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OPEC Mulling New Output Ceiling

OPEC Mulling New Output CeilingOPEC Mulling New Output Ceiling

The Organization of Petroleum Exporting Countries is considering raising its official production target at its next meeting on Dec. 4 to take into account new member Indonesia, according to two OPEC delegates.

The production ceiling may be raised by 1 million barrels a day to 31 million barrels, the delegates said, asking not to be identified because the discussions are private.

A change does not imply higher production because OPEC itself said it pumped 31.57 million barrels a day in September, Bloomberg reported.

The Southeast Asian nation reentry after a break of almost seven years comes at a time when OPEC has abandoned its traditional role in supporting prices, as it seeks to defend market share against supplies from US shale drillers and other rivals.

OPEC will now have 13 members.

Indonesia suspended its membership in 2009 after becoming a net oil importer. It pumped 852,000 barrels a day in 2014 and consumed almost twice as much, according to BP Plc. Indonesian Energy Minister Sudirman Said confirmed in an interview in Doha on Monday that OPEC has accepted his country’s return to the group.

OPEC Secretary-General Abdalla El-Badri said in Doha on Monday the decision will be formally announced at the Dec. 4 meeting.

Indonesia will become a net importer of crude by 2020 as the country plans to add new refinery capacity, according to a BMI Research report in October. The country’s energy minister went to Riyadh on Monday, as Saudi Arabia and Indonesia neared an agreement to build their first jointly owned refinery in the Pacific country.

The refinery is tentatively planned to have a capacity of 300,000 barrels a day, with the contract signing expected by the end of this year.

 

Financialtribune.com