Indonesia May Return To OPEC But Won't Cut Production

Indonesia May Return To OPEC But Won't Cut Production

Indonesia is open to rejoining OPEC, but only if it can determine its own
production levels, the country's Energy and Mineral Resources Minister
Ignasius Jonan told Reuters in an interview.

"We would have to have a concession for not following cuts from time to
time," Jonan said.

Indonesia, which produces some 800,000 bpd, left OPEC last November, right
after OPEC agreed to curb production to prop up international prices. That
happened less than a year after the cartel's only East Asian member rejoined
its ranks.

Per the agreement, OPEC had asked Indonesia to cut 37,000 bpd from its daily
output, which, Jonan said at the time, the country would not do. What he
agreed to was a 5,000-bpd cut that was stipulated in the 2017 budget.

Indonesia is a net importer of crude oil, and a massive one: it imports
twice what it produces, as local fields near depletion and demand grows.
Current prices are comfortable for net importers, and Indonesia is no
exception, especially in the context of an investment program announced
earlier this year that should boost its local production.

The US$200-billion investment plan was announced in late April and will
involve tendering 14 untapped oil and gas blocks in hopes that foreign
players will show an interest in developing them. To sweeten the offer,
Jakarta has offered potential bidders tax-free imports of equipment and
technology.

The energy minister's current visit to the U.S. is part of an international
tour aimed at promoting the program to investors including Exxon, Chevron,
and ConocoPhillips.

At the same time, the state-owned energy major, Pertamina, is expanding its
international presence, with a focus on Iran and Russia. The company is
already present in Algeria, Iraq, Tanzania, and Nigeria. Its international
oil and condensate production capacity is 150,000 boepd, while domestic
production is around 308,000 bpd.

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Link to Original Article:
http://oilprice.com/Energy/Crude-Oil/Indonesia-May-Return-To-OPEC-But-Wont-C
ut-Production.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com