Baku, Azerbaijan, Jan.14
By Leman Zeynalova – Trend:
OPEC’s crude capacity is expected to grow by 340,000 barrels per day in 2019, Trend reports citing Wood Mackenzie research and consulting company.
“The mood in the Middle East upstream sector is notably buoyant and confidence is on the rise. OPEC crude capacity is set to grow by 340,000 barrels per day in 2019, led by Kuwait, Iraq and the United Arab Emirates (UAE). Sharply rising spend is going against the global grain, as the Middle East OPEC nations look to ramp up production. But with more than 9 billion barrels of oil equivalent (boe) in the region sanctioned in 2018, some are already asking if the supply chain is capable of taking on additional work,” said the company in its analytics.
Regardless of capacity growth, OPEC policy is likely to continue its current course, according to Wood Mackenzie.
“Production restraint is needed in 2019 and beyond. Without it, the market will face a large supply surplus,” said the company.
Wood Mackenzie believes that the strong momentum of discovered resource opportunity (DRO) awards will continue in 2019, led by Brazil (deepwater) and Qatar (LNG).
“We think around 20 billion boe of resources will be awarded – similar in scale to 2018, but very different in character. While the UAE's low-cost conventional shallow-water oil dominated 2018 DRO awards, 2019 will be characterised by prime LNG and deepwater assets,” said the company. “Expect fierce competition from the top players for these resources, which will provide longevity and oil price resilience to company portfolios. Given the scale and quality of assets on offer, we expect big bonuses and huge capital commitments.”
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
The 5th OPEC and non-OPEC Ministerial Meeting was held in Vienna, Austria, on December 7, 2018.
The meeting participants decided to adjust the overall production by 1.2 million barrels per day, effective as of January 2019 for an initial period of six months. The contributions from OPEC and the voluntary contributions from non-OPEC participating countries of the ‘Declaration of Cooperation’ will correspond to 0.8 million barrels per day (2.5 percent), and 0.4 million barrels per day (2 percent), respectively.
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