Oil and gas in Indonesia: Investment, taxation and regulatory guide - 15th edition

Indonesia’s oil and gas sector continues to evolve amid the global energy transition, geopolitical uncertainty, and shifting regulatory expectations. While cleaner energy systems are gaining momentum, oil and gas remain critical to meeting energy demand across emerging Asian markets — including Indonesia, where supply security, fiscal competitiveness, and regulatory certainty remain key considerations for investors.

This guide provides insights into Indonesia’s upstream and downstream oil and gas landscape, with a focus on key investment considerations, fiscal and taxation frameworks, and recent regulatory developments shaping the sector.

Indonesia’s oil and gas investment landscape

Indonesia’s oil and gas sector continues to play a critical role in supporting national energy security and economic resilience, as Indonesia navigates the global energy transition alongside geopolitical uncertainty and evolving regulatory expectations.

While upstream investment continues to face structural challenges — including natural production decline and complex permitting processes — the Government has introduced policy and fiscal refinements aimed at improving competitiveness. These measures are intended to support large-scale gas developments and enable transition-aligned initiatives, including carbon capture and storage (CCS).

Collectively, these developments suggest that Indonesia’s oil and gas sector is not in structural decline, but rather undergoing a period of strategic transformation.

Indonesia’s oil and gas resources, reserves, and production

Resources

Indonesia’s upstream oil and gas landscape continued to demonstrate considerable geological potential in 2025, supported by a total of 128 identified oil and gas basins. As of June 2025, 20 basins had reached the discovery stage, while 68 remained unexplored. A further 19 basins showed hydrocarbon indications, and 13 had been drilled without commercial discoveries.

Reserves

In line with exploration activity, Indonesia recorded an increase in its proven oil and gas reserves in 2025. According to the Ministry of Energy and Mineral Resources (MoEMR), proven oil reserves rose from 2.29 billion barrels in 2024 to 2.33 billion barrels, while proven gas reserves increased from 33.8 Tcf to 34.8 Tcf over the same period.

Production

Following a series of discoveries between 2024 and 2025, Indonesia’s oil output increased in 2025, rising from 580 thousand barrels of oil per day (MBOPD) in 2024 to 605 MBOPD in 2025. In contrast, gas production declined marginally in 2025, decreasing to 6,789 MMSCFD from 6,802 MMSCFD in the previous year.

In 2025, Indonesia maintained its position as the world’s 13^th largest natural gas producer, unchanged from the previous year, with total production reaching 65 bcm (equivalent to 2.29 Tcf). On the demand side, Indonesia ranked 25^th globally, with domestic gas consumption amounting to 41 bcm (equivalent to 1.45 Tcf), as illustrated below: