Indonesia has put in an official request to OPEC to rejoin the 12-member group of oil producing states, according to an official OPEC statement on Tuesday.
“The request has been circulated to all OPEC Member Countries for their consideration and approval,” it said in the statement.
Indonesia, southeast Asia’s biggest economy, first became a member of the organisation in 1962. It was suspended from OPEC on January 1 2009 following a dispute it had with the other members over the high price of oil in 2008, as its own oil output reduced forcing it to become a net oil importer.
“We are pulling out of OPEC,” said the then Indonesian Energy Minister Purnomo Yusgiantoro. “If our production comes back again to a level that gives us the status of a net oil exporter, then I think we can go back to OPEC."
“Indonesia has contributed much to OPEC’s history. We welcome its return to the organisation"
“Indonesia has contributed much to OPEC’s history. We welcome its return to the organisation,” OPEC stated.
Faced with growing domestic demand, Indonesia which currently ranks 23rd in BP’s latest Statistical Review of World Energy, producing 882,000 bpd, has previously said targeted rejoining OPEC by 2020 after it hits 1 million bpd in output. Currently half of Indonesia’s energy needs are met by oil, although the government has plans to reduce this to 23 per cent by 2025 as it seeks to further diversify its energy mix.
The country’s oil and gas industry has suffered from a lack of investment over the past two decades particularly as its fields have matured.
“Considering the feedback, the Indonesian Minister of Energy and Mineral Resources, His Excellency Sudirman Said, will now be invited to attend the next regular Meeting of the OPEC Conference on December 4, 2015. This will include the formalities of reactivating Indonesia’s membership of the Organisation.”
June saw a thaw in relations between Indonesia and OPEC when Minister Said was invited to attend the OPEC International Seminar, where he met OPEC ministers. The OPEC Secretariat has also recently received a high-level delegation from the Indonesian Parliament, headed by the Chairman of its Energy Committee.
In recent months Indonesia has fared well in the global economic slowdown following a raft of strict reforms introduced by the new government of President Joko Widodo. He has already vowed to abolish US$18 billion worth fuel subsidies with the savings being routed towards badly-needed infrastructure and social programmes.
Such moves have won praise from the International Monetary Fund. On a visit earlier this month to the country, IMF head Christine Lagarde backed the strong monetary and fiscal policies taken by the government particularly its infrastructure focused growth strategy.
“The current environment is challenging for emerging market economies, but I noted that Indonesia was better able now to deal with financial volatility, owing to steps taken in the past few years to build policy buffers aimed at strengthening its external resiliency and containing vulnerabilities,” she said.