Kuwait’s acting oil minister, Anas Al-Salah, said the price per barrel should stabilize by the end of the year, closing at $50 a barrel. He adds that supply of daily global production has seen a dip as demand rises.
Al-Salah states, “OPEC’s strategic defense theory has been working well. Now we see better prices in the market, demand has been increasing – part of it is outages of production in Canada, Libya, Nigeria and the shale oil.”
Prices have steadily seen a decline since the 2014 meeting of OPEC, when Kuwait joined forces with Saudi Arabia to defend sales rather than supporting prices. As a result, Kuwait’s budget has been strained amidst rebounding prices.
Persian producers are evaluating spending and scaling back were necessary. A strike by oil workers last month cut productions by half. Al-Saleh said Kuwait isn’t letting go in Kuwait Petroleum Corp.; however, they are contemplating other offers to boost output, as they are OPEC’s fifth largest producer. He adds that upstream projects with a price tag of $60 billion are planned over the next five years, with plans to boost production by the end of this year. They are planning refinery and plant builds in Oman, China, and India and will begin production in South Korea in roughly two weeks.
Al-Saleh continues with production rejuvenation scheduled to begin in 2016 on the two oil fields shared with Saudi Arabia. Ahmad Al-Jemaz, deputy CEO at the state refinery unit, says KPC is planning a production refinery capable of 615,000 barrels a day, scheduled to begin in November 2019. They also have a petrochemical plant and separate receiving terminal scheduled to begin two years later along the Persian Gulf coast.
Article written by HEI contributor Marcela Abarca.