Jambi. Indonesia on Wednesday marked a milestone in formalizing community-run oil production as state energy company Pertamina completed its first-ever purchase of crude produced from community-managed oil wells, or sumur rakyat, in Jambi.

The inaugural transaction was officiated by Deputy Energy and Mineral Resources Minister Yuliot Tanjung, marking the on-the-ground implementation of Energy and Mineral Resources Ministry Regulation No. 14/2025, which aims to formalize the legality and governance of marginal oil wells.

“This is the first time oil from community-managed wells has been officially handed over to Pertamina,” Yuliot said after inspecting the site. “We hope this becomes a role model for governance and legal compliance for community wells across Indonesia.”

In the initial phase, 240 barrels of oil were delivered through a micro, small, and medium enterprise (MSME) manager, with potential output estimated at up to 1,000 barrels per day. The government expects the program to spur local economic activity by involving cooperatives, MSMEs, and regionally owned enterprises, while maintaining production standards.

Yuliot said around 45,000 community oil wells have been identified nationwide, spread across Aceh, North Sumatra, Jambi, South Sumatra, Central Java, and East Kalimantan.

“Starting with this pilot in Jambi, we will set clear standards for procedures, mechanisms, and profit-sharing payments from community wells, so the management framework is properly reformed,” he said.

Jambi Governor Al Haris welcomed the policy, noting the province’s sizable oil potential. Jambi has more than 13,000 “clear and clean” wells located in Sarolangun, Batang Hari, and Muaro Jambi regencies, he said.

“The rules are now clear, from refining processes to waste management, all of it has been regulated under the ministerial regulation,” Al Haris said. “We are avoiding environmental disruptions. Today, we saw firsthand the refining process of oil from community wells before it is transported and sold to Pertamina.”

Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia said President Prabowo Subianto had instructed that oil and gas resources should not be dominated solely by large corporations, but also involve local communities in line with Article 33 of the 1945 Constitution.

As a follow-up, the government plans to legalize the operation of some 45,000 community-managed wells. Bahlil said the policy goes beyond boosting oil output, aiming instead to strengthen the domestic economy.

“This strategy is about creating jobs, increasing economic circulation, and improving our oil lifting,” he said.

Indonesia’s oil lifting averaged 607,000 barrels of oil per day (BOPD) between January and October 2025, exceeding the 2025 state budget target of 605,000 BOPD, Bahlil noted. Still, domestic production remains insufficient, forcing the country to import between 900,000 and 1 million BOPD annually, resulting in an estimated foreign exchange loss of Rp 776 trillion each year.

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