Sunday, June 8, 2008

Indonesia no longer OPEC member

Possible reasons for Indonesia withdrawal from its OPEC membership:
  1. Indonesia is dissatisfied with OPEC’s reluctance to increase the world oil supply despite the current oil price surge. This hurt Indonesia even more as it is already a net oil importer (Indonesia is the only net oil importing OPEC member)
  2. The country’s oil sector is flagging. No discovery of new oil rigs has been made lately. The exploration is merely heavily concentrated in Northern Sumatera

Possibilities of less oil exploration activities:

  1. Lack of technology & local expertise
  2. High level of bureaucracies, weak legal control over corruption etc. It is still possible to expedite the documentation & legal process so as to avoid excessive red tapes. How? Through corruption!!

However, the officials in Indonesia do not reject the possibility of re-joining OPEC shall there is new oil rigs discovery.

1 comment:

Tats! said...

is OPEC that easy to just come in and out?

I mean, there must be some consequences of quitting OPEC, for e.g. mistrust from other countries and possible worsening of foreign affairs or relations...