Indonesia Will Rejoin OPEC, But Without Output Cut

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  • OPEC Secretary General Abdullah al-Badri addresses a news conference after an OPEC meeting in Vienna (31/5). REUTERS/Leonhard Foeger

    OPEC Secretary General Abdullah al-Badri addresses a news conference after an OPEC meeting in Vienna (31/5). REUTERS/Leonhard Foeger

    TEMPO.CO, Jakarta - Indonesia has decided to reactivate its membership in the Organization of the Petroleum Exporting Countries OPEC) under the condition that it won't have to cut production, as the nation's daily output has been on a decline.

    The Indonesian Energy and Mineral Resources Ministry's spokesman Sujatmiko said they have sent a letter to OPEC on May 24.  

    Indonesia left OPEC in 2008. In early 2016, the country decided to rejoin the organization. In November that year, during an OPEC conference in Vienna, Energy Minister Ignasius Jonan decided to deactivate membership temporarily as OPEC's strategy to cut production was not in line with the government's priority to boost output.

    Read also: Indonesia Wants to Rejoin OPEC

    At that time, OPEC decided to cut crude procustion by 1.2 million bpd, and asked Indonesia to cut 5% of the national production or around 37,000 bpd.

    Indonesia's reentry in OPEC was a request by the Saudi Arabia and United Arab Emirates' energy ministers. President Joko Widodo responded positively to their approach.

    According to Sujatmiko, the request showed that Indonesia has a big role in OPEC.

    "The energy ministers of Saudi Arabia and the UAE asked as to reactivate membership. It means that our role is needed. There are roles in OPEC that can be taken by Indonesia to maintain balance," Sujatmiko said on Monday.

    BISNIS.COM