Jakarta. Indonesia aims to increase crude oil production from community-operated oil wells to at least 2,000 barrels per day (bpd) by July to boost domestic energy output, reduce dependence on imports, and expand local participation in the oil industry.

Djoko Siswanto, head of upstream oil and gas regulator SKK Migas, said production from so-called "people's oil wells" or sumur rakyat has already reached around 1,500 bpd and is expected to rise further in the coming weeks.

"By July, production must increase to 2,000 barrels per day at a minimum," Djoko told reporters after a parliamentary hearing on Wednesday.

Nine entities, including cooperatives, regional government-owned enterprises and small businesses, are currently operating the wells under a government-backed scheme designed to formalize and expand community participation in the oil sector.

The initiative stems from Energy and Mineral Resources Ministerial Regulation No. 14/2025, which allows regional state-owned enterprises, cooperatives and micro, small and medium-sized enterprises (MSMEs) to legally manage community oil wells and sell their output to state energy company Pertamina or oil and gas contractors. Under the regulation, crude produced from the wells can be sold at 80% of the Indonesian Crude Price (ICP), creating a formal market for production that has historically operated outside the mainstream industry.  In December, statet oil and gas company Pertamina completed its first-ever purchase of crude oil produced from community-managed wells in Jambi. 

Djoko said the long-term production potential from community-managed wells could reach 20,000 bpd.

Energy Minister Bahlil Lahadalia said President Prabowo Subianto wants local communities to play a bigger role in the oil and gas sector, rather than leaving it dominated by large corporations. As part of that effort, the government plans to legalize about 45,000 community-managed oil wells nationwide. Bahlil said the policy is aimed at boosting oil production while supporting local economies and creating jobs. The government sees the optimization of community wells as one of several measures needed to help achieve the oil production target of 610,000 bpd set in the 2026 state budget.

As of May 31, combined production of crude oil, condensate and natural gas liquids (NGLs) stood at 576,200 barrels of oil equivalent per day. The total comprised 491,300 bpd of crude oil, 55,800 bpd of condensate and 29,100 bpd of NGLs.

Indonesia has long faced a shortfall in oil production, with domestic demand exceeding 1.6 million barrels per day, far above current output. The gap has made the country increasingly dependent on imports of crude oil and refined fuels. Last year, Indonesia's oil lifting averaged 605,300 bpd, while gas lifting reached 951,800 barrels of oil equivalent per day. The government hopes higher output from community-managed wells, along with new exploration and enhanced recovery projects, will help boost domestic production and strengthen energy security.