The Upstream Oil and Gas Regulatory Task Force (SKK Migas) has prepared three main strategies to increase oil and gas lifting to meet the needs of the 1 million barrel oil refinery to be built by the government.

SKK Migas Spokesman, Hudi D Suryodipuro, said that the government has set the oil and gas sector as the main priority for Daya Anagata Nusantara Investment Management Agency (Danantara) funding for the construction of a new refinery. 

"Of course, there is a need (of crude oil) for the oil refinery," Hudi said at the breaking-of-the-fast event in Jakarta, on Wednesday, March 13, 2025.

SKK Migas has prepared three strategic measures to increase oil and gas lifting, namely optimizing production with technology, reactivating idle wells, and massive exploration.

Hudi cited that many oil wells in Indonesia are old, so it is necessary to apply advanced stage recovery technology or enhanced oil recovery (EOR) to increase oil production.

In regards with reactivation of idle wells, he said, currently there are around 4,500 wells ready to be reactivated. SKK Migas provides two options to the Oil and Gas Contractors (KKKS), namely managing idle wells themselves for reactivation or collaborating with third parties in the reactivation process.

Meanwhile, massive exploration is to resolve problem that the current oil reserves are not enough to achieve the production target of 1 million barrels per day.

Based on 2024 data, from 39 exploration wells drilled, reserves of 2,940 million barrels of oil equivalent (mmboe) were found, consisting of 532 million barrels of oil and 13.5 trillion cubic feet (TCF) of gas.

Priority

Hudi emphasized that increasing oil and gas lifting is not only to meet the needs of new refineries, but also to ensure national energy security. Currently, Indonesia's oil production is around 600 thousand barrels per day, while national consumption reaches around 1.5 million barrels per day. 

"So, our need to increase lifting must still exist," he said.

Previously, the Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, announced that the government is increasing the capacity of the oil refinery from 500 thousand barrels per day to 1 million barrels per day.

The construction of the refinery is part of the first phase of 21 downstream projects that will receive an investment of US$40 billion through funds to be provided by Danantara, and support the national downstream target of US$618 billion by 2025.