Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia visited community-operated oil wells in Mekar Sari village, Keluang district, Musi Banyuasin, South Sumatra, on Thursday, October 16, 2025, as part of the government’s effort to formalize and regulate small-scale oil production.
The initiative aims to ensure community wells operate safely, sustainably, and in compliance with environmental standards. It aligns with Ministerial Regulation (Permen) ESDM No. 14/2025, which seeks to integrate community-based oil production into the national energy framework and boost Indonesia’s overall oil output.
During the visit, Bahlil announced a new pricing policy under which the government will purchase oil from community wells at 80 percent of the Indonesian Crude Price (ICP). The scheme is designed to provide economic certainty for local operators while encouraging them to work within a legal and monitored framework.
“The government wants community oil production to continue, but it must be regulated and compliant. With a purchase price of 80 percent of ICP, people can still earn a decent profit while the state ensures proper oversight,” Bahlil said.
Bahlil also held a dialogue session with local miners, who expressed relief and optimism about the government’s new approach.
“We used to operate in fear, but now we’re calm because the government is involved and provides clear solutions. We’re ready to follow the rules,” Anita, one of the community miners, said.
The minister stressed that formalizing community oil wells is not only about economic value but also about improving workplace safety and environmental protection.
He urged local governments, region-owned enterprises (ROEs), and the Upstream Oil and Gas Regulatory Task Force (SKK Migas) to enhance technical and administrative support for small operators.
“If all stakeholders work together, the people will prosper, and the country will benefit. This is the government’s commitment to empowering local communities,” he emphasized.
Bahlil was accompanied on the visit by SKK Migas Head Djoko Siswanto, Pertamina CEO Simon Aloysius, South Sumatra Governor Herman Deru, and Musi Banyuasin Regent M. Toha Tohet.
According to the South Sumatra Energy and Mineral Resources Office, the province has identified 21,400 oil wells across six regencies. Many of these wells are informally managed, resulting in significant potential losses to the state.
“The wells are spread across six regencies, with some officially managed and others still operated by local communities,” Haitami Hakim Pulungan, Head of the Oil and Gas Division at the South Sumatra ESDM Office, said.
Officials said the new policy is expected to transform the region’s vast small-scale oil potential often described as “the hidden wealth of Sriwijaya” into a legitimate, productive, and state-recognized energy source.