Indonesia's Energy Minister Seeks To Rejoin OPEC

Indonesia's Energy Minister Seeks To Rejoin OPEC
Indonesia's energy minister says he would seek President Joko Widodo's approval for the country to rejoin OPEC, seven years after leaving the oil exporters' group.


JAKARTA, May 7 (Reuters) - Indonesia's energy minister said on Thursday he would seek President Joko Widodo's approval for the country to rejoin OPEC, seven years after leaving the oil exporters' group.

If it returned, Indonesia would be the fourth-smallest producer in the Organization of the Petroleum Exporting Countries ahead of Libya, Ecuador and Qatar, and bring the number of participants to 13 countries.

Indonesia was the only Asian OPEC member for nearly 50 years before leaving the group in 2008 as oil prices hit a record high, and rising domestic demand and falling production turned it into a net oil importer.

"I will ask the president to consider rejoining as a member of OPEC, so we are close to the market," Energy Minister Sudirman Said told reporters. "We have been offered (an opportunity) to rejoin."

OPEC termed Indonesia's departure a "suspension" and Ecuador, which rejoined in 2007, set a precedent for a return from suspension. An OPEC source said the door was always open.

"If a country fulfils the criteria for membership, of course there is the possibility to join the organization," the source said.

OPEC's statute stipulates, however, that any "country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members."


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Hasim Sutanto | May. 8, 2015
Its really a joke if Indonesia becomes an OPEC member again, because if no policies changes in the near future, Indonesia will be a forever net crude oil importer even counting natural gas as equivalent BTU basis in terms of barrels of oil or BOE/D ( barrels of crude oil equivalent per day converted from MMBTU/D or commonly as MMSCFD). How can an oil importing country becomes a member of the organization of exporting crude oil countries? So, really no need to spend efforts to strengthen the relationships with the sellers, because buyers are always the king--as always are the rules of the game in dealing any business. Instead I advise the Ministry of ESDM should spend more time and efforts now in having close relationships with oil & gas exploration companies, to invite them to invest in exploration and sit down with them to discuss and come up with solutions to solve all the red tapes which are always there in doing oil and gas E&P business in Indonesia. This is the key for Indonesia not to rely heavily on importing oil, but instead, to ignite oil companies to interest in exploring and finding more oil and gas in Indonesia. This can of course, not only negate deficit to the Indonesian budget, but also strengthen rupiah to US$ valuation and generate additional income for Indonesia as a whole!!!

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