Kadin Supports Indonesia Out of OPEC

Kadin Supports Indonesia Out of OPEC

Hardini Puspasari, the chairperson of the Standing Committee of Cooperation
Assistance/Development of Renewable Energy at the Indonesian Chamber of
Commerce and Industry (Kadin), has said she supported the Indonesian
government for temporarily quitting the membership of the Organization of
Petroleum Exporting Countries (OPEC).

"The government's move, as stated by President Joko Widodo (Jokowi), to exit
temporarily from OPEC membership should be supported and appreciated,"
Puspasari said, when contacted from Yogyakarta, on Friday.

According to her, the step will automatically give a large space for the
development of new and renewable energy in Indonesia, because Indonesia has
a huge potential for renewable energy. In addition, she said that the
increased need for fuel for the Indonesian people has become an urgent
priority that requires serious attention.

Therefore, the government is expected to soon develop the renewable energy
sector in a focused and serious manner, so as to improve the national
economy, both in terms of revenue and expenditure, she stated. Energy and
Mineral Resources Minister Ignasius Jonan said in a statement on Thursday
that Indonesia has decided to temporarily quit the OPEC membership.

Jonan announced the decision at an OPEC meeting in Vienna, Austria, on
Wednesday. Jonan, who attended the meeting, said the Indonesian government
made the decision after OPEC agreed to cut its crude oil production by 1.2
million barrels per day, not including condensate.

With the agreement, Indonesia's share of the cut was around 5 percent of its
total production or around 37,000 barrels per day. Jonan said Indonesia,
already a major net importer of oil, still relies on oil revenue for much of
its state income.

He said based on the 2017 state budget, it is predicted that the country's
oil production in 2017 would fall only by 5 thousand barrels per day in
comparison with its production in 2016. "That is the level of production cut
Indonesia could accept, as the country could not afford a cut of 37 thousand
barrels per day as required by OPEC," he pointed out.

He said for Indonesia, as a net importer, it would be difficult to agree to
the cut as required by OPEC when oil price theoretically would increase.

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Link to Original Article:
http://en.tempo.co/read/news/2016/12/03/056825185/Kadin-Supports-Indonesia-O
ut-of-OPEC

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com