KUWAIT: Oil producers may not need to roll over a deal to cut production beyond March if all members fully comply with their pledges, the Kuwaiti oil minister said yesterday. “The current reduction deal is sufficient to achieve the desired purpose,” of rebalancing the oil market, Essam Al-Marzouq told reporters after opening an oil conference. Although “the compliance level to the cuts has reached an unprecedented 116 percent”, this was mainly due to the fact that some countries were making higher cuts than pledged.
“Our focus now is centered on making all member states fully comply with the cuts to reach an even better percentage and therefore not need a new extension,” Marzouq said. Marzouq, who heads a joint ministerial committee monitoring compliance, said it was too early to say if a new extension was needed and that “OPEC will take a decision next month”.
The oil cartel is holding a key ministerial meeting in Vienna on Nov 30. OPEC and non-OPEC producers struck a historic deal a year ago to cut crude output by 1.8 million barrels per day for six months. The deal was extended by nine months until March. It has boosted oil prices to above $55 a barrel and reduced record high inventory levels.
Meanwhile, Kuwait will import 50 million cubic feet of gas from Iraq, Marzouq said, indicating this quantity was equal to five percent of Kuwait’s summer consumption. In his speech during opening the 3rd Kuwait Oil and Gas Show and Conference (KOGS 2017), Marzouq said the share of renewable energy sources, including wind, photovoltaic panels, and geothermal and solar power, will rise in energy mix from one percent in 2015 to five percent by 2040. The portion of nuclear power is expected to rise from five percent in 2015 to six percent by 2040, he told reporters.
He pointed out that the fossil fuels, including gas, coal and oil, will remain a key source to meet 75 percent of the future energy demand by 2040 compared with 81 percent in 2015. Despite forecasts of the continued dominance of oil in the future of energy, challenges remain major, mainly in light of the weakness of crude oil prices, he said. This prompted many governments of oil-producing countries to carry out economic and financial reforms, diversify sources of income amid high competition and increase the efficiency of using energy through applying advanced technology, Marzouq indicated.
The minister noted that Kuwait is continuing its plan to implement vital oil projects in accordance with the 2040 strategy without being affected by the oil prices. The projects include the exploration of crude oil and gas, and refining them, in addition to the expansion of petrochemical products. He stressed that such projects will enhance environmental performance and safety in oil refineries, and provide new jobs as well as support the country’s economic growth.
For this purpose, several joint initiatives and workshops were launched to carry out the local strategic program through partnerships with the private sector, he said. He referred that a framework has been prepared to boost cooperation amongst oil companies, governmental bodies and the private sector’s companies to determine services and industries needed by the oil sector in the coming years, and develop a mechanism to facilitate the transfer of knowledge and modern technologies from the oil sector and international companies to the private sector. – Agencies