Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, has clarified that the Red-and-White Cooperatives (KDMP), village-based cooperatives known for selling daily necessities, do not qualify to manage community oil wells under the government’s new energy regulation.

The management of idle or community-owned oil wells will be governed by Ministerial Regulation No. 14/2025, which outlines the terms for cooperation between oil and gas companies and community-based business entities, such as regional-owned enterprises (ROEs), cooperatives, and small and medium enterprises (SMEs).

“This is not for fake cooperatives, nor for those that sell crackers or daily goods,” Bahlil told a press conference at his office on Tuesday, July 29, 2025. He emphasized that KDMP is excluded due to the nature of its business.

This statement serves to dispel circulating reports that claimed KDMP was eligible to manage oil wells.

The newly issued regulation aims to strengthen national energy security by optimizing underutilized oil and gas resources. It allows cooperation in the form of operational partnerships or technological collaborations to manage idle, underperforming, or untapped oil fields.

According to the policy, not every cooperative, SME, or SOE automatically qualifies to manage these wells. Only those with sufficient capital − between Rp5 billion (US$305,000) and Rp10 billion (US$610,000) − will be granted access to participate.

“For SMEs, the required capital is about Rp5 billion, and for medium-sized businesses, around Rp 10 billion. It can be a combination of multiple SMEs pooling their capital,” Yuliot Tanjung, Deputy ESDM Minister, said on July 1, 2025.

The government hopes this collaborative model will revitalize idle wells and increase domestic oil production, while ensuring that only credible and adequately capitalized entities are involved.