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)