Indonesia’s Oil and Gas Industry: Growth, Players, & Trends

Understanding Investment Opportunities in Indonesia’s Oil and Gas Sector

  • InCorp Editorial Team
  • 30 April 2025
  • 6 minutes reading time

Indonesia’s oil and gas industry is not just a crucial sector driving the country’s economic growth, but also a promising field for potential investors. As one of Southeast Asia’s largest economies, Indonesia’s vast natural resources serve as a beacon for both local and foreign investors, promising significant growth in the years to come.  

With increasing global demand and domestic energy needs, this industry remains a vital investment opportunity, supported by the government’s unwavering commitment to foreign investment. This support provides a stable and conducive environment for investors, ensuring confidence in the market’s future. 

Investment Opportunities in Indonesia’s Oil and Gas Sector 

Indonesia’s oil and gas sector is supported by abundant natural resources and an evolving regulatory framework that encourages foreign investment. The country has extensive onshore and offshore fields, providing numerous opportunities for exploration, production, and refining. 

Upstream Oil and Gas Exploration 

Indonesia’s upstream sector remains a significant attraction, with the government offering new oil and gas blocks under more favorable terms. Foreign companies can participate in joint ventures with state-owned enterprises or bid for production-sharing contracts. 

Downstream Expansion: Refining and Petrochemicals 

Indonesia aims to expand its oil-refining capacity to reduce its import dependency. Investments in new refineries and the modernization of existing ones present significant opportunities for engineering, procurement, and construction companies. 

LNG and Gas Infrastructure 

The demand for liquefied natural gas (LNG) is rising, driven by Indonesia’s commitment to clean energy. This has led to investment opportunities in LNG storage, regasification terminals, and gas pipeline networks. 

Oilfield Services and Equipment 

Companies specializing in drilling services, seismic surveys, and enhanced oil recovery (EOR) technologies can benefit from Indonesia’s growing demand for oilfield services. The government is also encouraging local content in procurement, opening doors for domestic service providers. 

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Indonesia’s Oil and Gas Industry: Market Outlook 

Indonesia’s oil and gas industry is expected to remain a vital component of the country’s energy sector in 2025, despite global shifts toward renewable energy. Global oil demand is projected to stay strong, with fossil fuels continuing to dominate the energy mix. Indonesia’s focus remains on increasing production while reducing reliance on imports. 

Key Market Insights for 2025 and Beyond 

  • Oil Production Goals: The government aims to achieve a production target of 1 million barrels of oil per day (BOPD) by 2030, thereby strengthening energy security. 
  • Gas Demand Growth: Indonesia’s gas demand is projected to increase by 5% annually, driven by the needs of the industrial and power sectors. 
  • Foreign Investment Opportunities: Indonesia welcomes international investors through improved production-sharing contracts (PSCs) and tax incentives. 
  • Refinery Expansion: Several major refinery projects are underway to enhance domestic fuel production and reduce import dependence. 
  • LNG Market Growth: The development of liquefied natural gas (LNG) continues to expand, positioning Indonesia as a key supplier in the Asia-Pacific region. 

Despite these opportunities, challenges remain, including fluctuating global oil prices and regulatory hurdles. However, with government-backed initiatives and increased investment, this industry is well-positioned for sustained growth in 2025 and beyond. 

Top 10 Leading Oil and Gas Companies in Indonesia 

Key players, including state-owned and private companies, drive Indonesia’s oil and gas industry through exploration, production, refining, and distribution. These companies play a significant role in the industry, contributing to the country’s energy security and economic growth. Here are the top 10 companies in Indonesia: 

  • Pertamina: Indonesia’s largest oil and gas company and state-owned enterprise. 
  • Chevron Pacific Indonesia: The second-largest oil and gas company, a subsidiary of Chevron Corporation. 
  • ExxonMobil Indonesia: A subsidiary of ExxonMobil Corporation, it operates several significant upstream projects. 
  • ConocoPhillips Indonesia: This country’s fourth-largest company focuses on expanding its natural gas and oil fields. 
  • CNOOC SES Indonesia: The China National Offshore Oil Corporation (CNOOC) subsidiary specializes in offshore exploration and production. 
  • Medco Energi: Indonesia’s largest private oil and gas company is expanding domestically and internationally. 
  • AKR Corporindo: Integrated energy company engaged in trading, storing, and distributing oil and gas, a key player in fuel distribution and logistics. 
  • Petronas Carigali Indonesia: A subsidiary of Petronas Malaysia, this company specializes in offshore exploration operations. 
  • Eni Indonesia is a subsidiary of the Italian oil and gas company Eni, which focuses on investing in deepwater exploration projects. 
  • BP Indonesia: A subsidiary of BP (British Petroleum) that produces and supplies natural gas (LNG). 

Guide to Investing in Indonesia’s Oil and Gas Industry 

Indonesia’s Oil and Gas Industry: Growth, Players, & Trends

Starting an oil and gas company in Indonesia requires navigating complex regulations and securing necessary approvals. Here is a detailed guide to the key steps involved in the process, from conducting market research to collaborating with state-owned enterprises (SOEs). 

  • Conduct Market Research: Assess investment opportunities, risks, and regulatory requirements before entering the market. 
  • Register A Legal Entity: Foreign investors must establish a company through Indonesia’s Investment Coordinating Board (BKPM). 
  • Obtain Required Permits: Secure business licenses, environmental permits, and land-use approvals to operate legally. 
  • Meet Local Content Requirements: Partner with local companies or use locally sourced equipment to comply with regulations. 
  • Collaborate with State-Owned Enterprises (SOEs): Large projects often require partnerships with entities such as PT Pertamina. 

Why Indonesia is A Prime Destination for Oil and Gas Investment 

Indonesia has been a key player in this industry for over 130 years, attracting investors with its rich reserves, flexible policies, and growing market. 

Strong History 

Indonesia’s first significant oil discovery was made in North Sumatra in 1885, followed by the discovery of the Talang Akar Field in 1912. The country joined OPEC in 1961, suspended membership in 2009, rejoined in 2016, and withdrew again in the same year due to declining production. 

Investor-Friendly Policies 

The MoEMR Regulation No. 12/2020 introduced cost-recovery and Gross Split (GS) PSC options, giving investors more flexibility. By 2021, 17 contractors will have operated under the GS model, boosting investor confidence. 

Restarted Oil and Gas Auctions 

Indonesia resumed oil and gas block auctions in 2021, following a pandemic-related pause. Key tendered areas included South Coastal Plain and Pekanbaru (CPP), Sumbagsel, Rangkas, Liman, Merangin III, and North Kangean. 

Major Oil Block Transfers 

In August 2021, the Rokan PSC, previously managed by Chevron Pacific Indonesia, was transferred to Pertamina Hulu Rokan (PHR), strengthening local energy control. 

Law No. 6/2023 simplified investment procedures, land acquisition, and business operations, making it easier for foreign and local investors to enter the market. Indonesia remains an attractive destination for investments, boasting strong policies, vast reserves, and government support. 

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How InCorp Can Help You Succeed in Indonesia’s Oil and Gas Market 

Setting up an oil and gas company in Indonesia involves registering the company, obtaining the necessary licenses, and ensuring compliance with local regulations. InCorp Indonesia (an Ascentium Company) offers expert services to streamline your business setup: 

  • Company Registration: Ensure a hassle-free incorporation process with the help of local experts.  
  • Investor KITAS: Secure the correct visa to manage your investment legally in Indonesia.  

Start your oil and gas business in Indonesia by completing the form below. 

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

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Frequent Asked Questions

As an investor, you are required to have a minimum investment of IDR 1 billion in invested shares to be eligible for an investor KITAS.

An Index 313 Investor KITAS will allow its holder to stay in Indonesia for a year, while an Index 314 Investor KITAS allows for a 2 year stay.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.