Indonesia’s Oil and Gas Investment: Optimizing Strategic Commodities and Expanding Business in the U.S.
By: Andhika Pratama
Indonesia, a country rich in natural resources, continues to strengthen its position in the global oil and gas (O&G) industry. Amidst geopolitical shifts and energy transitions that are reshaping international markets, Indonesia’s oil and gas investments are taking a strategic direction through two main approaches: optimizing domestic oil and gas commodity management and expanding business into international markets—particularly the United States. This move reflects not only national energy resilience but also Indonesia’s ambition to become a more prominent player in the global energy landscape.
Optimizing strategic O&G commodities at home forms the cornerstone of building a stronger national energy industry. The Indonesian government, through the Ministry of Energy and Mineral Resources (ESDM), continues to promote greater upstream production efficiency, improve the governance of oil and gas blocks, and attract new investment by refining existing regulations.
Deputy Minister for Investment and Downstreaming and also Deputy Head of BKPM, Todotua Pasaribu, stated that the Indonesian government will encourage state-owned enterprises (SOEs) in the oil and gas and information technology sectors to invest in the United States.
Furthermore, national oil company Pertamina is actively transforming its operations to maximize the value of its strategic assets. Key initiatives such as digitizing exploration and production processes, strengthening drilling technology research, and enhancing human capital capacity are vital to increasing the competitiveness of Indonesia’s O&G sector.
However, domestic optimization alone is not enough. To accelerate growth and expand business reach, international market expansion is the next strategic step. The United States, as one of the largest energy markets in the world, has become a primary target for Indonesia’s oil and gas business expansion.
Luky A. Yusgiantoro, Secretary of SKK Migas, emphasized the importance of the oil and gas sector in driving economic growth. In addition to contributing to state revenue, the sector also provides significant multiplier effects for local communities.
Investing in the U.S. offers several strategic advantages. First, the U.S. energy market is highly open and competitive, encouraging Indonesian companies to elevate their operational and technological standards. Second, such investments provide access to an advanced energy ecosystem, including renewable energy and low-carbon technologies that can be adapted and applied in Indonesia. Third, the expansion strengthens Indonesia’s position in the global energy supply chain, broadens business portfolios, and diversifies long-term revenue streams.
A tangible example of this expansion can be seen in the participation of Indonesian oil and gas companies in drilling and processing projects in energy-rich regions like Texas and Louisiana. These activities extend beyond crude oil exploration and production, with some companies also exploring downstream businesses such as LNG processing and fuel distribution, which offer higher added value. Participation in international projects also opens up opportunities for technology transfer and skill exchange between Indonesian and American workforces.
Deputy Minister Todotua Pasaribu also highlighted that the oil and gas sector is now a strategic commodity that can pave the way for Indonesian companies to penetrate the U.S. market.
It is important to note that overseas O&G business expansion, including into the U.S., must align with sustainability principles. With growing global awareness of climate change, Indonesian oil and gas companies must balance profitability with environmental responsibility. In this context, green investments and the integration of environmentally friendly technologies will be key to future success. The Indonesian government is also expected to provide support through favorable fiscal policies and economic diplomacy to strengthen the global presence of national companies.
Indonesia must maintain the momentum of its oil and gas investment growth, especially in the context of energy transition. Although the world is shifting toward cleaner energy sources, oil and gas remain vital as primary energy and industrial feedstock.
Therefore, Indonesia must play a dual role: as a reliable oil and gas producer and as a responsible initiator of energy transition. By leveraging its comparative advantages and expanding strategic reach, Indonesia has a significant opportunity to reinforce its energy sovereignty while also benefiting economically from active participation in global markets.
Looking ahead, the success of Indonesia’s oil and gas investment strategy will largely depend on synergy between the government, SOEs, and the private sector. Cross-sector collaboration is essential to build a healthy, inclusive, and adaptive investment ecosystem. In the context of business expansion into the U.S., energy diplomacy will also play a key role. Strong bilateral relations between Indonesia and the U.S., particularly in energy, will open more doors for mutually beneficial cooperation.
With a combination of domestic commodity optimization and international expansion to markets such as the U.S., Indonesia is on the right track to solidify its role in the global oil and gas industry. This strategy not only secures national energy supply but also moves Indonesia toward sustainable energy independence and sovereignty.
The writer is an Analyst of Strategic Policy Issues
