Indonesia and Malaysia are still in the early stages of discussions to potentially jointly develop the East Ambalat oil and gas block, a resource-rich offshore area located near their maritime border in the Sulawesi Sea.

“This is not final yet. I want to emphasize once again that this is still under review,” Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia said during the ‘Energi Mineral Festival’ Held by B-Universe in Jakarta on Wednesday, July 30, 2025.

Geologically part of the Tarakan Basin, East Ambalat lies in deep waters approximately 80 kilometers east of Tarakan City, North Kalimantan. The block spans 4,735 square kilometers with water depths reaching up to 2,000 meters and holds hydrocarbon potential expected to last up to three decades.

Despite its promise, the area remains a matter of unresolved maritime claims between Indonesia and Malaysia, limiting both countries from proceeding with full-scale development. However, Bahlil suggested that a cooperative arrangement could be the key to unlocking East Ambalat’s potential.

“One of the discussion points is how both countries can work together to manage the East Ambalat block for mutual benefit,” he said.

If the two countries reach an agreement, Bahlil confirmed that national oil companies Indonesia’s Pertamina and Malaysia’s Petronas would be tasked with executing the project.

“Of course, if it’s done at the state level, the collaboration will be between the state-owned oil companies: Pertamina for Indonesia and Petronas for Malaysia,” he said.

The East Ambalat block has long been regarded as one of Southeast Asia's most geopolitically sensitive and commercially valuable offshore areas.

A successful joint venture between Indonesia and Malaysia could mark a diplomatic milestone in regional energy cooperation and potentially set a precedent for resolving cross-border resource disputes in the region.

Previously, Foreign Minister Sugiono also acknowledged the ongoing discussions, saying that while the idea of joint management over East Ambalat has been floated, it has yet to be addressed in detail. It was not formally tabled during the 13th Annual Indonesia-Malaysia Consultation held in Jakarta on Tuesday, July 29, 2025.

“At this stage, both countries recognize the significant potential in the border region, including East Ambalat, and are continuing to explore how to cooperate,” Sugiono said.

He added that once the political groundwork is settled, technical aspects would be delegated to relevant ministries.

Meanwhile, PT Pertamina Hulu Energi, the upstream subsidiary of Pertamina, has expressed readiness to take on the East Ambalat project, pending formal government instruction.