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July 30, 2008

Indonesia to remain Opec member until year end
Indonesia has officially not yet quit the Organization of Petroleum Exporting Countries (Opec) and will still be a member for the rest of this tear, national news agency Antara quoted Energy and Mineral Resources Minister Purnomo Yusgianntoro saying.

Speaking to the press after accompanying President Susilo Bambang Yudhoyono at a meeting with Opec President Chakib Khalil here Tuesday, Yusgiantoro said that by the end of the year Indonesia would still be a member of the organization.

"This year we are still Opec member because we have paid the membership fee. It`s not expensive, only $2 million a year. But the problem is we are now a net oil importer," he said.

He said Algeria with an oil and gas production equal to Indonesia`s was still an Opec member but its population was only 35 million, far below Indonesia`s 230 million.

"The President has explained that we are now a net oil importer, so it (the decision to quit Opec does not mean that we don`t want to be close to Opec," he added.

Meanwhile, commenting on Indonesia`s plan to leave the oil cartel, Opec President Chakib Khalil said he appreciated Indonesia`s membership in the organization as the country had played a significant role in it.

"We want (Indonesia) to continue but it will be the decision of each country whether to remain a member, be non-active or quit the organisation," he said.

In his meeting with the President, Chakib had discussed issues around the increased price of oil and its future trading.

"Both of us share the view that the current oil price is too high. And that this condition does benefit oil producers and consumers alike," he said.

The oil price was affected by several factors among others the exchange rates, geo political issues especially those linked to Iran, and the introduction of bioethanol in European and American markets.

The oil price increases were not merely a problem of supply and demand, he added.

The world oil price rallied on Tuesday after a militant group attacked a Royal Dutch Shell pipeline in Nigeria, and forced the Dutch-British giant oil producer to reduce its production.

Earlier last week, Chakib had said that the oil price could decline and reach a new range of between US$70 to US$80 per barrel if the US dollar could strengthen and worries on Iran tensions could subside.

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