By MarEx 2015-10-15 12:31:30
The Organization of the Petroleum Exporting Countries (OPEC) has notified Indonesia that it plans to accept the request to reactivate its membership at the December meeting. Indonesia would increase OPEC’s output by three percent. In July, OPEC produced about 33 million barrels per day, which is well above its target of 30 million bpd.
Indonesia will be the fourth-smallest producer in OPEC just ahead of Libya, Ecuador and Qatar. In 2014, it produced 790,000 bpd.
OPEC was founded in 1960 and is currently made up of 12 members. While OPEC allows associate membership, currently its members are full members and Indonesia is expected to become a full member as well.
Indonesia was the only Asian country that belongs to OPEC member and was a member for 50 years before it left in 2009. Their rising domestic demand and falling production turned the country into a net oil importer.
It does not come as a suprise to anaylsts that Indonesia has returned to OPEC after six years in what many called a suspension from the group . Ecuador which rejoined OPEC back in 2007 after being suspended, so the precedent had been set.
By 2004, Indonesia left OPEC because of growing internal demand and declining crude oil and condensate production in mature fields. After years of limited investment the country became a net importer. It plans to upgrade and expand all existing refineries by 2025.