JAKARTA, 5 May 2005 — Indonesia’s membership of OPEC is not in doubt despite a plunge in oil production levels which could lead it to become a net importer, the country’s energy minister said yesterday.
Purnomo Yusgiantoro said even if Indonesia’s output levels dipped further, its status as part of the Organization of Petroleum Exporting Countries group was assured. “I have asked OPEC about the matter and they said that when you want to join the organization you have to be a net exporter. But when you are already there and have become a member, you will continue to be a member,” he said. Yusgiantoro, who stepped down as OPEC president earlier this year, said that despite huge imports of refined oil to supplement the meager supplies from Indonesia’s own creaking energy industry, the country was still a net exporter. “In OPEC, comparison should be made on a crude-to-crude basis. Crude exports should be compared to crude imports as well,” he added, according to the state Antara news agency.
On a crude-to-crude comparison, Indonesia is still categorized as a net exporter, even though the margin is relatively small, the minister said. “But it is not impossible that we could turn to be a net importer,” he added.
Indonesia joined the 11-nation OPEC, which supplies nearly a third of global crude oil, in 1962, but the country’s oil output has fallen five percent annually over the last decade to less than a million barrels per day (bpd).
Its crude oil exports dropped sharply to 30,000 bpd in 2004 from 100,000 bpd in 2003, forcing Indonesia to become a net importer for four months of last year, officials said. Some analysts said Indonesia risked losing valuable foreign investment in the sector if it exits OPEC as it would no longer be viewed as having oil potential. OPEC’s members are Saudi Arabia, Iran, Venezuela, Iraq, United Arab Emirates, Kuwait, Nigeria, Libya, Indonesia, Algeria and Qatar.
Meanwhile, Indonesia said yesterday it plans to offer incentives to encourage bids for up to 43 new oil and gas blocks this year after failing to attract investment in a number of concessions in 2004. Yusgiantoro said the shape of the incentives had yet to be determined but the government was looking to neighboring countries for inspiration.
Yusgiantoro said this year’s tendering process would include 23 concessions which Indonesia failed to offload last year as the country grappled with global oil giants in protracted contract disputes.
ExxonMobil, the world’s biggest oil and gas firm, has stalled development of Cepu, Indonesia’s largest untapped oil deposit, for four years because state oil company Pertamina wants a bigger stake before extending a project license.
