Indonesia's OPEC status in jeopardy: Report

Indonesia, the current president of Opec, became a net importer of crude oil for the first time in February, according to official figures that raise questions about its status as a member of the oil cartel, Financial times reported.

The move comes at a time Indonesia is playing a leading role in presenting the public face of the Organisation of Petroleum Exporting Countries to disgruntled oil consumers facing oil prices at 14-year highs. The reversal was caused by Indonesia's difficulties in attracting oil and gas investment as its fields decline and as its domestic demand increases.

Indonesia is not the only oil producer facing a decline in reserves.

Barclays Capital in a recent report said: "We have been using very downbeat forecasts for non-Opec growth this year, with no net growth forecast outside Russia for a second year and for the third year of the past four."

UK and US figures show year-on-year production declines of 757,000 barrels a day, far worse than expected, the report said.

According to Indonesia's Directorate-General of Oil and Gas, in the month of February, Indonesia exported 13.5m barrels of crude, or 467,082 b/d, and imported 14.9m barrels, or 515,289 b/d.

That was followed in March by the record import of 17.4m barrels of crude, or 561,733 b/d, and exports of 14.3m barrels, or 462,430 b/d. In both months, Indonesia's total production stood at about 1.1m b/d, below its current Opec quota of 1.27m b/d.

Purnomo Yusgiantoro, the energy minister and the current president of Opec, said he was confident Indonesia's status as a net importer was temporary and that it would be a net exporter again by the end of this year. "We believe that in the future the production will be picking up again," he told the FT.

But analysts think Indonesia's ageing oil fields and a dearth of investment in the oil and gas sector due to tax and bureaucratic barriers mean that will take serious work.

According to Kurtubi, director of Jakarta's Centre for Petroleum and Energy Economics Studies, Indonesia needs to increase production to 1.3m b/d in the next three years to keep up with domestic demand.

That, he said, was feasible with current reserves only "if the investment climate is good and investors come again to Indonesia".

As part of its efforts to lure fresh investment, Jakarta needs, Kurtubi said, a quick resolution of disputes now holding back production such as the long-running one between state oil company Pertamina and ExxonMobil over the Cepu field in Java.

The country has been a net importer of petroleum products for some time already but thanks to its status as the world's largest exporter of natural gas and its vast coal reserves, Indonesia remains a net exporter of energy.(*)