Indonesia Decides to Suspend its OPEC Membership
The Indonesian Government has decided to suspend its membership in the Organization of Petroleum Exporting Countries (OPEC). This decision was delivered by Minister of Energy and Mineral Resources Ignasius Jonan in the 171st Meeting of the OPEC Conference in Vienna, Austria, on Wednesday (30/11).
“The decision was made following the organizations decision to cut down crude oil production excluding oil condensates by 1.2 million barrels per day,” Jonan said as quoted from a press release of the Ministry of Energy and Mineral Resources, in Jakarta, on Thursday (1/12) morning.
According to Jonan, the OPEC also requested Indonesia to cut down its oil production by five percent, or about 37 thousand barrels per day.
In fact, Jonan went on to explain that the need for state revenue remains large. He mentioned that in the 2017 Draft State Budget (RAPBN), oil production has been set to be lowered by five thousand barrels per day compared to 2016.
“Accordingly, Indonesia agreed to cut its oil production by five thousand barrels per day,” Jonan said.
Minister of Energy and Mineral Resources affirms that as a net crude oil importer, Indonesia will not obtain any benefits by reducing domestic crude production. Most likely it will only cause higher fuel prices.
According to Jonan, Indonesias decision to suspend its membership is the best decision for all OPEC members. Given such a decision for a cut of 1.2 million barrels per day can be implemented, and on the other hand, Indonesia is not bound by the decisions taken. This is consistent with the national interests of Indonesia.
Indonesia has already suspended its OPEC membership twice. The first was in 2008 and came into force in 2009. Indonesia decided to rejoin OPEC in early 2016 and suspended its membership on 30 November 2016. (Bureau of Communications and Information Service of the Ministry of Energy and Mineral Resources/ES) (MUR/YM/Naster)