KUWAIT CITY, Oct 16, (Agencies): 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 Sunday.
“The current reduction deal is sufficient to achieve the desired purpose,” of rebalancing the oil market, Essam Al-Marzouk 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 centred on making all member states fully comply with the cuts to reach an even better percentage and therefore not need a new extension,” Marzouk said.
Marzouk, 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.
The latest global oil forecasts issued by the OPEC Secretariat indicated that the world’s energy demand will rise by 35 percent by 2040 compared with the level in 2015, Al-Marzouq said on Sunday.
In a speech during opening the 3rd Kuwait Oil and Gas Show and Conference (KOGS 2017), Al-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.
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.
Al-Marzouq announced on Monday that discussions with Saudi authorities over Al-Khafji oil field are proceeding.
“There are simple matters that need to be thrashed out, then production will resume,” said the minister in a statement to journalists after opening an exhibition on sidelines of Kuwait Third Oil and Gas Conference.
Minister Al-Marzouq indicated that the environmentally friendly fuel project at Mina Abdullah Refinery and Mina Al-Ahmadi was in the final phase, adding that work was also proceeding as scheduled at site of Al-Zor Refinery venture, forecast to finish by end of 2019.
Meanwhile, Kuwait Petroleum Corporation (KPC) announced Monday it has renewed its crude oil storage and transportation contract with Egypt’s Arab Petroleum Pipelines Company (SUMED).
KPC said in a press statement that the renewal of the contract was signed on the sidelines of the third Kuwait Oil & Gas Show and Conference (KOGS 2017) held in Kuwait between Oct 15 – 18.
Deputy Managing Director of Global Marketing in KPC Nabeel Buresley and Chairman and Executive Director Mohammad Abdul Hafiz attended the renewal ceremony.
The contract is one of the important strategic contracts aims at expanding KPC’s presence in the Mediterranean Region and North West Europe to increase Kuwait’s market share in that region, KPC said.
Kuwait Petroleum Corporation (KPC) signed an agreement with one of the suppliers to provide Kuwait with liquified natural gas to cover the long-term needs of the State in line with the KPC’s plan to provide the best economic and environment friendly alternatives.
Sumed pipeline is an oil pipeline in Egypt, running from the Ain Sukhna terminal on the Gulf of Suez to offshore Sidi Kerir, Alexandria on the Mediterranean Sea.
It provides an alternative to the Suez Canal for transporting oil from the Arabian Gulf region to the Mediterranean.
It is owned by the Arab Petroleum Pipeline Company (Sumed), a joint venture of Egypt, Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar.
In another report, CEO of Kuwait National Petroleum Company (KNPC) Mohammad Al-Mutairi said the total volume of expenditure on the environmental fuel project amounted to KD 3.1 billion (about $10.25 billion) until the end of September 2017.
Al-Mutairi said in an interview with “Al-Seyassah” newspaper on Monday that the total number of employees of the project amounted to about 39,000 workers, pointing to the company’s intention to receive the first payments of external financing for the project in November.
He pointed out that among the most significant and strategic projects KNPC relies on currently is of the sulfur handling in Ahmadi port where nearly 93.51 percent of the prject is completed, anticipating completion by January 2019.
He pointed out that the 5th gas line project, which aims to address future quantities of gas in Kuwait to produce ethane, propane, butane and natural gas is proceeding according to the plan so far.
He said that the production of these gases aims to treat about 805 million cubic feet per day of gas and 106,000 barrels of condensate, as the percentage of completion is nearly 58 percent at a cost of up to KD 722.5 million (about $2.3 billion).
He added that the refinery capacity of Kuwait National Petroleum Company after the closure of the Shuaiba refinery and the operation of the environmental fuel project will be 800,000 barrels, as the capacity of Mina Abdullah refinery after the operation of fuel will be 454,000 barrels per day, while the refinery in Mina Al-Ahmadi will be 346,000 barrels per day.
Meanwhile, Kuwait Petroleum Corporation (KPC) CEO and Deputy Chairman of the Board Nizar Al-Adsani stated Sunday that Kuwait aims to scale oil production up to four million barrels per day by 2020.
The KPC and its subsidiaries will raise the production capacity of crude oil to four million barrels per day by 2020, Al-Adsani said in a speech at the inaugural session of the 3rd Kuwait Oil and Gas Show and Conference (KOGS 2017).
He went on to say that the KPC would also develop gas fields in northern Kuwait to take the production up to one billion cubic feet per day by 2023.
To beef up oil production, Al-Adsani argued that the KPC also would launch two gathering centers projects in March 2018 in the north of Kuwait.
KPC would start production of heavy oil from Fars reservoir in the Ratqa oil field by May 2019 at a capacity of 60,000 barrels of oil per day, he disclosed.
In addition, the KPC plans to increase drilling rigs from 130 to 180 by FY 2019-20, the CEO said.
On refining and production projects abroad, Al-Adsani said, “We started with our partners the procedures for operating a new refinery in Vietnam as a part of a petrochemical complex with a capacity of 200,000 barrels per day of Kuwaiti oil. The commercial operation of the refinery will commence in December 2017.”
He noted that marketing of the refinery production started with a strategic local partner (Idemitsu Kosan). The first fueling station was inaugurated in October, he said.
He also unveiled that studies are being completed for a joint venture between the KPC and the Oman Oil Company to build a refinery with a capacity of 230,000 barrels per day in the southern Duqm region of Oman.
The final decision in this regard is expected to be taken before the end of 2017, he said.
As part of the company’s interest in the petrochemical sector, which is one of the main pillars of the income diversification strategy, the KPC is embarking on preliminary engineering studies for the construction of a olefins and aromatics production complex in Kuwait, he said.
“Out of belief in the importance of integration between the refining and petrochemical sectors, and to enhance our global presence, the KPC is in the final stages of constructing a petrochemical complex in the United States in cooperation with Dow Chemical,” Al-Adsani said.
Moreover, the KPC is currently completing studies to build a joint aromatics complex in the Kingdom of Bahrain with the Bahrain National Gas Company (NOGA) and a petrochemical project in the Canadian State of Alberta, he said.
“These projects as a whole confirm our determination to continue our expansion in the petrochemical industry because it is the future choice for ensuring the value added,” he said.
He unveiled that the KPC is working on the building of eight tankers for transporting crude oil, liquefied natural gas and oil derivatives.