2.500
%
Positive
33
mm boe
13
%
Indonesia continues to recover from underinvestment, with the revised 'Gross Split' terms and improved PSC flexibility attracting renewed interest and new deepwater discoveries. Regulatory uncertainty over SKK Migas's status remains a watch point. Outlook maintained because fiscal reforms continue to attract investment. Outlook: Positive. Risk premia unchanged at 2.5%.
October 7, 2026
Asia - South East
mm bbl
bcf
Southeastern Asia, archipelago between the Indian Ocean and the Pacific Ocean.
PSC/PSA
Production sharing regime. All upstream activity is under PSCs with SKK Migas, in two forms that contractors may switch between: cost-recovery PSCs and gross split PSCs, under which the contractor bears all costs with no cost recovery. MEMR Regulation 13/2024 replaced the 2017 gross split rules, cutting the split variables from 13 to a handful and setting base splits of 53:47 (oil) and 51:49 (gas) in the State's favour before adjustments, which the Ministry says gives contractors a share of 75–95% once adjustments apply. Contractors also pay income tax and bonuses and are subject to a 25% domestic market obligation.
President Prabowo Subianto took office in October 2024. His populist spending, the creation of the Danantara sovereign wealth fund and the replacement of the finance minister amid the August 2025 protests have raised fiscal-credibility concerns. US and UK guidance cite resource nationalism (export bans and local-content rules), regulatory unpredictability and corruption. The EIA notes declining oil output but a revival in gas exploration: major discoveries in the Andaman Sea (Mubadala, Harbour) and Kutei basin (Eni's Geng North), and the advancement of Inpex's Abadi LNG project.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
© 2024 Oil & Gas Advisors Limited
Website by Rugby Web Design
