Indonesia could be forced to leave the Organization of Petroleum Exporting Countries by 2005 if it becomes a net petroleum importer as expected.
So said Indonesia's Subroto, OPEC secretary general, last week at the Offshore Technology Conference in Houston.
However, Subroto added that Indonesia could delay that development by turning to alternate energy sources for much of its domestic needs. Being a net exporter of petroleum is an essential qualification for OPEC membership.
Subroto said Algeria and Qatar are other countries that could loose their OPEC affiliations in the foreseeable future.
OFFSHORE ISSUES
As onshore oil and gas reserves dwindle, offshore reserves will become more important in the mix of global energy supplies, Subroto noted.
While OPEC members have some offshore oil and gas production, Subroto said OPEC members generally have concentrated on developing onshore resources because of the relatively high cost of offshore production. Among offshore reserves being developed by OPEC members are those in the Mideast, Venezuela, and Indonesia.
Because of its need for more sophisticated technology, logistical operating constraints, and arguably heavier environmental burdens, offshore oil and gas production is more vulnerable than onshore production to such fundamental challenges as low oil and gas prices, he said. Because it is more vulnerable economically, Subroto said offshore operations around the world will benefit especially from firm, stable prices.
Subroto said other challenges to profitable onshore oil and gas development, such as environmental issues and tax policies, hurt offshore operations more. He warned that taxes proposed in the name of environmental protection should not be allowed to become disincentives to oil and gas investment, especially in offshore developments.
"The trend toward increasing taxation of oil and other energy sources has created a considerable amount of anxiety among oil producers because of the large degree of uncertainty it causes," he said. "OPEC members, as developing countries and as exporters, also are keen to ensure that taxes do not become weapons of trade."
OFFSHORE POTENTIAL
Despite widespread challenges considered especially daunting to offshore oil and gas development, Subroto said one fact remains: "Long after the onshore wells have run dry, offshore fields could continue pumping due to the youth of these fields and the fact that many offshore areas remain unexplored."
He said technology needed to economically develop offshore fields will be available, allowing continuing cost reduction and development of areas otherwise inaccessible.
Perhaps the only remaining question about the fate of offshore oil and gas development is whether economic incentives will be available soon enough to allow offshore production to adequately replace declining production onshore.
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