Indonesia opposes OPEC output increase above 2m bpd

Indonesia opposes OPEC output increase above 2m bpd

JAKARTA (JP): Indonesia will not support any proposal to
increase oil output by more than two million barrels per day at
the impending ministerial meeting of the Organization of
Petroleum Exporting Countries (OPEC), Minister of Mines and
Energy Susilo Bambang Yudhoyono said.

Bambang said Indonesia will only accept an increase in oil
output of one million barrels per day.

"We will support OPEC increasing the oil quota by, say, one
million barrels, but not two or three million barrels per day,"
Bambang said after a cabinet meeting.

Bambang made the statement as OPEC ministers were preparing
for a crucial meeting in Vienna on Monday amid pressures from
several consumer countries, especially the United States, to
raise oil output to curb the rise in prices.

The Paris-based International Energy Agency, which was formed
to protect the interest of oil consumers, earlier said OPEC
needed to raise oil output by 2.3 million barrels per day to meet
demand and, restore refinery profitability and replenish depleted
stock.

Bambang said too large an increase in production would put
considerable pressure on the oil price and would deal a strong
blow to Indonesia's economy, which is highly dependent on oil
earnings to recover from the economic crisis.

"We expect an oil price between US$22 and $26 per barrel. That
is safe for our budget," he said.

In Algiers, visiting Foreign Minister Alwi Shihab was quoted
on Tuesday by AFP as saying Indonesia was aiming for an average
price of $25 for a barrel of crude oil.

The government revised upward the oil price assumption to $20
per barrel from $18 for the April-December 2000 budget, because
of the steady increase in price over the past several months.

Oil prices have been rising since OPEC and non-OPEC countries
agreed last year to a global cut in production. A measure that
pushed oil prices to nine-year highs above $30 per barrel from
around $10 per barrel last year.

U.S. Energy Secretary Bill Richardson is currently on a global
tour to pressure OPEC and non-OPEC countries to raise output to
stop the increase in oil prices.

Leading OPEC members, including Saudi Arabia and Venezuela,
have expressed support for an increase in oil output but they did
not reveal the timeframe or the amount of the increases.

OPEC secretary general Rilwanu Lukman has said production
should be raised to levels that would reduce oil prices to $24
per barrel, but he didn't suggest how much extra production might
be needed to achieve that. (jsk/prb)