Southeast Asia

Aug 20, 2005

Indonesia considers quitting OPEC

JAKARTA - The government said it is considering to quit the Organization of Petroleum Exporting Countries (OPEC) as the country's oil production has continued to decline to the point where it is barely enough to meet domestic requirements.

A team has been forced to study the benefits and losses of remaining in the oil cartel, Energy and Mineral Resources Minister Purnomo Yusgiantoro said.

Purnomo said the final decision on the position of the country in OPEC will be based not only oil production technical matters but also on the annual fee the government has to pay to OPEC.

The country's oil production has declined sharply over the past several years while domestic requirement, especially in oil fuels, continues to rise from year to year.

The country's production of crude oil has continued to decline as there were less explorations especially after the regional crisis in 1997 that hit the country the hardest causing worse security problem and legal uncertainty.

The benefit of remaining in OPEC at present is that it is easier to look for suppliers of gas in liquefied natural gas to feed fertilizer industry, Purnomo said referring to state-owned urea fertilizer company PT Pupuk Iskandar Muda in Aceh.

He admitted that the country has become a net importer of oil but that position could easily change if investors could be persuade to increase explorations.

(Asia Pulse/ANTARA)

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