The upstream oil and gas posted a significant investment rebound in the first half of 2025, with realized investments reaching US$7.19 billion, up 28.6 percent year-on-year from US$5.59 billion in the same period of2024, according to the Upstream Oil and Gas Regulatory Task Force (SKK Migas).
The increase reflects growing investor confidence amid improved fiscal terms and a more favorable investment climate, in line with the national energy agenda set forth in President Prabowo Subianto’s ASTA CITA development vision, which places upstream oil and gas development as a strategic pillar of Indonesia’s energy security.
“We are seeing no more talk of uneconomic oil and gas blocks. The government has taken significant steps to ensure fields become economically viable,” Head of SKK Migas, Djoko Siswanto, said during a mid-year performance briefing in Jakarta on Monday, July 21, 2025.
He cited fiscal incentives such as the new gross split production sharing contract (PSC) scheme, the removal of VAT on LNG, and accelerated gas infrastructure development as key drivers of the investment surge.
Looking ahead, SKK Migas forecasts that total upstream investment by the end of 2025 could reach US$16.5–16.9 billion, surpassing last year’s US$14.4 billion and marking the highest investment level in a decade above the previous peak of US$15.3 billion in 2015.
This trend also reflects a broader recovery following the pandemic downturn, when investment dropped to US$10.5 billion in 2020.
Boost in exploration, drilling activity
The increase in capital spending has translated into higher operational activity across the upstream sector including 409 development wells drilled as of June 2025 (up 14 percent from 358 in 2024), 517 workover wells completed (up 6 percent) and 20,644 well service operations conducted (up 12 percent).
In addition, exploration investment has climbed steadily, reaching a projected US$1.5 billion this year − triple the level seen in 2020 and the highest exploration spending in 10 years.
Investor rankings
According to S&P Global, Indonesia’s attractiveness to oil and gas investors has improved notably, with its score rising to 5.35 in 2025, up from below 4.75 in 2021. The rise is attributed to successful major discoveries, regulatory reforms, and increasing policy stability.
Between 2023 and 2025, SKK Migas facilitated 40 joint study initiatives, including ongoing assessments for 16 new oil and gas blocks, primarily in eastern Indonesia.
These studies have attracted numerous international oil companies (IOCs), namely ENI, Petronas, Inpex, Sinopec, CNOOC, BP, TotalEnergies, PetroChina, Kufpec, and Woodside Energy.
“The resurgence of global interest is a strong indicator that Indonesia is regaining its position as a competitive upstream investment destination,” Djoko said.
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