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Indonesia interested in OPEC membership again, but needs to cut its oil imports first

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Indonesia interested in OPEC membership again, but needs to cut its oil imports first

Abu Dhabi — Net oil importer Indonesia could reactivate its OPEC membership if it can successfully raise its crude oil production and reduce consumption by boosting the amount of biofuels used in its transportation sector, an official said Monday.

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"If we can increase our production, we are more than happy to rejoin," secretary general of Indonesia's National Energy Council, Ir Saleh Abdurrahman, said at the ADIPEC oil conference in Abu Dhabi. "I have attended many OPEC meetings before, and I would like to come back, but wait until our production is increasing."

He told S&P Global Platts on the sidelines of the conference that Indonesia, which suspended its OPEC membership in late 2016, was currently pumping about 800,000 b/d, while importing 1.5 million-1.6 million b/d.

Indonesia's state-owned oil company Pertamina earlier this year began taking over operations at the country's oil fields from foreign companies, under a government plan to consume more of its crude domestically and reduce its imports, as the rupiah depreciates against the dollar.

To further cut its import bill, Indonesia on September 1 began requiring all diesel fuel sold domestically to contain 20% biodiesel.

The country also has plans to boost the amount of ethanol blended with gasoline, though it has not blended much to date.

"We are going with biodiesel now," Abdurrahman said. "That can reduce our import consumption. I think we are on massive way of introducing the biodiesel and bioethanol to our transport sector."

OPEC bylaws require members to be net exporters of crude. Indonesia first joined the organization in 1962 as its only Asian member outside the Middle East, but then suspended its membership in 2009 after its dwindling crude production made it a net importer.

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The country briefly rejoined OPEC in late 2015, saying that belonging to the group would help it sign bilateral deals to boost its output and supply its domestic fuel market, but then suspended its membership again in 2016 when it refused to participate in production cuts OPEC instituted to help prop up oil prices.

"We just suspended our membership," Abdurrahman said, adding that many of Indonesia's ties to OPEC members remain intact. "We are a big family, OPEC."

--Herman Wang, herman.wang@spglobal.com

--Daniel Colover, daniel.colover@spglobal.com

--Rosemary Griffin, rosemary.griffin@spglobal.com

--Miriam Malek, miriam.malek@spglobal.com

--Edited by Jonathan Dart, newsdesk@spglobal.com