Exploration Needed to Achieve Indonesia's 1 Million Barrels of Oil per Day Target

This 1 million bpd target is managed by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), which is a government regulatory body that was established to manage and supervise the country's upstream oil and gas sector. This target implies reversing the country's long-term trend of declining oil production, and reduce its reliance on expensive oil imports.

Rikky Rahmat Firdaus, Deputy of Exploration, Development and Working Area Management at SKK Migas, said that Indonesia must drill between 50 and 60 new exploration wells, per year, to achieve this 1 million bpd production target, and ensure energy security. He added that opportunities to drill new exploration wells are ample, as currently only 20 of Indonesia's 128 hydrocarbon basins are in production (and 27 are categorized as "discoveries"). SKK Migas continues to push cooperation contract contractors [KKKS] to remain aggressive in terms of exploration activities, while respecting principles of cost-efficiency and low carbon emissions. The Indonesian government is also committed to improve the investment climate for the upstream oil and gas industry.

Asnidar, Head of the Oil and Gas Prospectivity and Working Area Data Management Division at SKK Migas, detailed that of the 128 hydrocarbon basins in Indonesia, 65 basins have not yet been explored. And these figures have not changed over the past decade, indicating weak demand for oil exploration across Indonesia.

Crude Oil Production in Indonesia

While Indonesia's crude oil production has shown a structural decline since the mid-1990s, it is interesting that recent data from Indonesia's Energy and Mineral Resources Ministry shows that national oil production averaged 602,400 bpd in the first half of 2025. This is only modestly lower than the 605,000 bpd target that was set in the 2025 State Budget. In fact, if we take a look at June 2025 alone, then oil production reached 608,100 bpd, which is above the target.

While this is a positive development, it remains very tough to achieve the 1 million bpd target in the next five years. What are the strategies of SKK Migas to achieve this goal?

• Massive exploration in order to discover new, large-scale oil and gas reserves. The Indonesian government is actively promoting new blocks and offering more attractive terms to international and domestic investors;
  
  
• By using enhanced oil recovery technologies, oil production at existing (often ageing) fields can be raised. This involves injecting chemicals, gas, or water into reservoirs to extract oil that would otherwise be left behind;
  
  
• Fiscal and regulatory incentives, including better splits for contractors in the gross split scheme and tax breaks (for example, by allowing investors to claim a certain percentage of their investment costs as a credit, which can be used to reduce their tax obligations).

Key matters that have undermined oil exploration in Indonesia are ageing oil fields, lack of giant oil discoveries, and the tough investment environment.

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