PwC Indonesia’s 2026 Oil and Gas Guide highlights Indonesia’s energy landscape amid global transition

Jakarta, 20 May 2026 – PwC Indonesia has released the 15th edition of its Oil and Gas in Indonesia: Investment, taxation, and regulatory guide, outlining how Indonesia’s oil and gas sector continues to develop within a global energy landscape marked by energy transition, geopolitical uncertainty, and heightened regulatory expectations. The release of the guide coincided with PwC Indonesia’s participation in the Indonesian Petroleum Association Convex 2026, held on 20–22 May 2026, under the theme “50 Years of Energy Partnership: Shaping the Next Era for Advancing Growth.”

The guide highlights that while the global transition towards cleaner and more sustainable energy systems is progressing, oil and gas continue to play an important role in meeting energy demand, particularly across emerging markets in Asia. This transition is taking place amid economic uncertainty and geopolitical developments that influence supply dynamics and reinforce the importance of energy security.

In Indonesia, the upstream oil and gas sector faces a number of structural challenges, including natural production decline in mature fields, limited new reserve discoveries, and relatively subdued exploration activity. These factors have contributed to a more cautious investment outlook, alongside portfolio rationalisation by several international oil companies, driven by project economics, production sharing contract terms, regulatory processes, and the pace of investment realisation.

At the same time, Indonesia continues to hold significant resource potential, and increasing upstream oil and gas activity remains a national priority. Recent policy and regulatory developments reflect efforts to improve the investment environment, including ongoing refinements to both cost recovery and gross split production sharing contract mechanisms to better align risk allocation and project economics.

Downstream, Indonesia’s focus on energy security is reflected in ongoing efforts to expand biofuel mandates and increase domestic gas utilisation, aimed at reducing reliance on imports and supporting the development of a more resilient national energy system.

Regulatory consistency and permitting processes remain key considerations for investors. Challenges related to licensing and coordination across multiple government agencies continue to be raised by industry participants, particularly when securing long‑term capital for large‑scale and technically complex oil and gas developments.

From a broader industry perspective, oil remains the world’s largest energy source, while natural gas continues to play a growing role in supporting energy systems amid supply‑demand volatility. These dynamics further emphasise the importance of supply resilience and diversification, particularly as countries seek to balance energy security with energy transition objectives.

Sacha Winzenried, PwC Indonesia Energy, Utilities & Resources Advisor, said, “Over the longer term, Indonesia’s oil and gas demand outlook is expected to be increasingly shaped by the Government’s decarbonisation agenda. Policies promoting energy efficiency, electrification, fuel substitution, low‑carbon power generation, and carbon pricing are expected to reduce fossil fuel intensity across the economy. Oil and gas will however continue to play a key role in Indonesia’s energy security strategy, while energy transition objectives provide opportunities for oil and gas players to diversify their operations to support Indonesia’s evolving energy system.”