The upstream oil and gas regulatory task force (SKK Migas), together with production sharing contractors (KKKS), has launched a new initiative to boost national oil and gas output through broader local participation, following the issuance of Energy and Mineral Resources (ESDM) Ministerial Regulation No. 14/2025.

The new regulation opens opportunities for regional-owned enterprises (ROEs), cooperatives, and small and medium enterprises (SMEs) to manage community oil wells legally and professionally, under government supervision and in partnership with KKKS operators.

Speaking at a media briefing titled “Socialization of ESDM Regulation No. 14/2025 on Cooperation in Managing Working Areas for Oil and Gas Production Enhancement”, SKK Migas Deputy for Exploitation, Taufan Marhaendrajana, said the policy marks an important milestone in reforming the governance of Indonesia’s upstream sector.

“This regulation ensures that community-based oil production activities operate safely, efficiently, and sustainably. Every oil production effort must provide maximum benefits for the people while safeguarding the environment,” Taufan said in Jakarta on Wednesday, October 8, 2025.

According to him, the regulation serves as a strategic response to the widespread issue of unregulated or informal oil extraction, which often lacks adherence to Good Engineering Practices (GEP) and safety standards. The policy aims to formalize and professionalize community oil production while maintaining environmental protection.

Taufan noted that implementing the regulation would strengthen collaboration among the central government, local administrations, and industry players, including KKKS, to ensure that upstream activities contribute directly to regional economic growth and national energy security.

“Collaboration is the key to achieving higher national lifting targets while reinforcing Indonesia’s long-term energy resilience,” he added.

Benny Hidajat Sidik, Vice President for Production and Projects at oil and gas company Pertamina Hulu Energi (PHE), said KKKS operators play a crucial role in mentoring and supporting local entities in managing oil wells.

Under the new partnership framework, KKKS are responsible for ensuring compliance with industrial safety and operational standards, particularly in Health, Safety, Security, and Environment (HSSE) practices.

“KKKS are here to ensure full compliance with HSSE standards and to facilitate technology transfer so that community-based oil operations can be more efficient and competitive,” Benny said.

He added that the initiative goes beyond production targets, emphasizing community empowerment as a key component. The involvement of local entities such as ROEs, cooperatives, and SMEs is expected to generate new employment opportunities, stimulate local economies, and ensure that nearby communities benefit directly from regional oil and gas potential.

“We want to make sure that local communities are not just observers but active beneficiaries of the country’s natural resource potential,” he said.

The ESDM Ministry Regulation No. 14/2025 also provides room for private investors and technology providers to collaborate through operational or technological partnerships, bringing new flexibility and innovation to the upstream oil and gas sector.

To ensure proper implementation, SKK Migas will form a joint monitoring task force involving the central and regional governments, the Directorate General of Oil and Gas (Ditjen Migas), the Aceh Oil and Gas Management Agency (BPMA), and law enforcement agencies. The team will oversee technical compliance, conduct periodic evaluations, and enforce regulations where necessary.

SKK Migas expressed confidence that the new policy framework will help raise national oil and gas production without compromising transparency, safety, or environmental standards.

“We want to make sure every drop of oil produced in Indonesia provides the greatest possible benefit to the state and its people,” Taufan concluded.