Executive Summary

Key insights and market outlook

The Indonesian government is optimistic about achieving its 2025 oil production target of 605,000 barrels per day. Vice Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung stated that the target is likely to be met, with final data being consolidated by SKK Migas ¹

³. The ministry is working with Kontraktor Kontrak Kerja Sama (KKKS) to adjust production levels based on company work plans and budgets. Meanwhile, the government is also adjusting nickel production cuts for 2026 based on industrial needs, which may lead to increased nickel ore imports to meet smelter demands ⁴.

Full Analysis

02

Deep Dive Analysis

Indonesian Government Optimistic About 2025 Oil Production Targets

Oil Production to Reach 605,000 Barrels Per Day

The Indonesian government remains optimistic about achieving its 2025 oil production target of 605,000 barrels per day ¹

³. Vice Minister of Energy and Mineral Resources (ESDM) Yuliot Tanjung confirmed that the final data is being consolidated by SKK Migas, expressing confidence that the target will be met ¹. Kontraktor Kontrak Kerja Sama (KKKS) are adjusting their production levels according to their Rencana Kerja dan Anggaran Perusahaan (RKAP) or company work plans and budgets ¹³.

Nickel Production Adjustments for 2026

In related news, the government is planning to adjust nickel production in 2026 based on industrial needs. Yuliot Tanjung stated that production cuts will be aligned with domestic industrial requirements, as all minerals must be processed domestically ²

. The decision comes as Indonesia faces potential overproduction of nickel, which has led to declining prices ².

Potential Increase in Nickel Ore Imports

The planned reduction in nickel ore production in 2026 is expected to lead to a significant increase in imports to meet smelter demands. According to the Indonesian Nickel Industry Forum (FINI), Indonesia's installed nickel smelter capacity reached around 2.8 million tons in 2025, with an expected production level of about 2.5 million tons dry metric tons (dmt) ⁴

. The increased demand is driven by both High Pressure Acid Leaching (HPAL) and Rotary Kiln Electric Furnace (RKEF) smelter technologies ⁴.

References