Indonesian Oil News Round Up
1. Ginandjar Advises Indonesia to Quit OPEC
2. Oil price hike to affect textile industry
3. Bisnis Indonesias editorial summary: TO AVOID AN OIL DISASTER
4. Indonesian oil company is in trouble
Ginandjar Advises Indonesia to Quit OPEC
May 29, 2004
Laksamana.Net - Former energy minister Ginandjar Kartasasmita says Indonesia should resign from the Organization of Petroleum Exporting Countries (OPEC) because the country has become a net importer of crude oil.
"There are no advantages for us to stay with OPEC… [we] will do fine without OPEC," he was quoted as saying Friday (30/5/04) by the Associated Press.
He said Indonesia should withdraw from the cartel "if we can't boost our crude oil production".
Indonesia in February exported 13.5 million barrels of crude - 467,082 barrels per day (bpd) – while imports amounted to 14.9 million barrels (515,289 bpd), according to data from the Directorate General of Oil and Gas.
In March the country imported a record 17.4 million barrels (561,733 bpd) and exported 14.3 million barrels (462,430 bpd).
While many of OPEC’s 10 members are exceeding their production quotas, Indonesia cannot meet its current quota of 1.218 million bpd.
Ironically, Indonesia currently holds the rotating presidency of OPEC and has had to deal with complaints from oil-hungry countries over record high oil prices.
INDONESIA: Oil price hike to affect textile industry
May 28, 2004
JAKARTA: According to a cabinet member an increase in the world oil price will lessen the country's competitive edge in such export goods as textiles and textile products because oil is a raw material in their production process.
"National industry products such as textiles and garments will be affected negatively if the oil price continues to increase," Industry and Trade Ministeer Rini MS Soewandi was quoted as saying.
She said the industry as a user of polyster would be affected by the increase in the oil price because oil was a vital ingredient in the production of polyster.
But Rini predicted the increase in the oil price would not last long because many of the oil-consuming countries were entering summer time.
"In summer, demand for oil usually decreases. So we are optimistic the oil price will come down again and no longer have an adverse effect on national industry," the minister said.
Bisnis Indonesias editorial summary: TO AVOID AN OIL DISASTER
May 27, 2004
The increase in the world market price of oil, which has hit more than US$40 per barrel, could spell disaster to Indonesia`s economy.
Despite its membership in the Organization of Petroleum-Exporting Countries (OPEC), Indonesia is a big oil importer. It exports crude oil at a low price but imports refined oil at a higher price and in great quantities. This is because the country has a limited number of oil refineries.
This has greatly affected Indonesia`s economy. As a consequence, the oil subsidy provided by the government would drastically increase. This would pose a problem as state funds are limited.
Indonesian oil company is in trouble
May 26, 2004
Indonesia's state-owned oil and gas company Pertamina has asked for a bailout as its costs have exceeded its government subsidies.
Pertamina's finance director Alfred Rohimone said the company is on the brink of running a deficit, and asked Indonesian legislators to help it avert a crisis.
"The company is bleeding. It is urgent for the government to help Pertamina," The Jakarta Post quoted Rohimone as saying.
He said Pertamina had cash reserves of less than two trillion rupiah ($216 million) at the end of April, but the company's costs exceeded $540 million per month to import crude oil and fuel products. Its financial condition has forced Pertamina to cancel several projects.
The company had cash reserves of 23 trillion rupiah ($2.5 billion) in 2001, but said they were depleted through repayment of government loans.
Pertamina is charged with supplying fuel for the domestic market at stable prices. The company imports some 300,000 barrels of crude oil and fuel products a day at international market prices.