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EIA reviews Indonesia's OPEC bid

Indonesia, which left OPEC in 2009, may be looking for direct sources of oil and gas trade.

By
Daniel J. Graeber
U.S. Energy Information Administration expects Indonesia will still import oil even after it rejoins OPEC. File photo by project1photography/UPI
U.S. Energy Information Administration expects Indonesia will still import oil even after it rejoins OPEC. File photo by project1photography/UPI

WASHINGTON, Oct. 16 (UPI) -- Despite its bid to reactivate its membership in OPEC, Indonesia will likely need to import more oil to meet its domestic demand, a U.S. analysis said.

In September, Indonesia submitted a request to reactivate its membership in the Organization of Petroleum Exporting Countries, which it left in 2009 because it was no longer a net exporter. OPEC in a response statement said its members would "welcome [Indonesia's] return."

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Analysis from the U.S. Energy Information Administration said geographical characteristics and a lack of refining capacity means the Indonesian economy will still need to import oil products, particularly gasoline.

According to EIA, Indonesia produced about 790,000 barrels of crude oil and condensates, an ultra-light form of oil. That puts it above Ecuador and Libya, the two lowest producing members of OPEC. Natural gas production in Indonesia increased by more than 20 percent in the decade ending in 2012. The country exports about half its natural gas and is one of the largest exporters of LNG in the world.

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The Indonesian government estimated that, as of Jan. 1, it held 5.2 billion barrels of oil equivalent, about half of which existed as crude oil.

Jakarta said it needs to work with members of OPEC in order to get a direct source of crude oil and natural gas. EIA said most of the imports come through third parties. Indonesian Energy Minister Sudirman Said spent this week in Iran, which said it supports Indonesia's bid to rejoin OPEC.

Before arriving in Tehran, the minister said he would use the opportunity to discuss "any investment information" with Middle East leaders, including those governing members of OPEC.

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A consortium of oil and gas contracts last week, meanwhile, called on the government to adopt a "one-stop service" to facilitate the permit process for oil and gas exploration.

OPEC is expected to endorse Indonesia's membership in December.

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