The Indonesian government plans to quit membership in the Organization of Petroleum Exporting Countries (OPEC) because of years of declining in production and investment and the fact of becoming a net oil importer.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro on Wednesday said that the government would sign a declaration confirming the departure very soon. He also expressed dissatisfaction on surging oil prices these years.
Oil production in Indonesia in 2008 was revised down from 1,034,000 barrels to 926,000 barrels per day, far below the quota of 1.3 million barrels set by OPEC, which forced Indonesia to quit.
Although quitting OPEC can save Indonesia 3.1 million US dollars every year in membership fee, the quit means that Indonesia will lose its vote at OPEC to influence global oil prices when in crucial times.
So, Yusgiantoro also said that if one day Indonesia come back as a net oil exporter again, it will rejoin OPEC. But Indonesia has to boost its oil production at first.
Indonesian government raised oil prices by 28.7 percent on May 24 with the pressure of soaring international oil price, which has triggered demonstrations from university students and invited critics from political and religious elites.
If the problem of energy could not be solved in time, it will be difficult to keep political stability in Indonesia.
As domestic consumption rises and international prices are kept at high level, Indonesia has no choice but to re-discover its abundant oil and gas riches.
To quit OPEC may be a wake-up call for Indonesia to improve investment, upgrade poor infrastructure and reform its weak legal system and red tape to absorb more foreign investors.
Vice President Jusuf Kalla said?in Jakarta on?Thursday that his country is determined to become a major oil exporter again in five years by means of properly explore in oil fields and save domestic fuel consumption.
On the same day, the Ministry of Energy and Mineral Resources kicked off the tender for 25 onshore and offshore oil and gas production areas dispersed from the western island of Sumatra to easternmost Papua in its efforts to lure more private investment.
It can be seen as the first stage of a series of tenders in the energy sector by Indonesia. The remaining question is, will the only member of OPEC in Asia-Pacific region turn back in just 5 years?
(Xinhua News Agency May 30, 2008)
