Back toour markets

Indonesia's Energy Industry


in figures

Oil reserves2.4 billion barrels

Oil production692,000 bopd

Gas reserves1.3 tcm

Gas production59.3 bcm

Eastern potential

Indonesia made its first oil discovery in North Sumatra in 1883, leading to the establishment of Royal Dutch Shell in 1890. In the 1990s, oil production peaked,  surpassing 1.6 million bopd. Since then, production steadily declined until the country finally became a net importer of oil in 2004, and left OPEC in 2008. In December 2015, the country re-entered OPEC, where it has sought a special status as a mediator with exemption from production cuts.

In December 2018, Indonesia had 3.2 billion barrels of proven oil reserves, down from 4 billion barrels at the beginning of 2013. Even with an aggressive offshore exploration programme and EOR, oil production has continued to decline as recent discoveries have yet to reach full capacity. Set to become the world’s seventh-largest economy by 2030, Indonesia’s appetite for more energy will undoubtedly continue to increase in the next decades and the local hydrocarbons industry will likely be unable to meet the demand.

In January 2017, the Ministry of Energy and Mineral Resources issued a regulation effectively replacing Indonesia’s cost recovery mechanism with a gross production split scheme for the sharing of hydrocarbons output between the contractors and government under upstream PSCs.

A large portion of Indonesia’s produced gas is exported as the nation’s gas production is dominated by foreign companies. CNOOC, Total E&P Indonesia, ConocoPhillips, BP Tangguh and ExxonMobil Indonesia are some of the major foreign players in the country.

With diminishing oil reserves, increasing domestic energy demands and vast, untapped conventional and unconventional gas wealth totalling 2.8 tcm (100 tcf), Indonesia is gradually reorienting its hydrocarbons industry. Supported by the government, gas production increased by 25% between 2002 and 2012. These gains were lost by 2014, but by 2018  production had increased to 73.2 bcm (2.58 tcf). The country has significant shale gas potential, which is being studied.

Jakarta has moved to reform its oil and gas industry, but long-term investment has been complicated by nationalistic overtures and legal barriers to exploration. Investor concerns over new energy regulations have raised questions about the future of the industry.

Aramco and Pertamina shake hands on hydrogen
Saudi Arabia - November 15, 2022

Saudi Aramco and Indonesia’s NOC Pertamina have signed an MoU to developing hydrogen and ammonia assets, the Saudi NOC…

BP signs 30-year PSCs in Indonesia
Indonesia - June 22, 2022

BP has completed the signing of two 30-year PSCs with the government of Indonesia for the Agung I and Agung II exploration…

JGC signs EPC contract for gas project in Indonesia
Indonesia - June 21, 2022

JGC Holding Corporation has penned a contract with Singapore’s Jadestone Energy to provide EPC works for gas processing…

BW Offshore sells FPSO in Indonesia
Indonesia - June 06, 2022

BW Offshore has completed the sale of the BW Joko Tole FPSO to the vessel’s current operating consortium in Indonesia, the…


Indonesia maps

Indonesia’s Exploration and Production Licence Areas 2020

Energy, Ukraine and the Turkish question Mehmet Ogutcu
Multinational - May 06, 2022

Mehmet Öğütçü, CEO of Global Resources Partners and chairman of the London Energy Club, talks to The Energy Year about…

MTC secures Indonesian FPSO contract
Indonesia - April 13, 2022

MTC Engineering has secured a contract for the construction of an FPSO for use on Medco Energi’s Forel field development in…




  • Do you have a question for The Energy Year about oil and gas?
  • If we know, we’ll tell you.
  • If not, we’ll ask the experts in the field.