Indonesia's 2026 oil output target at risk as key fields struggle

Indonesia's oil production remained well below target in the first seven months of 2026 as a sharp decline at ExxonMobil's Cepu block and operational disruptions at Pertamina Hulu Rokan's flagship Rokan asset left the country nearly 20,000 barrels/day short of its state-budget goal, prompting authorities to seek additional barrels from drilling campaigns, mature fields and overseas production, according to a parliamentary hearing on Aug. 26.

The country's average oil production stood at 578,156 b/d as of July 31, well short of the government's 610,000 b/d target for the year, Laode Sulaeman, the director general of Oil and Gas at the Energy and Mineral Resources Ministry, told lawmakers.

"As of July 31, average oil production stood at 578,156 b/d," Sulaeman said. "Gas production realization was also below target. We are still working to reach the 2026 production targets."

SKK Migas head Djoko Siswanto said existing recovery measures outside approved work plans were expected to lift production to around 591,000 b/d, but output would still remain almost 20,000 b/d below the government target.

"Our estimate for filling the gap outside the work plan and budget program is around 591,000 b/d. There's still a gap of nearly 20,000 b/d," Siswanto said, adding that the shortfall was mainly at Pertamina Hulu Rokan (PHR) and ExxonMobil.

"We still hope to reach the state budget target of 610,000, or at least exceed last year's 607,000," he added.

The bulk of the shortfall is concentrated in Cepu and Rokan, which together are producing about 54,500 b/d below target, according to SKK Migas.

S&P Global CERA ranks Rokan and Cepu among Indonesia's largest producing upstream assets, with estimated 2026 production of 170,000 b/d of oil equivalent and 142,000 boe/d, respectively.

ExxonMobil-operated Cepu is experiencing a sharper-than-usual natural decline, Sulaeman said, and the government is working with the operator to hold output flat rather than let it slide further. Its output has fallen to about 124,000 b/d from around 151,000 b/d last year, against a state budget target of 148,000 b/d, Siswanto said.

A CERA report released Aug. 25 noted that Banyu Urip, the main producing field in Cepu, peaked at around 220,000 b/d in 2019-20 and has since entered a natural decline phase despite ongoing infill drilling campaigns aimed at sustaining production.

Rokan, meanwhile, has been hit by a gas pipeline leak at PT Transportasi Gas Indonesia, which disrupted gas supplies to the field, as well as by problems at the North Duri Cogeneration power facility, which supplies electricity for heavy oil production.

"At the beginning of 2026, there was a leak in the TGI pipeline, which caused Rokan production to be disrupted because the gas supply going to Rokan was obstructed," Sulaeman said.

PHR's production has fallen to around 133,000 b/d from roughly 151,000 b/d last year and remains well below its 2026 target of 163,000 b/d, according to SKK Migas.

Pertamina Deputy President Director Oki Muraza said mechanical repairs at the cogeneration facility had been completed and the company was working with state utility PLN to restore operations.

"Electricity is the key to heavy-oil production in Rokan, the key in the Duri area," Muraza said.

Aging fields

Beyond Cepu and Rokan, SKK Migas pointed to several other operational disruptions, including a switchgear fire at BP's Tangguh facility, pipeline problems at Pertamina's Subang operations, natural disasters in Aceh and North Sumatra, and leaks in aging subsea pipelines in West Java.

"There was a shutdown at BP due to the switchgear fire. The facility has not yet returned to 100%," Siswanto said.

To help close the gap, SKK Migas is leaning on extensive drilling and well-service work still planned for 2026, along with efforts to recover about 2.57 million barrels of crude classified as "dead stock." The agency expects these measures, combined with output from community wells, to help narrow the gap to the 610,000 b/d target.

"If we combine the programs I have mentioned, we can reach 610,000 b/d," Siswanto said.

For the longer term, Pertamina is pursuing enhanced oil recovery at the mature Minas field in the Rokan Block, Muraza said. He stressed that the field still holds about 4 billion barrels of the roughly 8 billion barrels originally estimated there.

"We will inject in Minas A this year and then continue to Minas B and so on," Muraza said.

Pertamina is also bringing crude back from its overseas production to support domestic refining. SKK Migas said the company plans to bring back about 2.5 million barrels, of which 1.7 million barrels have already arrived.

"This can also be factored in to strengthen the supply of our refineries," Siswanto said, adding that the move is meant to support refinery supply rather than directly solve the domestic production shortfall.