The Energy and Mineral Resources (ESDM) Ministry is expediting the regulations on unconventional oil and gas, targeting completion by June to enhance domestic output and protect Indonesia’s economy from a declining rupiah.
“(Upstream oil and gas regulator) SKK Migas has asked for the regulatory framework to be finalized by the end of June and put into effect in early July,” said ESDM Deputy Minister Yuliot.
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The policy initiative arrives at a crucial moment for Indonesia's currency. On Friday morning, the rupiah fell by 17 points, or 0.09 percent, trading at Rp18,066 per US dollar compared to the prior closing of Rp18,049.
A declining rupiah greatly raises the expense of Indonesia’s energy imports. Information from the National Energy Council (DEN) underscores Indonesia's significant vulnerability to global currency changes and supply chains.
The nation now uses approximately 1.52 million barrels of oil daily, whereas local output remains low at merely 610,000 barrels per day—making it necessary for the country to depend significantly on imported crude to meet the deficit. The scenario is equally critical for Liquefied Petroleum Gas (LPG). In 2026, national LPG demand is expected to reach 10 million tons, with a significant 7.8 million tons needing to be imported.
Yuliot states that the Indonesian government aims to actively reduce this dependence by utilizing unconventional oil and gas reserves.
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"If domestic production increases, it means we will also reduce imports and will be less affected by currency changes or fluctuations," he explains.
Although a ministerial decree regulating unconventional energy resources is already in place, the ministry pointed out that the existing framework fails to effectively attract large-scale investment.
Laode Sulaeman, the Director General of Oil and Gas at the ministry, confirmed that focused updates are being implemented to enhance operations and provide more robust institutional support to the state-owned energy corporation PT Pertamina.
"There are several things we need to revise to strengthen support for Pertamina," Sulaeman states.
The Ministry of Energy and Mineral Resources (ESDM) of Indonesia is putting 13 new oil and gas blocks up for auction at the Indonesian Petroleum Association Convention and Exhibition (IPA Convex), currently taking place in Tangerang. The government is providing both private and state-owned organizations the option to select their desired Production Sharing Contract (PSC) structure, choosing between either a gross split or a cost recovery approach.
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Moreover, the government is initiating a standard tender for the ABT 2025 research zone, encompassing the Rupat, Puri, Pesut Mahakam, Bengara II, Maratua II, Rombebai, and Jayapura operational areas. In this section, bidding documents will be available from May 20, 2026, until July 17, 2026, with a deadline for submissions on July 20, 2026.
In the meantime, the government is providing the Namori, South Tanimbar, Cerera, and Areca Bruni operational areas through the standard regular tender channels. Access to bidding documents for these blocks will be available from May 20, 2026, until September 15, 2026, with the deadline for submissions set for September 17, 2026.