Bahlil warns oil contractors to develop fields or return concessions

Indonesia consumes around 1.6 million barrels of oil per day (bpd), while domestic production stands at approximately 600,000 to 650,000 bpd.

Jakarta (ANTARA) - Indonesia's Energy and Mineral Resources Minister Bahlil Lahadalia has urged upstream oil and gas contractors to immediately develop fields covered by approved Plans of Development (PoD), warning that concessions could be returned to the state if projects remain stalled.

“If you are unable to do so, return the concession to the state. We will then offer it to those who are capable of carrying out the work,” Bahlil said at the opening of the 2026 Upstream Oil and Gas Forum (FOREK) in Jakarta on Wednesday (October 28).

The directive also applies to state-owned energy company Pertamina. Bahlil stressed that government backing should not be used to justify delays, adding that Pertamina should share management responsibilities if it cannot accelerate project implementation.

The government is seeking to speed up upstream development as Indonesia faces a substantial gap between domestic oil consumption and production.

Indonesia consumes around 1.6 million barrels of oil per day (bpd), while domestic production stands at approximately 600,000 to 650,000 bpd.

The B50 biodiesel program is estimated to offset 250,000 to 300,000 bpd of oil consumption, but Indonesia still imports around 700,000 to 750,000 bpd, according to the figures cited in the report.

Bahlil said increasing oil lifting remained a major challenge, compounded by aging wells and a decade-long decline in production. He urged contractors to adopt technological innovations to improve extraction, citing modernization efforts by Exxon in Cepu, East Java, as an example of how technology could help optimize production.

The urgency has also increased amid changing global conditions. Higher oil prices, rising demand, and geopolitical uncertainty have prompted countries to prioritize domestic energy reserves, raising concerns about potential regional supply tensions.

Bahlil framed the directive as a push for faster corporate action rather than a direct threat. He expressed confidence that accelerated project development could help Indonesia achieve the energy self-sufficiency targets set by President Prabowo Subianto for 2029–2030.

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Translator: Khaerul Izan, Yashinta Difa
Editor: M Razi Rahman
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