Indonesia has difficulty meeting OPEC quota

Indonesia has difficulty meeting OPEC quota

Dow Jones, Jakarta

The government has welcomed the Organization of Petroleum
Exporting Countries'(OPEC) decision to cut output by 900,000
barrels per day (bpd) from next month, saying the move will help
keep crude oil prices stable even if supply from Iraq increases
later this year.

Indonesia, Asia's only member of OPEC, also supports the plan
to cut output because the country is having difficulty meeting
its quotas due to declining reserves, Iin Arifin Tahkyan, a
director general at the Energy Ministry, told Dow Jones Newswires
on Thursday.

Under OPEC rules, Indonesia is allowed to produce 1.317
million bpd of crude, but its actual output is closer to 1
million bpd. The country only has enough proven crude reserves to
last another 10 years, much lower than 70 years' worth of
reserves in Venezuela, for example.

Indonesia's oil industry has been run for years by state-owned
Pertamina, but is in the process of liberalization. Many new
projects involving foreign companies have been put on hold while
the country works out new rules to govern the industry.

Moving early to avert an oversupply of oil and to prop up
prices, OPEC ministers on Wednesday decided to cut their output
ceiling by 900,000 bpd to 24.5 million bpd, effective Nov. 1.