Indonesia seeks quota-based cutbacks

Jakarta: Indonesia, the second-smallest member of Opec, wants the group to allocate a production cut based on its formal quotas, not on actual output levels, as most members seem to prefer, its oil minister said yesterday.

Although Indonesia has limited policy power within the group as it pumps about a third less than its formal quota, its stance highlights the difficulty facing Opec when it meets on Thursday to discuss how to share a 1 million barrel per day (bpd) cut.

"The cuts should come from the quota because Indonesia has not fulfilled its quota. The cuts should not be from [actual] production," Indonesian Mines and Energy Minister Purn-omo Yusgiantoro told reporters. "We don't want to cut our production."

Opec's first plan to cut production since April 2004 was mooted more than a week ago, but ministers have been debating whether to cut from actual output of roughly 27.5 million bpd or from the group's notional 28 million-bpd ceiling.

Most member producers have been pumping at - if not well beyond - their individual Opec quotas. But Indonesia and Venezuela have fallen well below theirs and Iran has had difficulty matching its limit, making them reluctant to cede market share to their peers.

Opec President Edmund Daukoru told Reuters at the weekend there was broad agreement the cut should be made from the average actual output level over the past 12 months, which is close to Opec's existing production ceiling of 28 million bpd.

An extraordinary meeting of Opec is to be held in Doha on Thursday to discuss a cut in production to check the fall in the price of crude oil.

Data from the ministry shows Indonesia's recent average oil output stood at around 945,000 barrels per day, a level below the government's target of 1.03 million barrels per day for this year.

Indonesia's Opec production quota is 1.450 million barrels per day.