"It`s fine (if frozen). If we cut our production by 37 thousand bpd, it would not be good for our state revenues," Luhut said.
Jakarta (ANTARA News) - Maritime Affairs Coordinating Minister Luhut Binsar Panjaitan responded positively to the Indonesian decision to freeze its membership in the Organization of Petroleum Exporting Countries (OPEC).

Luhut said at his office here on Thursday that the decision was right, because the OPEC meeting has decided to cut its crude production, apart from condensate, by 1.2 million barrels per day (bpd).

With the OPEC decision, Indonesia has to cut its crude production by about 37 thousand bpd.

"Its fine (if frozen). If we cut our production by 37 thousand bpd, it would not be good for our state revenues," Luhut said.

Luhut, who is a former chief minister for legal, political and security minister, said Indonesias OPEC membership was once frozen earlier. It was frozen in 2008 and was effective in 2009.

But Indonesia decided to become active again as a member of OPEC early this year (2016).

"For the time being, we can let our membership be frozen. We have once frozen it and so, it would not matter," he added.

Earlier, Indonesia decided to freeze its membership during the 171st session of OPEC in Vienna, Austria, on Wednesday (Nov 30).

Energy and Mineral Resources (ESDM) Minister Ignasius Jonan said the government decided to freeze its membership of the OPEC after the organization decided to cut its crude production by 1.2 million bpd.

Indonesia was asked to reduce its production by five percent or about 37 thousand bpd.

"We still need a large amount of state receipts," he stressed.

In the 2017 state budget, the crude production was only allowed to be reduced by five percent from the 2016 production.

Thus, the amount of a cut that could be accepted by Indonesia is only 5 thousand bpd.

Jonan added that as a net crude importer, Indonesia will be affected by the crude production cut because the prices will theoretically increase.

ESDM Spokesman Sujatmiko said the temporary freezing of the Indonesian membership is the best decision for all OPEC members.

"The decision of Indonesia to freeze its membership will enable the OPEC to implement its plan to cut its production by 1.2 million bpd, while Indonesia will be free from the obligation and could produce oil based on its national interest," he added.(*)

Editor: Heru Purwanto
Copyright © ANTARA 2016