Executive Summary

Key insights and market outlook

The Indonesian government is set to increase oil production through new investment strategies, including more attractive fiscal terms and flexible contract options ¹

². The government is offering a split contract partnership (KKKS) of up to 50%, compared to the previous 15-30%, as well as flexibility in choosing between cost recovery or gross split ¹². Other incentives include production optimization, exemption from indirect taxes during the exploration period, and partnership schemes through Permen ESDM 14/2025 for operational and production technology cooperation ¹².

Full Analysis

02

Deep Dive Analysis

Indonesia's New Investment Strategies for Oil Production

Attractive Fiscal Terms and Flexible Contracts

The Indonesian government is introducing new investment strategies to boost oil production, including more attractive fiscal terms and flexible contract options ¹

². The government is offering a split contract partnership (KKKS) of up to 50%, compared to the previous 15-30%, as well as flexibility in choosing between cost recovery or gross split ¹². This move aims to attract more investors and increase oil production in the country.

Incentives for Investors

Other incentives include production optimization, exemption from indirect taxes during the exploration period, and partnership schemes through Permen ESDM 14/2025 for operational and production technology cooperation ¹

². The government is also actively facilitating the acceleration of permits and bureaucracy across institutions, as well as conducting direct exploration using APBN funding, including seismic surveys, to reduce exploration risks and encourage investment ¹².

Expected Impact

The new investment strategies are expected to have a positive impact on Indonesia's oil production, with the government aiming to increase production and attract more investors ¹

². The move is also seen as a way to reduce the country's dependence on imported oil and increase its energy security.

References