Oil industry gets price warning<\/p>\n
JAKARTA (JP): Subroto, a former secretary-general of the
\nOrganization of Petroleum Exporting Countries (OPEC), is upbeat
\nthat oil prices will keep improving, but warns the organization
\nto prevent prices from becoming too high.<\/p>\n
"If the prices rise too high, it is feared that those who feel
\nunfavorably affected may exert pressure in response," he was
\nquoted by Antara as saying yesterday during the fifth Asia
\nPacific Mining Conference and Exhibition at the Jakarta
\nConvention Center.<\/p>\n
Oil prices currently reach about US$21 per barrel, and Subroto
\nis optimistic that it will keep increasing.<\/p>\n
According to Subroto, the current rise in oil prices resulted
\nfrom at least two factors -- the supply-demand stability on the
\nworld market and speculations that Iraqi oil will not enter the
\nmarket.<\/p>\n
The global oil supply, he said, currently reaches 60 million
\nbarrels per day (bpd), of which about 25 million bpd are supplied
\nby OPEC and the remainder by non-OPEC countries. The supply can
\nbe wholly absorbed by the world market, particularly because
\nEurope and North America are approaching winter.<\/p>\n
There is no fear of the world market being oversupplied, he
\nsaid, because Iraq is unlikely to export its oil this year or in
\n1997.<\/p>\n
"The supply-demand stability is indeed beneficial to producers
\nbecause it will keep propping up oil prices," he said.<\/p>\n
Because of it, Subroto said, OPEC, in its next meeting in
\nNovember, should maintain its current production quota of 24.52
\nmillion bpd, so that the group's members can benefit from the
\nrise in oil prices.<\/p>\n
"Indonesia must hold on to it because in terms of production
\nIndonesia has reached its capacity maximum," he said. "What we
\nneed is a price increase."<\/p>\n
Subroto predicted there would be proposals for an increase in
\nthe quota from such countries as Saudi Arabia and Iran. Under
\ncurrent market conditions, OPEC could raise its quota to 26
\nmillion bpd.<\/p>\n
Asia<\/p>\n
The four-day seminar and exhibition, attended by delegations
\nfrom ASEAN countries, Canada, South Africa, Poland, the United
\nStates, India, China, Japan, New Zealand and Australia, was
\nopened yesterday by Ukar Sulistiyo, an expert assistant to the
\nminister of mines and energy.<\/p>\n
In his presentation in the seminar, Subroto noted that Asia
\nwill be a new driving force in the oil industry to replace North
\nAmerica and Europe, following the growth in the region's economy.<\/p>\n
"For the first time in the history of oil, North America will
\nnot be the centerpiece of world oil demand. By 1997, oil
\nconsumption in Asia, including Japan, is expected to exceed that
\nof North America. By 2000, the total consumption of Asia,
\nincluding Japan, is expected to reach 21.63 million bpd, compared
\nwith 14.2 million bpd in 1993," Subroto said.<\/p>\n
Exploration activities will increase in the region, but only
\nChina and Vietnam are projected to significantly increase their
\noil production, while Indonesia and Australia are expected to see
\na production decrease and output in Malaysia and Brunei will
\nlevel off, according to Subroto.<\/p>\n
Sluggish oil production raised the dependence of the region on
\noil imports from 59 percent in 1993 and is expected to rise to
\nbetween 62 percent and 64 percent in 2000 and between 68 percent
\nand 69 percent in 2005.<\/p>\n
"Indonesia, at present the largest oil exporter in the region,
\nis expected to become a net oil importer in 2005," he said. (jsk)<\/p>",
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