Indonesia is open to rejoining the Organization of the Petroleum Exporting Countries as long as it is not forced to curb its own crude oil production, the nation’s energy and mineral resources minister said on Tuesday (25/07).
“We would have to have a concession for not following cuts from time to time,” the minister, Ignasius Jonan, said in an interview in Houston, where he is meeting with major oil producers.
Indonesia said two months ago that it was considering rejoining OPEC after it had left and rejoined several times over the years. The country, which pumps about 800,000 barrels of crude per day, would become the group’s 15th member.
The membership talks come as OPEC members grapple with an oversupply of crude around the globe, brought on in part by rising production from US shale regions.
Indonesia imports roughly double the amount of crude that it produces, so it is happy with the current oil price, near $50 per barrel, Jonan said. When asked if that point of view would cause tension in an OPEC meeting, Jonan said it would “lead to more dialogue.”
Jonan, who was appointed energy minister last year, is meeting with Chevron Corp, Exxon Mobil, ConocoPhillips and others in Houston this week, a stop on a multi-nation tour to bolster interest in investing in Indonesia.
“This is all part of an effort to have a more open dialogue with our business partners,” Jonan said.
The minister said he had a long discussion with Chevron about the company’s operations in the Permian Basin, the largest US oilfield.
“The production capacity keeps growing. That’s significant,” he said. “If shale oil production keeps going up, that means US imports of crude oil is going down.”
Jonan also addressed a permit dispute with Freeport-McMoRan, the world’s largest publicly traded copper miner, over operations in Indonesia.
To bring an end to the long-running negotiations, Freeport would need to build a smelter in Indonesia and divest 51 percent of its holdings in the country in order to renew its license, Jonan said, calling the terms non-negotiable.
“There is no option,” he said. “It they don’t, it’s OK, but they cannot export.”
For its part, Freeport said on Tuesday as it reported quarterly results that it was making progress in discussions with the Indonesian government.