Indonesia Wants to Raise Oil Output Above OPEC Cap
Singapore, Dec. 1 (Bloomberg) -- Indonesia, the only Asian
member of OPEC, wants to produce about 9.5 percent more crude oil
next year to increase export earnings, though the increase would
take it above a production limit set by OPEC.
Indonesia's Ministry of Mines and Energy said it wants to
pump 1.3 million barrels of crude oil a day next year, pricing it
at $15 a barrel for estimating budget revenue. Under the present
pact between the 11-member Organization of Petroleum Exporting
Countries, Indonesia can produce up to 1.187 million barrels of
crude a day.
``We hope to export more oil and will discuss with the other
OPEC members about increasing Indonesia's oil production quota,'
said Iin Arifin Takhyan, adviser to the Minister of Mines and
Energy and a member of the board at state-owned oil company PT
Pertamina.
Any move to increase output by Indonesia could prompt
similar plans by other oil producers, though they will need OPEC
approval. The group will meet in February to decide on extending
output cuts. OPEC member Venezuela said this week the oil cartel
hadn't decided if the cuts will continue beyond the March 31 date
set previously.
Pertamina's Iin said OPEC can afford to produce more oil
because current world demand -- at 78.6 million barrels a day --
exceeds supply by about 2.2 million barrels a day.
Some analysts agree.
``As we go into the year 2000, we will definitely see an
increase in OPEC production. This is necessary to meet rising
demand. Otherwise, prices could go as high as $35 to $40 a
barrel,' said Huw Williams, head of Asian oil & gas research at
Deutsche Bank AG.
Higher oil prices give Indonesia more income to finance its
budget deficit, but it doesn't want prices to rise ``too high'
as it would encourage consumers either to buy less oil or find
alternative energy sources, Iin said.
Oil Dollars
Indonesia is enjoying a windfall from the surge in crude oil
prices resulting from a pledge by OPEC and other producers in
April to cut output 7 percent to lift sagging prices.
The cuts pushed up prices to a post-Gulf War high of $27.15
a barrel on Nov. 22 from a 12-year low of $9.98 in December 1998.
Higher oil prices have helped Indonesia's economic recovery.
The country's mining and oil output in the July to September
period grew 4.3 percent on quarter, and 0.62 percent on year.
The government now expects to receive 57.3 trillion rupiah
($7.8 billion) in oil and gas revenue for this fiscal year ending
March 31, 2000.
Prices now look set to breach $30 a barrel on higher winter
fuel demand, said John Paisie, an oil analyst at Pricewaterhouse
Coopers.
``Brent at $30 a barrel is too high. I think a more
reasonable price over the long term is between $20 and $24 a
barrel. I think OPEC should work towards that target,' said Iin.
OPEC controls about 35 percent of the world's oil supply, but
more than 90 percent of global oil reserves. |
