Idle Oil and Gas Projects Risk Losing Licenses, Bahlil Warns

Why It Matters

The crackdown could unlock significant domestic output, bolstering fiscal revenues and signaling a tougher stance on idle concessions in a declining oil market.

Key Takeaways

• 301 explored areas idle, licenses at risk.
• Government may revoke licences for non‑operating projects.
• Inpex’s Masela Block received $18 bn investment after pressure.
• 2025 production hit 605,300 bpd, meeting target for first time.
• Oil output fell from 1.6 mbpd (1997) to 580 k bpd (2024).

Pulse Analysis

Indonesia’s regulator is turning a hard line on dormant oil and gas concessions, issuing an ultimatum that could see licences withdrawn for any of the 301 explored blocks that remain non‑operational. By tying licence security to tangible production, the ministry hopes to convert idle acreage into revenue‑generating assets, a move that aligns with broader fiscal consolidation efforts and the need to reduce reliance on imported energy. The policy also serves as a warning to investors that prolonged inactivity will no longer be tolerated, potentially reshaping the risk calculus for future entrants.

The Masela Block illustrates how ministerial pressure can translate into massive capital inflows. After years of stagnation, Inpex responded to the government’s direct outreach—dubbed a ‘love letter’—by committing roughly US$18 billion to develop the gas‑rich field. This infusion not only validates the efficacy of a more assertive licensing stance but also signals to other multinational operators that Indonesia is prepared to reward decisive action with regulatory certainty. The precedent may accelerate similar investments across the country’s extensive offshore basins, especially where infrastructure and market access are already in place.

For Indonesia’s energy landscape, the stakes are high. National oil production has been on a steady decline since the mid‑1990s, falling from a peak of 1.5‑1.6 million barrels per day to just 580,000 bpd in 2024. The modest rebound to 605,300 bpd in 2025—meeting the target for the first time in a decade—underscores the urgency of unlocking idle resources. Reviving these projects could stabilize domestic supply, support government revenues, and provide a bridge as the country pivots toward natural gas and renewable energy pathways, ensuring a more resilient energy security framework for the coming years.

Idle oil and gas projects risk losing licenses, Bahlil warns

By Ni Made Tasyarani (The Jakarta Post) · Monday, 16 February 2026

The sun sets behind an oil‑and‑gas rig operated by Saka Energi Muriah Limited, a wholly‑owned subsidiary of state gas company PGN, in the Kepodang Field of the Muriah Block off Semarang, Central Java (handout photo, SKK Migas).

Energy and Mineral Resources Minister Bahlil Lahadalia is putting pressure on oil‑and‑gas producers to make progress on stalled projects, warning that hundreds of abandoned areas could lose their operating licences.

“There are 301 working areas that have been explored but have yet to commence [operations]. We are now giving [the concession holders] an ultimatum. If they don’t start operating, we will revoke their licences,” Bahlil told a panel discussion during the Indonesia Economic Outlook 2026 on Friday at the Wisma Danantara Indonesia, the South Jakarta headquarters of the state‑asset fund Danantara.

Bahlil noted that the government had previously tried a similar approach with investors, threatening them with ultimatums to push them to realise their investments.

He cited the gas‑rich Masela Block, managed by Japanese oil‑and‑gas giant Inpex, as an example, pointing out that it had shown little progress over its 26‑year concession.

“However, after they received the ‘love letter’, alhamdulillah (praise be to God), now the investment of around US $18 billion has begun. So I think this is what we will do going forward,” the minister said.

Indonesia has experienced a long‑term decline in oil production since nationwide output peaked at 1.5–1.6 million barrels per day (mbpd) in 1996‑1997, gradually falling thereafter to 580,000 bpd in 2024. Meanwhile, the government’s oil‑lifting targets have regularly gone unmet since 2016.

Nevertheless, Bahlil noted that realised production of 605,300 bpd in 2025 marginally surpassed that year’s budget target of 605,000 bpd, marking the first time the national lifting target had been met in nearly a decade.