Indonesia rejoins OPEc to build energy resilience

Indonesia rejoins OPEc to build energy resilience

Widhyawan Prawiraatmadja. (ANTARA/Wahyu Putro A.)

The reactivation of the Indonesian membership of the OPEC was marked by its participation in the 168th session."
Jakarta (ANTARA News) - Indonesia, which suspended its membership of the Organization of Petroleum Exporting Countries (OPEC) at the end of 2008, has since last month rejoined the organization to build its energy resilience.

Indonesia officially became an active member of the OPEC again when it attended its 168th session in Vienna, Austria, on November 4, 2015.

"The reactivation of the Indonesian membership of the OPEC was marked by its participation in the 168th session," Indonesias Governor for OPEC Widhyawan Prawiraatmadja stated on Friday (Dec. 4).

In the current transition from using fossil fuels to renewable sources of energy, Indonesia has to expand its network and engage in bilateral and multilateral cooperation to build its energy resilience.

Indonesia, which had become an OPEC member in 1962 and had pulled out of the world oil organization in 2008 since it was unable to meet its production quota and became an oil importer country in 2008, rejoined the OPEC not because it wants to become an oil exporter but as it is interested in expanding its global network.

"Now, Indonesia is in the transition process which is dominated by a shift from fossil energy to new and renewable energy that is sustainable in the future," Widhyawan said.

Widhyawan, who took up the post of Indonesia governor for OPEC for two years (2015-2017), said as a big country with high and increasing energy needs, Indonesia must assure its energy resilience.

He said efforts to increase energy resilience are being made by developing the energy sector in the country, including making preparing licenses and investment facilities, encouraging explorations and improving governance.

"These measures are being strengthened through the states active role in building external cooperation, both in terms of multilateral and bilateral cooperation," noted Widhyawan.

Indonesia has also become a member of the International Energy Agency (IEA) since November 17, 2015.

Widhyawan said Indonesia will derive two gains from its presence in the two global energy organizations. "Indonesia will become a part of the decision making, not a passive recipient of the decision," he noted.

Apart from that, it will also expand its international energy networking which will widen the access for accelerating technological transfer, seizure of business opportunities and benefit of oil supplies and products that are mutually beneficial. It will also open access to research and development and opportunities for Indonesias best sons and daughters to take active part in global energy organizations.

With Indonesia rejoining the organization, the country is now again part of the community which plays a role in deciding global energy supplies, particularly from oil and gas.

"Being a part of it all, we will be able to network and maintain close relations (with them), which will give us access to their thinking process in the future. We will then be able to use such knowledge as the basis to rearrange our energy strategies and policies," Minister of Energy and Mineral Resources Sudirman Said meanwhile stated on Monday (Dec 7).

The energy minister who also attended the OPEC's 168th session in Vienna, has reported the reactivation of Indonesias membership of the Organization of Petroleum Exporting Countries (OPEC) to President Joko Widodo (Jokowi) on Monday (Dec 7).

"Today, I met the President to report the outcome of the OPEC session," the minister said at the premises of the Presidential Palace.

Among other developments, one was the OPEC session accepting the formal reactivation of Indonesias membership of the worlds oil cartel, he said. Another result of the session was the inauguration of Widyawan Prawiraatmaja as the OPEC governor for Indonesia, he added.

In the near future, Indonesia will also send the names of its national representatives who will work for the OPEC Secretariat in Vienna, Australia, he said.

The move has been showing positive results, and also resulting in direct purchase of oil from producing countries, he said.

Citing an example, he said two weeks ago, the state oil and gas company Pertamina and Saudi Aramco signed an agreement to build an oil refinery. This means that there will be crude oil supplies to Indonesia.

President Director of state-owned oil and gas company Pertamina Dwi Sutjipto noted that the resumption of Indonesias membership of the OPEC will increase efficiency in oil purchase as the country could directly buy oil from other members of the organization.

"The OPEC serves as a platform for Indonesia to directly approach oil-producing members, so that the country can make direct deals. Such deals can be more efficient as they will be in the form of government-to-government, business-to-business," he explained.

He said the reactivation of its membership would not mean that Indonesia was trying to become an oil-exporting country but was intending to build its network.

"In OPEC, the people are not only interested in selling but also in buying," he noted.

Dwi said Pertamina would capitalize on Indonesias return to the OPEC by establishing broad relations and making direct oil purchases.

The OPEC is an international intergovernmental organization aimed at coordinating and streamlining oil policies of its member countries. It aims to maintain stability in the global oil market through efficient and regular oil supplies. It includes deciding the oil production quota of its members.