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FIVE major international oil companies made profits worth a total of $200 billion last year, with the lion’s share belonging to the mighty American ExxonMobil and Chevron. As if the profits are not enough, the cash flow and the returns on their investment are within the range of 20 percent. Despite the huge returns and cash flow, these companies are going to spend about $18 billion less this year than they did in 2020, perhaps to create some tightness in the energy market, making the oil producing countries to do most of the investments and take the blame.
On the other hand, Kuwait is unable to produce crude oil at our OPEC+ quota. It is short by 200,000 barrels as of last month, while others are enjoying huge returns on the sole source of income. Nobody is asking why and what action should be taken.
Nobody is asking about the reasons behind such a sharp drop in all of our crude oil fields since 2016. They are happy when they see any figure above $85 a barrel, and are in search of last year’s number of $130. They are unaware about how to keep production steady, and pursue higher OPEC quota like the rest of our colleagues in the organization.
Today, Kuwait’s oil production stands at 2.676 million barrels as of last month, while our actual production is 2.548 million barrels per month or less by 128,000 barrels per day, at a time when we need additional income.
While others in the organization are over-producing, we are under-producing and losing prime revenues, as well as avoiding any shortage in our budget and deficits, before the end of fiscal year in March.
No one, not even an MP, paused to ask a question regarding the reasons for the decline, with different oil ministers or senior staff in Kuwait oil industry who are also highlighting the hard surroundings and the lack of experience. They must address the presence of foreign experience and their difficult conditions, like the rest of the neighboring oil producing countries.
We are at loss when we witness the decline in our main sole source of income, without any questions being raised. Oil companies are making their highest ever profits and cash fl ow, beating all financial expectations, buying back their shares, and rewarding their stockholders. On the other hand, Kuwait is suffering from loss and decline of our crude oil production, with the buyers of our Kuwaiti oils making billions of dollars of our oils. Alas!!!
By Kamel Al-Harami
Independent Oil Analyst