Indonesia set to rejoin Opec after break of almost seven years

JAKARTA (BLOOMBERG) - Indonesia is set to resume full membership of Opec in December after a break of almost seven years.

The Organisation of Petroleum Exporting Countries has approved Indonesia's request to rejoin, IGN Wiratmaja Puja, director-general of oil and gas at the country's Energy and Mineral Resources Ministry, said in a text message on Tuesday (Sept 8). The Asian nation suspended membership in January 2009 after becoming a net oil importer.

Indonesia's readmission is on track for approval by Opec ministers when they meet in Vienna on Dec 4, according to three people familiar with the matter who asked not to be identified because the discussions aren't public. 

Indonesia's role as an energy consumer and producer will help Opec "bridge" the divide between the two groups, and its location in Asia will deepen the organisation's ties with the region where demand growth is strongest, Energy Minister Sudirman Said said in June. The move may also be aimed at striking deals on imports from Opec members, according to consultants Petromatrix GmbH.

"The objectives seem a bit blurry," said Mr Olivier Jakob, managing director at Petromatrix, said by e-mail from Zug, Switzerland. "They left in 2008 because they were not happy with high oil prices, and are coming back because they want to have access to supplies and investments." Written Notice Indonesia received confirmation of members' support on Aug 31, one of the people said. Opec member countries also received written notice that the nation's re-admission is approved, the people said.

Energy Minister Said had said at an Opec event in June that the country would discuss potential crude supply and investments with Opec member Iran.

Opec agreed to suspend Indonesia's membership in September 2008 at the country's own request, almost half a century after the nation joined. The country pumped 852,000 barrels a day of oil in 2014 and consumed almost twice as much, according to BP Plc.

The country's re-entry would come 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.