JAKARTA (Reuters)
Indonesia said on Tuesday it may quit the Organization of the Petroleum Exporting Countries as its declining crude oil output prevents the country from meeting its OPEC quota and has reduced its influence in the cartel.
Indonesia is Asia-Pacific's only member of OPEC, but its crude oil output has fallen in recent years due to ageing wells, a lack of investment, and the absence of any major oil finds.
"We are studying whether we have to stay in OPEC or leave. We are now a crude oil importer and our production has declined to below one million barrels," Indonesia's President Susilo Bambang Yudhoyono said, referring to the country's daily output.
Indonesia produced 977,000 barrels per day (bpd) of oil and condensate in April, an official at the country's energy watchdog said last week.
"Our interests now are different. As an importer, we want oil prices to come down as high oil prices put pressure on our budget. But exporters want a reasonable or even high price since it is their main source of revenue," said Kurtubi, an energy analyst at the Centre for Petroleum and Energy Economics Studies in Jakarta.
Indonesia has huge natural gas and coal reserves, but has been unable to fully exploit those due to a lack of investment and poor infrastructure.
Fuel is heavily subsidized in a country where millions of people live on less than two dollars a day. But with oil trading around a record $120 per barrel, fuel and energy subsidies were forecast to cost the state as much as $20 billion this year, pushing up the budget deficit.
President Yudhoyono said on Monday that the government is considering a fuel price increase of between 20-30 percent to safeguard the budget from rising oil prices.
Indonesia joined OPEC in 1962, just two years after the group was founded in Baghdad. In 2005, a group of advisers to the government had recommended the country leave the group partly because of the financial costs of membership. |
