Oil exporters spared from flagging dollar

Oil exporters spared from flagging dollar

KUALA LUMPUR (AFP): Global oil earnings, transacted in U.S. dollars, may have been dented by the flagging greenback but long- term adverse effects were unlikely, oil experts said yesterday.

"Depreciation (of revenue) is a concern for all producers but the depreciation of the dollar, against the yen, is not sustainable," Subroto, an Indonesian oil expert, told reporters at an international oil conference here.

Subroto, a former secretary-general of the Organization of Petroleum Exporting Countries (OPEC), said oil traders were generally expecting the dollar to rebound soon against the strong yen.

"The yen is too expensive and dollar is too cheap. There will be correcting factors," Subroto said at the opening of a four-day Asia Pacific Oil and Gas conference.

Azizan Zainul Abidin, chairman of Malaysia's national oil company Petronas, said traders were also unconcerned about long- term effects from the currency turmoil as loans had also become cheaper to service.

"Our borrowings are also in U.S. dollars so that should not be such a burden," said Azizan.

Oil producers could resort to alternative currencies for payment if the dollar fell any further, Subroto said.

He said sellers could ask to be paid with a wider basket of currencies instead of just U.S. dollars, although the greenback would continue to be used as a unit of account.

"But at the time being, there is no action" to this effect, he said.