Indonesia considers quitting Opec as output falls - Emirates24|7

Indonesia considers quitting Opec as output falls

 

Indonesia said on Tuesday it may quit the Organization of the Petroleum Exporting Countries, citing a decline in crude oil output that has reduced its influence in the cartel.

Indonesia is Asia-Pacific's only member of Opec, but its crude oil output has fallen in recent years due to ageing wells, a lack of investment, and the absence of any major oil finds.

Its status as a net importer means it would benefit from lower oil prices, putting it at odds with other Opec members, who favour higher prices.

"We are studying whether we have to stay in Opec or leave. We are now a crude oil importer and our production has declined to below one million barrels," Indonesia's President Susilo Bambang Yudhoyono said, referring to the country's daily output.

Indonesia produced 977,000 barrels per day (bpd) of oil and condensate in April, an official at the country's energy watchdog said last week. Of this, 859,000 bpd were crude and 118,000 bpd were condensate.

An Opec spokeswoman declined to comment on the issue.

Indonesia's status as a net oil importer has prompted many analysts to question its continued membership of Opec, especially at a time when the cartel has been expanding.

Angola, Africa's second largest producer, joined more than a year ago and will add up to 2 million bpd to the cartel by 2009, while Ecuador added some 510,000 bpd when it rejoined Opec last November as the cartel's smallest producer.

Indonesia has aired the possibility of leaving Opec before. In 2005 a group of advisers to the government had recommended the country leave the group partly because of the financial costs of membership. (Reuters)

 

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