Energy Security: Production, Exploration, and Investment
Referring to SKK Migas data, Indonesia achieved national crude oil production of 605,000 barrels per day in 2025. This figure is expected to continue rising in line with the production target of 610,000 barrels per day in 2026, supported by a massive drilling plan of 832 development wells and 39 exploration wells.
On the other hand, the national economic growth that is targeted to expand rapidly will have a direct impact on the surge in energy consumption in Indonesia. With domestic fuel needs continuing to increase, Indonesia certainly cannot simply rely on today's production. In fact, this production figure is still far from sufficient to meet the high total national energy consumption needs. Based on data from the Ministry of Energy and Mineral Resources (ESDM) and SKK Migas, total national crude oil demand has currently reached 1.4 to 1.7 million barrels per day. Therefore, to close this massive deficit, Indonesia cannot merely rely on aging oil and gas fields.
The good news is that Indonesia still holds enormous oil and gas potential, which, if proven, could become a reserve to meet national energy needs in the future. Of the 128 basins spread across Indonesia, only 60 basins have been explored so far. Most of the unexplored basins are located in the New Frontier regions and deep waters. This great potential below the surface will mean nothing without massive exploration activity to prove it as a commercial reserve. On the other hand, the effort to turn this great potential into actual production is also no easy matter, as it involves heavy operational challenges, ranging from high geotechnical risk and massive capital requirements to a long project timeline from exploration until oil or natural gas is successfully produced.
The exploration stage requires adequate infrastructure support, large-scale investment support, and the capacity to bear risk, as well as advanced technology. Therefore, the presence of global investors as strategic partners is unavoidable in the exploration and production of oil and gas in a country. To optimize this collaboration, aligning the investment climate through regulatory certainty and adaptive fiscal policy will further strengthen the competitiveness of Indonesia's upstream oil and gas sector. This effort to shape the investment climate and regulatory certainty will depend heavily on the government's efforts regarding its energy security vision amid global dynamics.
The Indonesian Petroleum Association (IPA) has pointed out that the main key to convincing global companies to invest their capital in Indonesia actually lies in the government's commitment. It emphasized that what investors need is sanctity of contract, political stability, and security guarantees.
The government, separately, has stated that through the Ministry of Energy and Mineral Resources (ESDM) and SKK Migas, it is fully committed to providing fiscal flexibility support to secure new reserve discoveries. The government also emphasized that it is always ready to provide full support for investors to accelerate their business in Indonesia, while ensuring that, amid the current global situation, the momentum of oil and gas investment in the country continues.
Although SKK Migas is known to have made efforts to integrate the licensing system with various related ministries, field operations are still hampered by overlaps with other sectors. A former chairman of BPMIGAS pointed out the need for regulations that function as support rather than administrative obstacles. Amid rising operating costs, he added, contractors urgently need flexible fiscal provisions and guarantees of contract sanctity in order to have the confidence to maintain their investment commitments. (*)
