Indonesia to Offer 60 Oil and Gas Blocks with Competitive Incentives

August 20, 2025 | 12:26 pm

TEMPO.CO, Jakarta - Indonesian government aims to offer up to 60 oil and gas blocks to investors over the next two years, accompanied by a more competitive incentive scheme.

This initiative is part of efforts to strengthen national energy resilience through accelerated investment in the upstream oil and gas sector.

“The government is preparing around 60 oil and gas blocks to be offered in the next two years with a more competitive incentive scheme,” said Elen Setiadi, Deputy for Energy and Mineral Resources Coordination at the Coordinating Ministry for Economic Affairs, during the Tempo Oil and Gas Forum at Hotel Raffles, South Jakarta, on Wednesday, August 20, 2025.

Elen noted that since 2021, the government has introduced various breakthroughs, including improvements to the working area auction mechanism and refinements to the production sharing contract scheme.

As a result, more new working areas are now managed by contractors under work cooperation contracts.

“Exploration in oil and gas blocks is beginning to show positive developments,” she said.

In addition to opening new working areas, the government is pushing for optimization of existing fields, including the reactivation of idle wells and the use of older wells. Elen added that the government is preparing a scheme to involve local communities in managing community wells.

Various upstream oil and gas incentives have also been introduced to attract more investors. Gas production is seen as relatively stable, with promising prospects. In the past two years, several new gas reserves have been discovered, including in Short Andaman, Andaman 2, and North Channel.

“Gas will be a game changer in the national energy transition. Domestic gas utilization has reached 60 percent and continues to grow. This helps reduce imports of LPG and other fuels,” said Elen.

During the event, Elen also outlined strategies to increase national oil output through production optimization using new technology, reactivating fields and idle wells, and strategic partnerships between Pertamina and international partners.

This year, 15 non-PSN upstream projects are scheduled to start operations. “Their production capacity is more than 73,000 barrels of oil per day (BOPD) and 896 million standard cubic feet per day (MMSCFD) of gas,” she added.

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