Kuwait envoy lauds decision of non-OPEC states on output cut – Kuwait lowers production in Nov to 2.9 mln; Oman to slashes output

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VIENNA, Dec 11, (KUNA and Agencies): Kuwait Ambassador to Austria and Permanent Delegate to the UN Office in Vienna Sadeq Maarafi welcomed the decision of the non-OPEC countries to cut their oil output by 558,000 barrels per day (bpd).

“This historic decision will have a positive impact on the global market as it will help end the glut in oil supplies,” he said in statements to KUNA on Saturday night following the OPEC and non-OPEC Ministerial Meeting.

“The decision, to take effect on January 1 for a renewable six-month period, will ensure fair prices for both producers and consumers.

“The implementation of today’s decision and the OPEC decision on Nov 30 to cut its output by 1.2 million bpd will be overseen by a ministerial committee chaired by Kuwait and including Algeria, Oman, Russia and Venezuela.

“Today’s decision opened a new chapter in the fruitful cooperation between OPEC and non-OPEC countries in the short and long run,” Marrafi said, expecting the global market to respond soon to such decisions by the marker oil producers.

On the OPEC and non-OPEC Ministerial Meeting, the Kuwaiti diplomat said the meeting was co-chaired by Dr. Mohammed Bin Saleh Al-Sada — President of the OPEC Conference and Minister of Energy and Industry of Qatar, and Alexander Novak — Minister of Energy of the Russian Federation.

It gathered representatives of 11 non-OPEC countries and agreed to add Russia and Oman to the membership of the OPEC ministerial committee.

The committee is expected to meet soon under the chairmanship of Kuwait’s newly-appointed Minister of Oil Essam Abdulmohsen Al-Marzouq, he added.

Maarafi appreciated the efforts made by Qatar’s Al-Sada during his tenure as President of the OPEC Conference in 2016, saying that today’s decision was the fruit of Al-Sada’s dedicated efforts to stabilize the oil market.

Omani Minister of Oil and Gas Dr Mohammed bin Hamad Al-Rumhy said on Sunday that his country will cut oil output by 45,000 barrels per day following the dicision by of the non-OPEC countries to cut their oil output by 558,000.

Quota

“Oman supports such agreement and is ready to commit to previous announced quota by about 3-4 percent to the total of oil production.

The decision, to take effect on Jan 1 for a renewable six-month period, will ensure fair prices for both producers and consumers.

Among the non-OPEC participants at the meeting were 12 oil exporting countries Azerbaijan, Oman, Mexico, Sudan, South Sudan, Bahrain, Malaysia, Equatorial Guinea, Bolivia, Kazakhstan and Russia.

The parties to the negotiations also agreed to form a special group to monitor the observance of the agreement both by the OPEC and non-OPEC countries.

The group would consist of three OPEC members and two non-OPEC countries, Russian Energy Minister Aleksandr Novak said at the press conference Yesterday.

Meanwhile, Saudi Arabia pumped record-high amounts of oil in November, amid talks over a global deal to cut production, defying market expectations of lower output on slower domestic demand and refinery maintenance.

Gulf OPEC member Kuwait reported output at 2.9 million bpd in November, lower than its 3 million bpd in October, while the United Arab Emirates kept its output virtually steady at 3.195 million bpd, according to official figures reported to OPEC.

Saudi Arabia has pledged to reduce its output to 10.058 million bpd as part of an OPEC deal reached on Nov 30 to lower the group’s production to 32.5 million bpd.

The rise in November means Saudi Arabia, OPEC’s biggest producer, will have a bigger task in complying with a plan to cut supply starting in 2017 — its first production-reduction deal since 2008.

Saudi crude exports have been high in recent months, reaching 7.812 million bpd in September, while output has stayed at elevated levels despite the usual seasonal decline in winter when domestic consumption of crude burning for power is less.

A Reuters survey estimated Saudi production in November at 10.45 million bpd due to reduced crude use in power plants for air-conditioning, and lower refining.

A Platts OPEC survey in November estimated Saudi oil production at 10.52 million bpd.

OPEC and non-OPEC producers on Saturday reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

With the deal finally signed after almost a year of arguing within OPEC, the market’s focus will now switch to compliance.

OPEC has a long history of cheating on output quotas. The fact that Nigeria and Libya were exempt from the deal due to production-denting civil strife will further pressure OPEC leader Saudi Arabia to shoulder the bulk of supply reductions.

Saudi Energy Minister Khalid al-Falih said the kingdom may be willing to cut to below 10.058 million bpd next year.

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