Indonesia’s crude oil production declined over the last decade due to the natural maturation of producing oil fields combined with a slower reserve replacement rate because of decreased exploration/investment.

Indonesian government officials said Indonesia would offer 15 conventional and unconventional oil and gas blocks to potential investment firms, hoping for this more flexible terms could help to boost interest in this industry after a flat performance in 2016.

Indonesian Deputy Minister of Energy Alcán la Tahar said, in an effort to attract new investment, the Indonesian government will apply the new production rules this year and will modify the rules on recoverable cost rules and, where possible, to reduce the import tax of exploration equipment.

"The latest blocks include 10 conventional oil and gas blocks and 5 unconventional oil and gas blocks," said Vilate Ma Jia Puya, general manager of the Indonesian Ministry of Energy's oil and gas sector. All blocks will be provided according to the production contract model.

Unlike conventional reservoirs, unconventional oil and gas do not naturally pass through rocks, making it more difficult to exploit unconventional oil and gas resources.