The Organization of Petroleum Exporting Countries, supplier of more than 40 percent of the world’s crude, resolved to slash production by 1.5 million barrels a day at a summit in Vienna in October to stem a decline in oil prices. Crude futures have fallen 53 percent from their record $147.27 a barrel on July 11 and have dropped 27 percent in the past year.
Al-Hamli declined to comment on whether OPEC will need to make a further production cut. Speculation about holding another meeting is premature because the group will meet again in Algeria on Dec. 17 to review the oil market, he said.
OPEC lowered production by 0.3 percent last month to 31.15 million barrels a day after the group in September decided to adhere to official quotas, according to a report by JBC Energy on Monday. Cuts by Saudi Arabia and the United Arab Emirates of about 120,000 barrels a day each were tempered by an increase of 130,000 barrel a day from Iraq, Vienna-based JBC said.
The decline in prices isn’t likely to affect projects that are already planned, al-Hamli said. “Investment is for the long term, the projects we have already undertaken are going ahead,” he said. “It is important to invest in increasing capacity for the next cycle.”
Crude oil for December delivery dropped as much as $1.27, or 1.9 percent, to $66.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $67.06 a barrel at 10:16 a.m. London time.
“It is common knowledge that the age of easy oil is gone forever,” al-Hamli said. “We need to seize the opportunities offered by new discoveries, increase recovery rates from existing fields, improve efficiency and streamline our operations to reduce costs.”
“Manifa and Karan may be renegotiated in the current low price environment,” Buraik said. The changes won’t affect the country’s plans to increase oil production capacity to 12 million barrels a day next year, he said.
Author: Jo Amey
