[REVISION HISTORY]

Indonesia oil and gas regulatory reform and exploration

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2026-10-29 07:24 UTC → 2026-10-29 16:29 UTC · added ~~removed~~

Indonesia is accelerating legislative reforms to its upstream oil and gas sector through the revision of the Oil and Gas Bill (RUU Migas). A central focus is the proposed formation of a Special Business Entity (BUK Migas), which could replace the functions of SKK Migas and report directly to the President. This entity is intended to provide a “single-window licensing system” to eliminate bureaucratic delays between ministries. The bill also proposes tax relief during the exploration phase, where taxes would only be due once production yields results. Legislative momentum has intensified following a September 14, 2026, presidential letter from President Prabowo Subianto. Parallel to these shifts, production and exploration activities continue. In East Kalimantan, Minister of Energy and Mineral Resources Bahlil Lahadalia inaugurated the Jangkrik North East #6 (JNE#6) gas reception and the Maha-South Hub production facilities. At the 2026 Upstream Oil and Gas Economic and Finance Forum (FOREK Hulu Migas), several major gas and LNG supply agreements were signed. MedcoEnergi and partners secured gas supplies from the Sakakemang, South Sumatera, and Senoro-Toili working areas to bolster domestic supply through 2037. Specifically, these include an 89 TBTU contract for the Sakakemang area for 2027–2037, an amendment increasing the South Sumatera contract to 16.5 TBTU, and a Senoro-Toili agreement totaling approximately 205.59 BSCF. Additionally, the Abadi Masela Project consortium signed LNG Sales Purchase Agreements with PGN and PT PLN Energi Primer Indonesia. Regarding energy policy, the government is transitioning oil and gas import procurement to the Lemigas state-owned service agency (BLU) via Presidential Regulation No. 107/2026. This framework shifts procurement from market-based corporate mechanisms to Government-to-Government (G-to-G) and Government-to-Business (G-to-B) schemes, with PT Pertamina (Persero) acting as the offtaker and physical supply chain manager. Minister Bahlil Lahadalia confirmed this scheme will not utilize the state budget (APBN). ~~To address import needs, the government is also exploring a potential import of 30 million barrels of crude oil from the United Arab Emirates.~~

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