Organization of the Petroleum Exporting Countries (OPEC) will discuss the fate of the deal to curb oil production, according to Kuwait’s oil minister Bakhit al-Rashidi, however, OPEC Secretary-General Mohammad Barkindo said that it is still not clear whether the deal will be extended or not.
Rashidi mentioned that the pact between OPEC and non-OPEC producers would run to the end of the year and market conditions would determine whether to extend it further.
The minister also said the OPEC meeting in June in Vienna would offer a chance to review the deal, adding that oil markets were heading in the right direction for stability.
“The agreement will continue until the end of this year,” the minister told reporters at an oil industry event in Kuwait.
Rashidi added that “it would depend on market conditions whether to extend this agreement beyond 2018 or to reach a permanent agreement between OPEC and non-OPEC to support market stability”, saying this issue would be reviewed later in the year.
OPEC Sec-Gen said last week that an initial draft of a longer-term alliance agreement between OPEC and non-OPEC oil producers would be discussed at the June meeting.
Barkindo said that oil stocks in the developed world fell in February to below 50 million barrels above the latest five-year average and that the declining trend would continue over the coming months.
Lack of investment in the oil sector was dominant in Monday's statements and speeches in Kuwait, where many complained that the sector still suffers from lack of investments.
Oman's oil minister, Mohammed bin Hamad al-Rumhi, called on all OPEC members and independent producers involved in the reduction agreement to continue their cooperation to maintain favorable conditions for oil investments in the market.
Barkindo urged oil producers and companies to invest in order to meet future crude demand and compensate the annual decline in fields of about 4 million barrels per day (bpd).
Barkindo said demand for oil would reach 100 million bpd faster than expected, adding demand would be in the range of 111 million bpd in 2040. To meet this demand, the Sec-Gen said the global oil sector needed $10.5 trillion in investment by 2040.
OPEC countries, including Kuwait, are investing hundreds of billions of dollars to maintain or increase their production capacity.
Kuwait plans to spend more than $100 billion over the next five years on oil, gas, refining and petrochemical projects, Kuwaiti minister Rashidi said. He added that investment in natural gas production is among Kuwait's priorities now.
Approximately 60 percent of Kuwaiti consumption of natural gas is used for the refining and petrochemical sector, with the remaining 40 percent used for the power generation sector, indicated Rashidi.
Kuwait Petroleum Corporation (KPC) CEO Nizar al-Adsani said on Monday that Kuwait aims to increase its oil and gas production and reserves by acquiring assets abroad as well as expanding its exploration efforts.
Adsani announced that while Kuwait's oil exports will continue to focus on Asia, the Kuwati's National Petroleum Company is also looking to expand to African market for possible acquisitions.
"We have started working with financial institutions to achieve strategic partnerships to find the optimum solutions to finance our current and future projects," he said.
