Indonesia studying withdrawal from Opec, says oil minister

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Feb 7: Indonesia may quit the Organisation of Petroleum Exporting Countries (Opec) as falling crude oil production pushes it closer to becoming a net importer of the fuel.

“We have set up a team to study whether or not we should stay in Opec,” Indonesia’s oil minister Purnomo Yusgiantoro told a parliamentary hearing in Jakarta on Monday. “The result will be submitted to a cabinet meeting, because there are political matters involved.”

Opponents of Indonesia’s Opec membership have cited the country’s falling oil production and periodic need to import more oil than it exports. Indonesia’s oil output has fallen 5% annually for the last five years to less than a million barrels a day.

Indonesia’s net crude oil exports declined to 30,000 barrels a day in 2004 from about 100,000 barrels a day in 2003, said the director general of oil and gas at the energy and mineral resources ministry Iin Arifin Takhyan on Monday. Indonesia was a net importer of crude oil for four months in 2004, he said.

“There are opinions that we should withdraw from Opec,” Mr Purnomo told a parliamentary hearing in Jakarta on Monday. Any decision on membership “involves our relationships with some countries, especially in the middle-east,” he said.

The committee will study the advantages and disadvantages of Indonesia’s participation in Opec, Mr Purnomo said, without giving details. The South-east Asian country’s possible withdrawal from the group hasn’t been discussed with other members, he said. “The membership has some political benefits. That’s why we have to be very careful in making this decision.”

Opec’s six middle eastern members including the most influential, Saudi Arabia, control 63% of the world’s oil reserves. “The core of Opec really are the middle eastern players,” said director of the UK-based Oxford Institute for Energy Studies Robert G Skinner. “If one of them were to pull out that would be quite devastating.”

Mr Purnomo last year led the oil producers’ group as president. Opec’s 11 members are Saudi Arabia, Iran, Venezuela, Iraq, United Arab Emirates, Kuwait, Nigeria, Libya, Indonesia, Algeria and Qatar.