Oil price drop may trigger further cuts
Oil price drop may trigger further cuts
KUWAIT (Agencies): Kuwait and Qatar said yesterday OPEC could decide on further oil production cuts if world prices fell further.
Oil Minister Sheikh Saud Nasser al-Sabah said "reviewing additional cuts by OPEC states (would be required) if we find that oil prices are still low," the official Kuwait News Agency (KUNA) reported.
Organization of Petroleum Exporting Countries (OPEC) ministers are due to meet on June 24 in Vienna.
Kuwait agreed on a 125,000 barrel per day (bpd) cut as of April 1 as part of OPEC's accord at an extraordinary meeting in Vienna in March to cut supplies in an effort to rescue world oil prices.
Kuwait has an OPEC quota of 2.19 million bpd.
Sheikh Saud said world oil markets were passing through a "critical time" but expressed "optimism if OPEC members abided by the cut which was agreed upon", predicting a "clear change" in prices in the coming three months, KUNA added.
Brent crude futures for June delivery closed 28 cents lower on Friday at $14.36 a barrel, nearly 20 percent below year-on-year levels and still within sight of nine-year lows.
Qatari Energy and Industry Minister Abdullah bin Hamad al- Attiyah said yesterday he was not happy with the current level of world oil prices, adding that "at least $18 a barrel" for North Sea Brent crude would be satisfactory.
He confirmed that Qatar has already implemented its promised 30,000 barrels a day output cut in accordance with an OPEC agreement reached last month to boost prices.
Attiyah did not say how much Qatar might be willing to cut under a new agreement. According to industry estimates, Qatar is OPEC's largest overproducer in percentage terms. The Paris-based International Energy Agency put its March production at 710,000 bpd, well above its OPEC quota of 413,000 bpd.
Late Saturday, Oil Minister Erwin Arrieta of Venezuela -- widely referred to as OPEC's largest overproducer -- said his country might accept further oil production cuts if it becomes apparent that they are necessary to stabilize the market. The IEA put Venezuela's March production at 3.37 million bpd, 30% above its 2.583 million bpd quota.
OPEC's basket of seven crude oils, which it uses to gauge the market, was priced at $13.12 a barrel Thursday, down from $12.61 on Wednesday. When OPEC met at the end of November and increased its production ceiling by 10%, the basket averaged $18.81.
Later, in an address to the Oil, Gas and Petrochemicals in Qatar conference, Attiyah said Qatar's total oil capacity is expected to exceed 800,000 bpd by the year 2000 as a result of ongoing onshore and offshore development efforts.
Attiyah said that Phase 1 development of Qatar's giant North Field gas field has already provided enough gas to meet domestic consumption demands for fuel and feedstock for local industries.
"This has allowed us to expand our petrochemical and fertilizer plants and to initiate new gas-based projects," the minister said. He noted that the Qatar Fertilizer Co. (Qafco) III expansion project, which increased ammonia and urea production enabled the company to become the largest producer of fertilizer in the Middle East.
In the downstream sector, new industrial projects include the expansion and upgrading of Mesaieed's oil refinery, the construction of a new petrochemicals complex in Mesaieed and the projects of the Qatar Vinyl Co., Qatar Fuel Additives Co. and Qatar Clean Energy Co.
He said further gas-sector development has resulted in Qatar beginning liquefied natural gas exports last year from the Qatar Liquefied Natural Gas Co. (QatarGas), located in the Ras Laffan industrial city.
The minister noted that other LNG export projects in the works include the Ras Laffan Natural Gas Co. Ltd. (RasGas) project, which aims to produce five million metric tons a year in the first phase. He said the project, which is under construction, will come onstream before the end of this year.