Indonesia Bolsters Oil & Gas production, Navigates Licensing Updates Amid Renewable Energy Shift
Jakarta, Indonesia – Indonesia is actively pursuing strategies to enhance oil and gas production while simultaneously updating its regulatory framework, as outlined in recent government actions. These moves come as the nation balances its energy needs with a broader global transition towards renewable sources. New regulations aim to attract investment and streamline operations within the oil and gas sector, even as discussions continue regarding a potential overhaul of the foundational Oil and Gas Law.
The Indonesian government recognizes the continued importance of oil and gas while acknowledging the long-term shift towards renewables. Recent legal developments focus on maximizing output from existing resources and creating a more efficient operating environment for contractors. This approach seeks to ensure energy security during the transition and generate revenue to support future investments in sustainable energy sources.
Co-operative Production Enhancement Framework
In June 2025, the Ministry of Energy and Mineral Resources (MEMR) issued MEMR Regulation No. 14 of 2025 concerning Cooperation in the Management of Parts of oil and Gas working Areas to Enhance Production (“MEMR Reg 14/2025”). This regulation facilitates partnerships between Production Sharing Contract (PSC) contractors to boost oil and gas output. Permitted collaborations include operational and/or technological co-operation, well production co-operation with State-Owned Enterprises (BUMDs), co-operatives, or micro, small, and medium-sized enterprises (“MSMEs”), co-operation on crude-oil mining at old wells, and other forms of co-operation approved by SKK Migas/BPMA.
Updated Risk-based Licensing Regime
The government recently enacted Government Regulation (GR) 28/2025,reforming the risk-based licensing framework and revoking GR 5/2021. Key changes include a requirement for the Online Single Submission (OSS) agency to update its platform by October 5, 2025, with existing users needing to migrate their accounts – though the implementation timeline remains uncertain. The new regulation also introduces a streamlined process for business approvals and revises risk classifications, though risk levels for oil and gas activities remain largely unchanged.
Existing permits issued under GR 5/2021 remain valid unless conflicting with the new regulation, and applications in progress will continue to be processed under GR 5/2021 until the OSS system fully aligns with GR 28/2025. Crucially,implementing regulations specific to the oil and gas sector,required by GR 28/2025,are expected by October 2025. Until then, the existing risk-based licensing framework under GR 5/2021 remains in effect.
Ongoing Legislative Discussions
Discussions regarding a potential amendment to the Oil and Gas Law have been ongoing for several years. While repeatedly debated in the house of Representatives, no formal changes have been enacted to date. This amendment is anticipated to comprehensively overhaul the regulatory framework for the sector.
Originally published by Chambers and Partners
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