Minister of Energy and Mineral Resources Bahlil Lahadalia has stated that Red-and-White Cooperatives (Koperasi Desa Merah Putih or KDMP), village-based cooperatives typically engaged in the sale of daily necessities, are not eligible to manage community oil wells under the government’s new regulation.
The clarification follows the issuance of Ministerial Regulation No. 14/2025, which sets out guidelines for the management of idle or underutilized oil wells. The regulation permits partnerships between licensed oil and gas companies and community-based entities such as regional-owned enterprises (BUMD), cooperatives, and small and medium enterprises (SMEs).
“This is not for fake cooperatives, nor for those that sell crackers or daily goods,” Bahlil said during a press conference at his office on Tuesday, July 29. He emphasized that KDMPs, given their core business in retail rather than energy, do not meet the requirements to manage oil wells.
His statement aims to counter recent reports suggesting that KDMPs could be granted management rights under the new policy.
The regulation is part of the government’s broader strategy to strengthen national energy security by tapping into underutilized oil and gas reserves. It enables operational and technological collaboration between industry players and eligible community enterprises to develop idle or underperforming oil fields.
However, the government has imposed strict financial criteria for participation. Only cooperatives, SMEs, or regional enterprises with capital between Rp5 billion (US$305,000) and Rp10 billion (US$610,000) will be considered.
“For SMEs, the required capital is around Rp5 billion, and for medium-sized businesses, approximately Rp10 billion. They can form consortiums to meet this requirement,” said Deputy Energy Minister Yuliot Tanjung in an earlier statement on July 1.
Officials believe this approach will attract credible partners, stimulate local economies, and boost domestic oil production while minimizing the risk of mismanagement.
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