The upstream oil and gas sector continues to wrestle with multiple hurdles, ranging from operational bottlenecks to social friction with Indigenous communities. 

Against this backdrop, PT Pertamina Hulu Energi (PHE) says it is strengthening long-term community development programs as part of its strategy to ensure smoother exploration activities across its working areas.

Senior Manager for External Communication & Stakeholder Relations at PHE, Fitri Erika, said that engagement with local stakeholders has become a non-negotiable measure from the earliest stages of land acquisition up to the commencement of drilling.

“When we enter a new area, the first thing we do is approach local stakeholders and Indigenous groups,” Fitri said during a press conference at the Journalist Competency Test (UKW) hosted by Media Indonesia’s certification institution on Wednesday, November 19, 2025.

Indigenous engagement

Recounting experiences from Papua and Sukowati, Fitri said respectful engagement is critical to bridging cultural gaps. “Before we begin exploration, we meet with the local clans. It’s a form of honoring local communities,” she said.

During the well spudding phase, PHE often participates in traditional ceremonies, including prayer rituals and customary celebrations. “It’s something we must do when entering their territory,” she said.

Fitri also recalled moments of misunderstanding on the ground. In Papua, the sight of workers in protective coveralls triggered panic among residents. “They were afraid the forest would be cleared. In reality, we were there to run CSR programs,” she said. PHE then intensified dialogue with community leaders, universities, NGOs and other local institutions to ease concerns.

The company faced similar sensitivities when supporting tourism initiatives in Papua. Building new facilities, for instance, could not involve cutting local forest trees an important cultural and ecological boundary for Indigenous communities.

PHE operates five domestic and international regional working areas, including Indonesia’s eastern region Sukowati, Poleng, Donggi Matindok, and Papua, managed through Pertamina EP Cepu.

Fitri emphasized that land use remains one of the most critical issues for contractors, requiring strict adherence to regulations issued by the Upstream Oil and gas Regulatory Task Force (SKK Migas).

“When we clear forested land, we must convert or compensate it with replacement areas. It’s an operational obligation, not part of community empowerment,” she noted.

Despite ongoing challenges, Fitri appreciated SKK Migas’support, particularly regarding permits. “We’re optimistic. If one permit stalls, we can escalate the issue through SKK,” she said.

Beyond CSR

Head of Public Relations and Formality at SKK Migas for Northern Sumatra, Yanin Kholison, stressed that community development (PPM) represents only a fraction of the sector’s contribution.

“Unlike typical corporate CSR, which companies design and execute independently, the biggest contributions of upstream oil and gas come from revenue-sharing funds (DBH) and land and building taxes (PBB migas),” Yanin said.

“PPM is a complementary function to ensure field operations are accepted by local communities,” he added.

Realization

As of late November 2025, PPM implementation in Northern Sumatra had reached 95 percent, amounting to Rp100 billion across dozens of districts in productive operational areas.

“We manage 34 working areas, mostly those already producing. The majority of PPM activities are carried out in these regions,” Yanin told reporters.

PPM programs span four pillars ‒ education, health, economic empowerment, infrastructure and institutional governance ‒with priority often placed on education, economic livelihoodand basic infrastructure, particularly in remote regions.

One such region is the Riau Islands, home to two outermost districts bordering neighboring countries. Here, three contractors collaborate with local governments, community groups, NGOs and social organizations to deliver PPM programs.

Remote areas, however, present logistical challenges. “Limited infrastructure means many supplies must be shipped from outside,” Yanin said. Annual PPM realization in the region typically reaches US$5–6 million.

PPM initiatives include school improvement projects, economic assistance, conservation activities and environmental protection. In Rokan, for example, PHE supports an elephant conservation program designed to reduce conflicts between wildlife and communities using GPS-based monitoring systems.

Budget absorption is typically lower in early months but accelerates from the second quarter, often reaching around 90 percent by year-end.

PPM obligations run throughout the exploration period typically six to ten years and continue into production phases, aligned with environmental impact assessments (AMDAL).

Scholarships also form a key component. Some working areas offer full scholarships, including international placements such as at the Petroleum University in the United States. Others partner with Pertamina University and the Cepu Oil and Gas Academy. While many scholarships target future industry talent, non-technical students are also eligible.

Internships are common, though recruitment follows competitive national procedures. “This is a professional industry. Every Indonesian has an equal opportunity,” Yanin said.