Jakarta. Energy and Mineral Resources Minister Bahlil Lahadalia announced on Monday that state energy company Pertamina is prepared to purchase crude oil produced from traditional or community-managed marginal wells across the country.

Bahlil said the initiative aims to provide economic certainty for local communities while improving governance and safety standards in small-scale oil extraction.

Each of these traditional wells produces an average of around three barrels of oil per day, based on data collected during Bahlil’s recent visit to Musi Banyuasin, South Sumatra.

Under the new framework, community-managed wells will operate under the supervision of licensed oil contractors in their respective regions. The government also plans to encourage other oil companies to buy production from local wells to strengthen rural economies.

“We’ve prepared a purchasing scheme where Pertamina will buy oil from community wells at 80 percent of the Indonesia Crude Price (ICP),” Bahlil said. “This will give communities a fair and legal way to benefit from local resources.”

The government has so far legalized about 45,000 traditional oil wells, many of which have operated informally since Indonesia’s independence.

“There are around 45,000 traditional wells that have existed since this nation’s early years without clear operating permits. We’ve now granted those licenses,” Bahlil said.

He added that the legalization program is part of a broader national effort to formalize and regulate traditional oil operations, ensuring that extraction is safe, sustainable, and equitable.

“This is a directive from President Prabowo to ensure social justice and fair distribution of our natural resources,” he said.

The initiative represents a significant shift in Indonesia’s approach to managing small-scale energy production, aligning economic inclusion with environmental and legal oversight.

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