Under the present Indonesia Oil Legislation foreign oil companies can operate only as contractors of the state enterprise. Except for a few companies, most operate under the terms of the "standard" production sharing agreement. This type of agreement was introduced in 1966. To date a total of 40 oil agreements have been concluded, covering onland and (mostly) offshore areas, as compared with 7 agreements prior to 1966. Most of the known prolific oilbasins in Indonesia are situated skirting the Sundaland area in an arcuate zone running from North Sumatra via Northwest Java and the islands in the Java Sea to South-east and East Kalimantan. Main production is obtained from the Tertiary infillings of these basins which may reach a maximum thickness of about 8000 metres. Trapping elements are mostly of the structural type with sandstones as prime reservoir rocks. Exploration activities since 1963 have to date resulted in twelve discoveries onland and two discoveries in the offshore areas. The future outlook would be increased activities and development of all phases of the petroleum industry in Indonesia. Australia could play an important contributory role in providing the requirements for the petroleum industry which until now has to be satisfied from other outside sources.