South Sumatra is set to become the first region in Indonesia to sign an oil purchase contract from community-operated wells, said Deputy Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung.
"Perhaps South Sumatra will be first," Tanjung said on Friday, August 8, 2025.
The opportunity follows the issuance of Minister of Energy Regulation No. 14/2025 on Cooperation in Oil and Gas Working Areas (WK) Management to boost domestic production. The regulation is designed to accelerate national energy security by optimizing local oil and gas potential through partnerships between oil contractors and community-owned enterprises, such as regional-owned enterprises (ROEs), cooperatives, and Micro, Small andMedkium Enterprises (MSMEs).
"We have identified around 33,000 community-operated wells," Tanjung added.
In addition to South Sumatra, the provinces with the largest number of such wells include Jambi, North Sumatra, and Central Java. The ministry is currently reviewing reports from governors regarding the readiness of regional governments, ROEs, and cooperatives to manage these wells.
Earlier, ESDM Minister Bahlil Lahadalia announced that starting August 1, 2025, the output from community-operated wells can be purchased by oil companies operating in the same region.
"Pertamina will act as the offtaker, at around 70–80 percent of the Indonesia Crude Price (ICP)," Bahlil said on July 29, 2025.
Head of the Upstream Oil and Gas Regulatory Task Force (SKK Migas), Djoko Siswanto, expressed hope that production from these wells would begin boosting national oil lifting immediately this August.
Based on calculations from a well in Blora, each can yield 2–3 barrels of oil per day (bpd). If 30,000 wells are properly managed, production could reach 60,000–90,000 bpd.
"These figures are based on wells already integrated into the system. In other provinces, the potential could be even greater. I estimate total production could reach 100,000 bpd," Djoko said, emphasizing that SKK Migas’s current priority is realizing output from the 30,000 identified wells.
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