RI confident of meeting new oil quota

JAKARTA (JP): Minister of Energy and Mineral Resources Purnomo Yusgiantoro expressed optimism that Indonesia would be able to boost crude oil production by 41,000 barrels per day (bpd) to meet the new oil production quota.

Purnomo said that Indonesia, along with the other members of the Organization of Petroleum Exporting Countries (OPEC), would raise its oil output by Oct. 1.

"Not only Indonesia, other OPEC members also need time to prepare their oil fields," he told reporters after delivering the opening address at a seminar on power held by the Indonesian Electrical Power Society.

Purnomo said that state oil and gas company Pertamina would be in charge of appointing oil contractors capable of raising their oil output.

The new quota will raise the country's production to 1.5 million bpd.

At present, PT Caltex Pacific Indonesia is the country's largest oil producer, accounting for some 80 percent of Indonesia's total oil production.

Earlier this year, Indonesia had been called to raise oil output by 37,000 bpd as part of OPEC's policy of raising output by 500,000 bpd.

However, Pertamina has said that it had difficulties meeting the additional 37,000 bpd.

Most oil fields in Indonesia are marginal ones and are already pumping oil at full capacity, the company said.

Purnomo admitted that new investment was needed to raise oil production so as to meet the new quota.

As it gets increasingly difficult to pump oil in marginal oil fields, companies must invest in new technology to extract remaining reserves.

"We can't just open our nozzles and let the oil flow," he added.

OPEC announced on Sunday that it would raise its oil output by 800,000 bpd to help lower soaring oil prices.

The decision came after the price of oil reached a 10-year record high of US$35 a barrel in the United States.

Developed oil importing countries have pressured OPEC to raise oil output on the grounds that high oil prices would trigger inflation, thus hampering economic growth.

The additional 800,000 bpd makes up around three percent of OPEC's total oil production of 26.2 million bpd.

Purnomo took the same view, saying that if oil prices were too high, it might rebound on Indonesia's economy.

"It would disturb economic growth and in the end would affect foreign investment here," he explained.

OPEC's policy, he said, called for a review of oil prices if they fall below $22 or over $28 a barrel over a period of 20 consecutive days.

However, OPEC president and Venezuelan Oil Minister Ali Rodriguez has warned that the production capacities of OPEC members were reaching their limits.(bkm)