OPEC may raise output limit in Beirut
The Jakarta Post, Jakarta
OPEC may raise its oil output limit by more than 2 million barrels per day (bpd) when the group meets in Beirut next month as part of efforts to help bring down soaring oil prices, OPEC's president Purnomo Yusgiantoro said on Thursday.
The Organization of Petroleum Exporting Countries, which pumps a third of the world's oil, may boost its production limit to bring it in line with actual output, he said. OPEC members, excluding Iraq, are pumping about 2.3 million bpd above the target of 23.5 million bpd, Purnomo said.
An "option is to increase the quota significantly so it will bring a significant psychological impact to lower (oil) prices," Purnomo said in Jakarta as quoted by Bloomberg.
OPEC members have not reached an agreement to raise the production limit, he said.
Oil prices have recently surged to a 21-year high of more than US$41 per barrel. This has raised concern that inflation may accelerate and global economic growth will slow.
OPEC members will gather for an official meeting in Beirut on June 3.
Oil prices have risen on concern supplies will not be sufficient to restore low gasoline inventories in the U.S. before demand rises in the peak driving season.
Meanwhile, Indonesia's Oil and Gas Regulatory Body (BP Migas) expects the country to have an additional crude oil production of 100,000 bpd this year as a number of new fields will start production.
However, the additional production would not be sufficient to lift the country's oil production to meet this year's target.
Rachmat Sudibyo, the head of BP Migas said the fresh output will come from KE-40 field operated by South Korean Kodeco, TEL+TAF Kaji and Semoga by Exspan, Pungut field by Caltex Pacific Indonesia and Sukowati field by ExxonMobil Oil Indonesia.
"Oil production has been declining naturally. The additional production only offsets the decline but is not sufficient to lift up output," Rachmat told reporters after a hearing with Commission VIII of the House of Representatives.
Indonesia's oil production has been declining in the past few years because of aging oil wells, while new investments to boost production remains scant due to various uncertainties.
Indonesia has been producing crude below the OPEC quota of 1.27 million bpd. Oil output excluding condensate is between 950,000 bpd to 970,000 bpd.
The 2004 state budget set the oil production target at 1.15 million bpd including codensat.
Rachmat said an additional output of between 190,000 bpd to 200,000 was expected next year.
The low crude output has forced the country to import more crude oil and oil-based products for domestic consumption. The country has become a net oil importer since March.
Importing more crude oil has strained the state budget amid the current high oil prices.