October 10, 2025 | 06:25 pm
TEMPO.CO, Jakarta - Indonesia's Ministry of Energy and Mineral Resources (ESDM) plans to legalize around 45,000 community-managed traditional oil wells across Indonesia.
The move aims to ensure fair and transparent management of natural resources while boosting the economic welfare of local communities.
Minister of Energy and Mineral Resources Bahlil Lahadalia said the policy is outlined in Ministerial Regulation No. 14 of 2025 on Cooperation in the Management of Work Area Parts to Increase Oil and Gas Production.
The regulation provides a legal framework for cooperatives, micro, small, and medium enterprises (MSMEs), and Regional-Owned Enterprises (BUMD) to officially manage traditional oil wells in their respective areas.
“Many community wells have long operated without legal status and often become targets of exploitation by certain groups. Through this regulation, we can finally organize and legalize them,” Bahlil said in an official statement on Friday, October 10, 2025.
According to ESDM data, approximately 45,000 community oil wells are spread across six provinces — Aceh, North Sumatra, Jambi, South Sumatra, Central Java, and East Java.
Bahlil emphasized that the initiative is not only about regulating oil and gas operations but also about empowering local residents to play a central role in managing their own resources.
“MSMEs, cooperatives, and BUMDs involved must come from local communities and be recommended by regional leaders. We don’t want outsiders taking advantage. Our goal is for local people to become masters in their own land,” Bahlil said.
The minister added that the policy prioritizes work safety, environmental protection, and local job creation. By granting legal status to these wells, the government hopes to make community oil operations safer, more productive, and more profitable.
Support from Other Ministries and Pertamina
Minister of Cooperatives and MSMEs Maman Abdurrahman welcomed the policy, saying his ministry would provide training and guidance to ensure that local business players truly benefit from the program.
“We will maximize the participation of MSMEs and cooperatives. Our appreciation goes to the Ministry of ESDM for supporting small and medium enterprises at the regional level,” Maman said.
Meanwhile, PT Pertamina (Persero) President Director Simon Aloysius Mantiri expressed full support for the initiative. Pertamina, he said, is ready to purchase oil produced from community wells at 80 percent of the Indonesian Crude Price (ICP) and ensure prompt payment to local operators.
To join the program, BUMDs, cooperatives, or MSMEs must meet several administrative and technical requirements, including a recommendation letter from the governor and a production cooperation plan.
“Once all documents are verified and approved, the contractor may submit a production cooperation proposal to the Minister of ESDM through SKK Migas or the Aceh Oil and Gas Management Agency (BPMA),” Simon explained.
The government hopes the legalization of traditional oil wells will mark a new era of inclusive energy governance, where local communities directly share in the benefits of Indonesia’s natural wealth.
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