Indonesia against OPEC cutting supply at June meeting: Purnomo

Indonesia against OPEC cutting supply at June meeting: Purnomo

Singapore (Platts)--12May2005


Indonesia opposes the idea of OPEC implementing any production cuts when
ministers next meet in Vienna on Jun 15, oil minister Purnomo Yusgiantoro said
Thursday. Asked if Indonesia would support a support a cut in output at the
meeting, Purnomo said: "No, because we still have a high price." He then
clarified: "That's Indonesia's position, not OPEC's position." Talking to
reporters in Singapore on the sidelines of an Asia LNG conference, Purnomo
said of OPEC production: "Now we are producing about 30-mil b/d...Right now we
are at maximum capacity." Responding to a question on whether he thought OPEC
should continue pumping at full tilt, the Indonesian minister replied: "As
long as the oil price is still high, we will try to do what we can." However,
he hastened to add that the current steep prices were not of OPEC's making.
"As we always say, that this high oil price is not because of OPEC. We
contribute only 40% of the market share. The remaining is coming from
non-OPEC."

"$50/bbl is not the equilibrium price," Purnomo said, indicating that it was
not just based on demand-supply balance, but reflected "political and
psychological factors." The 10 OPEC members bound by a combined 27.5-mil b/d
ceiling produced 28.1-mil b/d in April, a Platts survey found this week.
Including Iraq, which is outside the quota system, the cartel's April supply
reached 29.96-mil b/d, the highest level since October 2004, when it reached
30.3-mil b/d. NYMEX June crude futures slumped $1.62/bbl in New York Wednesday
to $50.45/bbl on continued commercial stock builds in the US, and had slipped
below $50/bbl in Access Thursday morning in Asia. On the issue of Indonesia
possibly withdrawing its full OPEC membership, Purnomo's reply was a short
"not yet." The country, which is way below its 1.425-mil b/d OPEC quota with
an April production estimated at just 950,000 b/d, became a net oil importer
for a few months in 2004, and over the past months has been studying the
options of completely leaving the group or switching to an observer status.

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