The Organization of the Petroleum Exporting Countries (OPEC) is set to welcome Indonesia back into the fold, after the country dropped out in 2009 when it became a net oil importer, the Vienna-based cartel announced Tuesday.
Indonesia had applied to become an active member again and was set to be approved as the group’s 13th member at OPEC’s next ministerial meeting on December 4, OPEC said in a statement.
“Indonesia has contributed much to OPEC’s history. We welcome its return to the organization,” it said.
The country was South-east Asia’s only member of OPEC, but left at the beginning of 2009, after it stopped being a net exporter of oil.
This situation has not changed, as imports of refined petroleum products outweigh crude oil exports. It is, however, a net exporter of natural gas.
The country is expected to pump 850,000 barrels of oil per day on average this year, OPEC said in its latest market report last month.
This would make the country one of the smaller OPEC producers. Only Ecuador, Libya and Qatar currently have a lower output than Indonesia’s estimated daily average.
The expansion of OPEC comes at a time when the group has lost its ability to significantly influence prices through lowering or raising its output, as this role is now played by the United States, said Ehsan Ul-Haq at the British energy consultancy KBC.
“But if they have one more member, it gives them more influence,” he said, pointing out that Indonesia is one of the main oil countries in the eastern part of Asia, despite its relatively small output.
Indonesia was likely seeking OPEC membership to build stronger ties with its members and to profit from its analysis and research, rather than because of its market influence, Ul-Haq said.
OPEC members have been suffering from low oil prices, which hurt government incomes in the Middle Eastern, African and Latin American countries that make up the organization.
Positive economic signals from Europe pushed Brent oil from the North Sea up 3.99 per cent to 49.53 dollars per barrel Tuesday, while the US benchmark brand West Texas Intermediate stood nearly unchanged at 46.02 dollars.