As the new year reveals the domestic focus for energy-rich nations, Indonesia has recently outlined a large-scale upstream drilling drive that aims to reverse years of oil and gas output decline in a nation that has become one of the major Asian energy hubs in recent years. Indonesia has focused its collective efforts on bringing the nation’s upstream market up to date with international output standards, and 2026 has revealed the government’s plans to spur investments in new drilling opportunities.
The Asian energy industry: An exemplar of the increased demand for new oil and gas projects
As the inevitable increase in demand for energy hits the international market, Asia specifically has become a key focus for the world, as new energy projects reflect the insatiable appetite for new oil and gas output in the Asian market.
As climate change becomes an all too real danger on the global stage, a pragmatic approach to considering the impact of new drilling operations has become a necessity. Indonesia is nothing if not a pragmatic nation, and has recently outlined the government’s plans to expand domestic drilling activities in the latest growing energy market in the world.
Can Indonesia reverse a decade of declining oil and gas output?
According to the latest reports from the government, that is exactly what is being planned in Indonesia. The government has expressed its intention to increase oil production to approximately 0.9-1 mb/d by 2028, reversing a decade of languishing oil and gas output for the Asian heavyweight. At the moment, Indonesia imports nearly 1 mb/d to meet domestic demand, which needs to change as the demand for domestic oil production increases.
What measures are being undertaken to spur domestic oil and gas production in Indonesia?
Indonesia is targeting a broader strategy to increase oil output that will significantly enhance energy security and drastically reduce imports for the nation. Additionally, the government is planning to auction off between 60 and 75 new working areas around the nation by 2028.
“There are still 60 working areas that we will tender in the next two to three years,” – Energy and Mines Minister Bahlil Lahadalia
This aggressive approach to spur domestic oil and gas production has been backed by the private sector, which aims to develop the Asian energy market to compete with the more influential energy-rich regions of the world, such as the United States and Europe.
A significant focus for the government has been the reactivation of idle wells in Indonesia. The government has detailed a plan to reactivate up to 5,000 idle wells around the country, which could potentially increase production by 200,000 bpd.
Several energy majors are contemplating a return to the Indonesian upstream market
The government’s ambitious plan has attracted some of the largest energy majors in the world. Chevron, Shell, and TotalEnergies have all expressed interest in returning to the nation to spur a new era of domestic upstream production in a nation that needs it desperately.
As new domestic oil production comes online in North America, Indonesia is aiming to reverse a decade-long decline in upstream oil and gas production. Production of essential energy resources peaked around 1.6 million b/d in 1995 and has since taken a significant dive. Can Indonesia reshape its fortunes and deliver a new year focused on domestic oil and gas production?
Indonesia’s President has urged that policy reform needs to be a top priority
At a recent event that saw the President of Indonesia inaugurating the Balikpapan oil refinery, he urged the nation’s policy and lawmakers to reform the nation’s policies regarding new oil and gas developments, a necessity in the modern-day energy industry. Whether or not Indonesia can effectively end a decade of languishing energy production is yet to be determined, but we would not bet against it.
