Indonesia Decides To Temporarily Quit OPEC

Jakarta (Antara Bali) - Indonesia has decided to temporarily quit the Organization of Petroleum Exporting Countries (OPEC), Energy and Mineral Resources (ESDM) Minister Ignasius Jonan said in a statement on Thursday .

Jonan announced the decision at an OPEC meeting in Vienna, Austria on Wednesday, a news release  of the energy and mineral resources ministry said.

Jonan, who attended the meeting, said the Indonesian government made the decision after OPEC agreed to cut its crude oil production by 1.2 million barrels per day not including condensate.

With the agreement Indonesia's  share of the cut was around  5 percent of its total production or around 37,000 barrels per day .

Jonan said Indonesia, already a major net importer of oil, still relies on oil revenue for much of its state income.

He said based on the 2017 state budget, it is predicted that the country's oil production  in 2017 would fall only by 5,000 barrels per day  in comparison with production in 2016.

"That is the level of production cut  Indonesia cold accept that the country could not afford a cut of  37,000 barrels per day as required by OPEC," he said.

He said for Indonesia as a net importer it would be difficult to agree  to the cut as required by OPEC when oil price is theoretically would increase.

Head of the Communication Bureau , Public Information Service and Cooperation of the ESDM ministry Sujatmiko said the government has taken the right decision in temporarily quitting OPEC.

"With the decision, Indonesia is not bound by the OPEC decision to cut production," Sujatmiko said .

It was the second time Indonesia to suspend its OPEC membership.

In 2009 the country officially suspend its membership in OPEC, but early this year it decided to be an active member again. (WDY)