Middle East conflict triggers energy risk, Elnusa pushes up domestic oil and gas production

JAKARTA - Geopolitical tensions in the Middle East have again raised concerns about the stability of global energy supply, namely the risk of oil distribution disruption in the Strait of Hormuz, prompting energy industry players to assess the importance of accelerating the increase in domestic oil and gas (oil and gas) production to strengthen national energy resilience.

The potential disruption in the shipping lane has raised concerns about global oil distribution, as well as reigniting discussions about Indonesia's energy security.

The government previously said that the national fuel reserves (BBM) are estimated to only last for about 20 to 23 days if there is a global supply disruption.

In the midst of this dynamic, the energy services company PT Elnusa Tbk (ELSA) assessed that the geopolitical situation could actually be a momentum to accelerate the increase in domestic oil and gas (oil and gas) production.

The energy services company, which is part of the Pertamina Group, stated that increasing domestic production is an important step to strengthen national energy independence.

Elnusa Litta Ariesca's President Director, said the company's performance throughout 2025 showed solid growth and could be capital to expand its contribution in supporting the national oil production target.

"Alhamdulillah Elnusa in 2025 is quite solid. So with discipline and hard work, we can achieve the expected target, even exceeding the expected target," he said, Thursday, March 5, 2026.

He explained that the company's revenue increased by around 8 percent year on year (yoy), while net profit was recorded to have grown by around 11 percent compared to the previous year.

According to Litta, Elnusa has an important role in supporting the national oil production target set by the government to reach 1 million barrels per day and as a service company in the upstream oil and gas sector, Elnusa provides various services ranging from seismic surveys, drilling, to production enhancement technology that supports exploration and exploitation activities. domestic oil fields.

"As part of the Pertamina Group, we support the achievement of 1 million barrels of the government, of course, where we strive to remain close to the upstream and also we strive to be able to enter as a locus operator in achieving operational targets and production targets," he said.

He assessed that global geopolitical dynamics actually emphasized the importance of strengthening national energy independence through increased domestic production.

"With this global geopolitical challenge, we are increasingly optimistic that achieving 1 million barrels and national independence is a must," he said.

Litta said that the increase in the national oil production target would have a direct impact on the increase in energy services activities.

However, he admitted that the geopolitical impact on the energy industry is two-sided where Indonesia as a net oil importer still faces challenges when world oil prices soar.

"If we talk about upstream issues, there is actually a plus point if it is upstream, so the price of oil is high. But we also have to see it as an ecosystem between upstream and downstream," he explained.

In the midst of Pertamina's cooperation with various global oil and gas service companies, including Halliburton, Elnusa management considers cross-company collaboration to be common in the oil and gas industry given the very large scale of the project.

Litta emphasized that achieving the national production target requires the involvement of many energy service companies.

"The achievement of 1 million barrels in Indonesia is quite large. So cooperation with any company is very open," he said.

He also emphasized that Elnusa still has a strategic position in the national energy ecosystem as a technical service provider that supports oil exploration and production activities in various regions of Indonesia.

"The point is that we are opening the opportunity to work together with all services companies and other oil and gas companies," he said.

Meanwhile, Elnusa's Finance Director, Nelwin Aldriansyah, added that the increase in global oil prices due to geopolitical conflicts has the potential to open up opportunities for the development of domestic oil and gas fields that were previously considered less economical.

According to him, the cost of producing oil in Indonesia is relatively higher than that of a number of major producing countries in the Middle East, and the increase in oil prices can make more domestic oil and gas fields viable to develop.

In addition, he added that increased oil and gas exploration and exploitation activities will also drive the need for supporting services, which are Elnusa's main business line.

"With the increase in oil prices, of course, the need for services such as drilling, research and survey will also increase. This will certainly have a positive impact on Elnusa's business activities," he said.

He also highlighted the potential risk of global supply disruptions due to geopolitical dynamics, including the possibility of disruptions to energy distribution in the Strait of Hormuz.

"We also see this with several statements from the government that our fuel reserves are only enough for about 20 to 23 days. This is certainly a challenge for the energy sector in Indonesia," he said.

According to Nelwin, this condition should be an impetus to accelerate policies to increase domestic energy production so that dependence on imports can be reduced.

He added that currently Indonesia's oil production is in the range of 800,000 barrels per day and the government is targeting that figure to increase to 1 million barrels per day in the next few years.

"With this government initiative and its aspirations, it will be 1 million barrels, our hope is that this may be faster so that our dependence on imports can be replaced by domestic production to some extent," he said.