OPEC+ states coordinate increase of oil output by 1 mln bpd

VIENNA, Jun 25 (PRIME) -- OPEC+ states have agreed to increase their combined oil production by 1 million barrels per day, Ecuadorian Hydrocarbons Minister Carlos Perez told reporters on June 23.

“Yes, everyone agreed with it…It will amount to 1 million barrels,” he said.

Saudi Arabian Energy Minister Khalid Al-Falih said that the actual increase will be closer to 1 million barrels per day than to 600,000 barrels.

“If we take, for instance, 1.5 million barrels and distribute them proportionally among the 24 countries, we’ve calculated that we would be able to achieve 60% of the amount taking into account free capacities of the countries that can raise production. The story with 1 million barrels is the same. But we’ve rejected the idea to distribute the production increase proportionally between the countries, and the real figure will be closer to 1 million barrels than to 600,000 barrels,” he said.

OPEC+ states plan to supply the additional oil to the market in July–December. The countries have achieved the right balance and flexibility with the agreement, but OPEC+ may hold an extraordinary meeting to discuss changes in oil production if necessary, he said.

Iraqi Oil Minister Jabbar Alluaibi said that the real increase of production will amount to between 700,000 and 800,000 barrels per day, while Russian Energy Minister Alexander Novak confirmed that the increase will reach 1 million barrels. Novak also said that OPEC+ states had under-supplied more than 1 billion barrels of oil to the global market.

About eight to 10 OPEC+ states can raise oil production under the agreement, including Russia, which may raise it by up to 200,000 barrels per day in a month.

“It will amount to about 170,000 barrels per day, this is an approximate figure…We will see how much is needed. If our production in the volume of 200,000 barrels per day will suffice in the second half of the year. This means 1 million barrels per day,” Novak said.

He added that Russia may raise its oil production to about 550 million tonnes of oil in 2018 from 546.8 million tonnes in 2017.

The increase of oil production will support Russia’s budget and oil companies, but OPEC+ states may raise production even more if necessary, he said.

Oman Oil and Gas Minister Mohammed bin Hamad Al Rumhi said that the country may raise its oil output by several thousand barrels per day, and OPEC+ states may gradually raise their oil supplies already starting from July. The bulk of the 1 million barrel increase will be covered by Saudi Arabia and Russia, he said.

Venezuelan Oil Minister Manuel Quevedo said that no OPEC+ state would be able to take the production quota of another country and raise its oil production.

Al-Falih also said that OPEC offered Russia a position of an observer state within OPEC, and Novak said that Moscow will study the offer thoroughly.

Novak also said that OPEC+ states had started discussions of a document on long-term cooperation after 2018.

The next meeting of OPEC+ states will be held on December 3 in Vienna.

In November 2016, OPEC and non-OPEC states agreed to reduce their oil production to rebalance the market. Russia joined the agreement in December 2016 with a promise to cut output by 300,000 barrels daily compared with the level of October 2016. The agreement was prolonged until the end of 2018 in November 2017.

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