only 16,990 are active. Of the remainder, Lahadalia added that about 5,000 wells can be reactivated to boost output.

To do so, the country has been utilizing technology like Enhanced Oil Recovery (EOR), which Indonesia's key producers Pertamina and ExxonMobil Cepu will use to further boost production.

Earlier in October, the ministry and upstream regulator SKK Migas said they are studying to introduce a policy for EOR implementation in the country.

This comes as Indonesia is striving toward its 2030 production target of 1 million b/d of oil and 12 Bcf/d of gas by 2030 to meet increasing domestic demand despite declining output.

“After the increase in production at Banyu Urip in 2008 reached 800,000-900,000 b/d, our oil production has continued to decline to only about 600,000 b/d now. Meanwhile, our consumption reached 1.6 million b/d, forcing us to import between 900,000 b/d to 1 million b/d,” said Lahadalia.

The country currently expects to produce 600,000 b/d of oil and 1.005 million boe/d of natural gas in 2025, according to its latest draft state budget, which is lower than its 2024 projection of 635,000 b/d of oil and 1.033 million boe/d of natural gas.

Despite reducing oil and gas exploration permits, Lahadalia said exploration must continue in East Indonesia to discover new oil and gas reserves.

“We will cut various regulations that hinder the acceleration process of exploration… we will further streamline it to ensure timely entry for investors,” Lahadalia said.