Purnomo calms fears over oil output disruption

Purnomo calms fears over oil output disruption

The Jakarta Post, Jakarta

The Organization of Petroleum Exporting Countries (OPEC)
doubts that the attack on the Saudi oil city of Khobar will
disrupt Saudi Arabia's plan to increase output.

"I think Saudi Arabia will still be able to raise output
because it has an unused portion of capacity, since current
production is only around 85 percent of its capacity," OPEC
president Purnomo Yusgiantoro said on Monday.

Purnomo, who is also Indonesia's minister of energy and
mineral resources, said the cartel was concerned about the attack
on Saudi Arabia because the country had been expected to increase
output to help stabilize soaring oil prices.

Suspected Al-Qaeda militants attacked the oil city of Khobar
on Sunday and killed 22 civilians, including Westerners.

The attackers also held hostages expatriates. Some of them
died but others were freed on Sunday by Saudi forces.

The attack came less than a week before a major OPEC meeting
in Beirut on June 3 to discuss the possibility of increasing
output to cool surging oil prices.

Saudi Arabia, the world's largest oil exporter, is the only
OPEC member with the capability to increase output.

OPEC normally produces 23.5 million barrels a day (bpd), but
has already pumped up production to around 25 to 26 bpd.

Purnomo said earlier the cartel could increase the output
quota by two million to 2.3 million bpd. Saudi Arabia has
proposed a higher increase of 2.3 million to 2.5 million bpd.

Oil prices have risen to a 21-year high of around $41 a barrel
on concerns of tight global supply due to low gasoline stocks in
the U.S. ahead of the summer holidays and attacks on oil
infrastructure in the Middle East.

However, oil prices retreated to below $40 a barrel last week
in respond to the proposed increase in OPEC oil output.

Purnomo said the meeting in Beirut would also discuss the
possibility of changing the current target price of $22 to $28 a
barrel.

"OPEC's decision must be unanimous, because we do not make
decisions based on the opinion of one member country," Purnomo
said.