Indonesia faces difficulties to raise production

Indonesia is facing difficulties to increase its crude oil production output to meet its new production quota increase of 41,600 barrels per day (bpd), following a decision by the OPEC oil cartel to increase production by 800,000 bpd starting Oct. 1, 2000.

Oil expert Kurtubi said Indonesia's oil production output had reached its maximum production capacity.

"Our national crude oil output had reached its peak and maximum level. Indonesia cannot at once increase production from 1.317 million bpd to 1.358 bpd in the next two weeks. Indonesia will need at least six months to meet the quota. And that could be done only by reviving old wells. And that's difficult," he said.

With the increasing crude oil prices, Kurtubi suggested that the government and the House of Representatives adjusted the crude oil price assumption in the state budget from US$20 a barrel to around $28 a barrel.

Crude oil prices rose to $35.28 a barrel in the New York Mercantile Exchange, while the North Sea Brent oil sold at $34.25 a barrel - the highest level in the last 10 years.

Nevertheless, Kurtubi warned that the West power, led by the United States would continue pressing OPEC individual members, especially Saudi Arabia to flood crude into the world market. Therefore, the Indonesian government should continue fighting in the OPEC forum to maintain crude output at reasonable level so that crude oil prices would stay at between $22 to $28 a barrel. (*)