RI turns down offer to reactive OPEC membership

By Febry Silaban

The government of Indonesia has turned down an offer from the Organization of Petroleum Exporting Countries (OPEC) to reactive the country?s membership in the oil cartel.

Vice Minister of Energy and Mineral Resources Arcandra Tahar said on Wednesday that the decision was based on a recent direction from President Joko Widodo. ?This is line with the direction of the president to freeze (the OPEC membership),? he said.

He said that the government has a number of reasons to continue to suspend the country?s OPEC membership, but declined to disclose them.

The government suspended the OPEC membership in late 2016 following a decision by the grouping to cut down oil production. The withdrawal was the country?s a second exit from the group. It made a similar move in 2008 and reactivated its membership, which required an annual payment of 1.2 million euros, in early 2016.

Two key OPEC members Saudi Arabia and United Arab Emirates in May of this year offered Indonesia to reactivate its OPEC membership. At the time, Indonesia said it was interested on the condition that it is not required to cut its oil production, which has been dwindling in recent years.

Elsewhere, Arcandra said that the suspension of its OPEC membership will not hamper the government from making oil import as crude can be sourced from anywhere, both from OPEC and non-OPEC members, as long as the price is economical.

Editing by Reiner Simanjuntak