Indonesia to take decision on OPEC membership by Nov: official

Jakarta (Platts)--27May2008

Indonesia expects to decide by November whether to maintain its

membership of OPEC or quit the group, the country's OPEC governor Maizar

Rahman said Tuesday.

     "The team [set up to evaluate the country's OPEC membership] has yet to

recommend anything to the government. We hope we could give a recommendation

between October-November this year," Rahman said. 

     Meanwhile, energy minister Purnomo Yusgiantoro said when asked whether

the government has reached a final decision over its OPEC membership: "It has

yet to be decided. There is plenty of time to exercise many possibilities."

     If Indonesia does decide to leave the oil producer group, it will come

into effect on January 1, 2009, Yusgiantoro said.

     Indonesia is considering withdrawing from OPEC because it is no longer a

net exporter of oil, President Susilo Bambang Yudhoyono has said. 

     The issue is whether to quit OPEC temporarily or remain a member while

the country tries to increase oil production, according to Yusgiantoro.

     Rahman said Tuesday that he favored maintaining OPEC membership, as it

would help Indonesia secure crude oil supplies amid tightening global

supply-demand balances.

     "Consumer countries will compete to secure crude oil. Japan, China and

India have offered technologies to Middle East countries in a bid to get crude

oil supply guarantees from producer countries. Therefore Indonesia should

maintain its OPEC membership to secure its crude supply from other OPEC

members, as we could not offer technology," Rahman said.

      He reiterated that other OPEC members have no problem with Indonesia's

crude oil production decline in recent years.    

     Indonesia's crude output has been falling because of natural declines at

ageing fields and it missed its 2007 target for oil and condensate output of

950,000 b/d, pumping only 910,000 b/d. 

       In April, the country's crude oil production averaged 859,853 b/d, down

by 1% from March.

      Even if Indonesia leaves OPEC, it could, like Ecuador, rejoin if it

manages to increase output and become a net exporter again, Rahman has said

previously.

     Ecuador left the organization in the early 1990s but resumed its

membership in November 2007. 

      Indonesia joined OPEC in 1962. In 2005, the government considered

quitting the group but decided that membership gave economic and political

benefits to the country.

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