Indonesia says to become associate OPEC member at Paris meet, alongside China and Mexico

[cirr]

Indonesia says to become associate OPEC member at Paris meet, alongside China and Mexico

By Reuters | 8 Oct, 2015, 11.15AM IST

JAKARTA: Indonesia will become an associate member of OPEC at a meeting in Paris in November, alongside China and Mexico, Indonesia's energy minister said on Thursday.

Energy minister Sudirman Said also said Indonesia would become a member of the International Energy Agency (IEA).

"Our engagement with OPEC, IEA and others is important," Said told reporters, adding that the role would mean Indonesia would be more involved in international diplomacy and "form a bridge between oil ..

Read more at:
Indonesia says to become associate OPEC member at Paris meet, alongside China and Mexico - The Economic Times

 

[Shotgunner51]

China in OPEC? What's the story and implications?

 

[HongWu002]

China is dumping dollar assets and OPEC sees the end of dollar hegemony.

 

[RazorMC]

China is a huge importer of oil, it's entry as an associate member of OPEC is natural.

 

[Shotgunner51]

China is a huge importer of oil, it's entry as an associate member of OPEC is natural.

Yes bro, China is a huge importer of oil, probably largest (about same as US), average import is around 7m b/d (million barrels per day) at the moment. China's SPR (Strategic Petroleum Reserves) and MCR (Mandated Commercial Reserves) combined is estimated at around 700 million to 1 billion barrels.

China's Outsize Crude Imports Throw Traders For Loop

However OPEC is for oil exporters, how come China be an associate member?

OPEC : Member Countries

On topic, Indonesia is an ex-member of OPEC, and Mexico is also a major oil exporter.

China is dumping dollar assets and OPEC sees the end of dollar hegemony.

Crude oil isn't expensive. At current price around US$50 per barrel, whole of China's petroleum reserves (say 1 billion barrels) combined worth less than US$50 billion, just a little more than 1% of China's Forex Reserves.

To unload US treasury bills, China better switch more FX reserves to Sovereign Welfare Funds (SWF) which is by now over US$1.5 trillion in asset value.

 

[RazorMC]

Yes bro, China is a huge importer of oil, probably largest (about same as US), average import is around 7m b/d (million barrels per day) at the moment. China's SPR (Strategic Petroleum Reserves) and MCR (Mandated Commercial Reserves) combined is estimated at around 700 million to 1 billion barrels.

China's Outsize Crude Imports Throw Traders For Loop

However OPEC is for oil exporters, how come China be an associate member?

OPEC : Member Countries

On topic, Indonesia is an ex-member of OPEC, and Mexico is also a major oil exporter.




Crude oil isn't expensive. At current price around US$50 per barrel, whole of China's petroleum reserves (say 1 billion barrels) combined worth less than US$50 billion, just a little more than 1% of China's Forex Reserves.

To unload US treasury bills, China better switch more FX reserves to Sovereign Welfare Funds (SWF) which is by now over US$1.5 trillion in asset value.

China may not be a net oil-exporter, but its huge trading volume makes it an important partner for OPEC. This may be just one reason though. Another factor is China's vast shale-gas reserves that have the potential to make it into a net energy-exporter.
OPEC may see greater benefit with China onboard.

 

[Shotgunner51]

China may not be a net oil-exporter, but its huge trading volume makes it an important partner for OPEC. This may be just one reason though. Another factor is China's vast shale-gas reserves that have the potential to make it into a net energy-exporter.
OPEC may see greater benefit with China onboard.

Thanks bro for the analysis, simple and straight-forward. Well hope China's membership in OPEC can help everyone including China & ally Pakistan!

 

[Aepsilons]

Thanks bro for the analysis, simple and straight-forward. Well hope China's membership in OPEC can help everyone including China & ally Pakistan!

Bro, China is actually a significant oil exporter:

China Exports of Crude Oil and Petroleum Products by Destination

China to crank up oil product exports, add to supply glut| Reuters

China may not be a net oil-exporter, but its huge trading volume makes it an important partner for OPEC. This may be just one reason though. Another factor is China's vast shale-gas reserves that have the potential to make it into a net energy-exporter.
OPEC may see greater benefit with China onboard.

China is actually a major oil and gas exporter, she has considerable reserves and has just recently begun to increase production capacity. So, that is understandable that she is part of OPEC. Plus, she is also the net largest consumer of oil and gas in the world. The very fact that China Is --- is what makes OPEC pertinent. The fact that China consumes OPEC resources -- is the reason why China should be in OPEC as an associate.

 

[Indos]

Bro, China is actually a significant oil exporter:

China Exports of Crude Oil and Petroleum Products by Destination

China to crank up oil product exports, add to supply glut| Reuters



China is actually a major oil and gas exporter, she has considerable reserves and has just recently begun to increase production capacity. So, that is understandable that she is part of OPEC. Plus, she is also the net largest consumer of oil and gas in the world. The very fact that China Is --- is what makes OPEC pertinent. The fact that China consumes OPEC resources -- is the reason why China should be in OPEC as an associate.

Something strange, many Muslim area in the world has lot of oil, including Xinjiang region


http://www.nytimes.com/2014/12/21/w...on-rich-in-oil-coal-and-also-strife.html?_r=0

 

[Aepsilons]

Something strange, many Muslim area in the world has lot of oil, including Xinjiang region


http://www.nytimes.com/2014/12/21/w...on-rich-in-oil-coal-and-also-strife.html?_r=0

Yes, indeed. Xinjiang has immense reserves of natural gas and petroleum. Not just Xinjiang, but also Tibet.

 

[RazorMC]

Bro, China is actually a significant oil exporter:

China Exports of Crude Oil and Petroleum Products by Destination

China to crank up oil product exports, add to supply glut| Reuters



China is actually a major oil and gas exporter, she has considerable reserves and has just recently begun to increase production capacity. So, that is understandable that she is part of OPEC. Plus, she is also the net largest consumer of oil and gas in the world. The very fact that China Is --- is what makes OPEC pertinent. The fact that China consumes OPEC resources -- is the reason why China should be in OPEC as an associate.

Yes China exports, but it's still a net-importer of petroleum goods.

This is also what I said, it's oil trade makes it crucial for China to be onboard with OPEC. In coming years, reliance on GCC is dropping while China and the US are emerging are major exporters. Having atleast one of them makes OPEC relevant in the future.

 

[Aepsilons]

Yes China exports, but it's still a net-importer of petroleum goods.

This is also what I said, it's oil trade makes it crucial for China to be onboard with OPEC. In coming years, reliance on GCC is dropping while China and the US are emerging are major exporters. Having atleast one of them makes OPEC relevant in the future.

Yes, that is absolutely true. Net-wise, she is still an importer. China's gargantuan 1.4 Billion population --- and gargantuan industrial sector is the reason why her addiction to petro / gas will only increase. China's state owned energy corps have to subsidize this increased reliance on foreign exports, but increasing domestic production. This is why China's building of nuclear reactors is imperative on the domestic aperture due to the shear size of demand. China's turn to nuclear power is utter necessity. Remember that the balance of trade between China and OPEC members of GCC --- has a GCC favored balance of trade. This is the only area where China is having net on net on negative balance of trade --- anywhehre in the world.

And this dependency is costing China north of $300 Billion a year. So you can understand its strategic implication....

 

[Shotgunner51]

Bro, China is actually a significant oil exporter:

China Exports of Crude Oil and Petroleum Products by Destination

China to crank up oil product exports, add to supply glut| Reuters



China is actually a major oil and gas exporter, she has considerable reserves and has just recently begun to increase production capacity. So, that is understandable that she is part of OPEC. Plus, she is also the net largest consumer of oil and gas in the world. The very fact that China Is --- is what makes OPEC pertinent. The fact that China consumes OPEC resources -- is the reason why China should be in OPEC as an associate.

Thanks bro but the link is about US exports of oil to China.

It says "Notes: Crude oil exports are restricted to: (1) crude oil derived from fields under the State waters of Alaska's Cook Inlet; (2) Alaskan North Slope crude oil; (3) certain domestically produced crude oil destined for Canada; (4) shipments to U.S. territories; and (5) California crude oil to Pacific Rim countries. Totals may not equal sum of components due to independent rounding."

China Exports of Crude Oil and Petroleum Products by Destination

 

[Aepsilons]

Thanks bro but the link is about US exports of oil to China.

It says "Notes: Crude oil exports are restricted to: (1) crude oil derived from fields under the State waters of Alaska's Cook Inlet; (2) Alaskan North Slope crude oil; (3) certain domestically produced crude oil destined for Canada; (4) shipments to U.S. territories; and (5) California crude oil to Pacific Rim countries. Totals may not equal sum of components due to independent rounding."

China Exports of Crude Oil and Petroleum Products by Destination

Ah you're right , buddy. Wrong link, apologies for that.

 

[Shotgunner51]

Yes, that is absolutely true. Net-wise, she is still an importer. China's gargantuan 1.4 Billion population --- and gargantuan industrial sector is the reason why her addiction to petro / gas will only increase. China's state owned energy corps have to subsidize this increased reliance on foreign exports, but increasing domestic production. This is why China's building of nuclear reactors is imperative on the domestic aperture due to the shear size of demand. China's turn to nuclear power is utter necessity. Remember that the balance of trade between China and OPEC members of GCC --- has a GCC favored balance of trade. This is the only area where China is having net on net on negative balance of trade --- anywhehre in the world.

And this dependency is costing China north of $300 Billion a year. So you can understand its strategic implication....

@RazorMC is right, China is a net importer, now running around 7 million barrels/day, about same as US.

According to this speed at $46 per barrel, annual imports is like 2.5 billion barrels, worth less than $120 billion, not a big problem for China.

Well as China increase domestic oil production, nuclear energy, new energy, shale gas, etc., these would be mostly used domestically. That might reduce imports of energy from OPEC, Russia, however not likely to become a major exporter anytime soon.