Kuwait sees 'tough' 2016
Anas Al Saleh, Adel Abdel Mahdi and Nizar Al Adasani at the one-day Kuwaiti Energy Strategy Forum in Kuwait City on Tuesday.
Kuwait City - Oil prices may stay volatile; pegged at $40-$60 to 2020.
Kuwait's Opec governor said on Tuesday that this year would be tough, with oil prices seen recovering only after 2016 but remaining between $40 and $60 a barrel until 2020.
"The expectation [is] that 2016 will not be an easy year when it comes to prices. They can remain volatile [at] current levels... prices will remain low," Nawal Al Fuzaia told an energy forum in Kuwait.
"Things will be tough. From now until 2020... I don't think there will be big changes in the oil market in four years. We are talking about $40-$60, that is after 2016," said Al Fuzaia, who is No. 2 in Kuwait's delegation to the Organisation of the Petroleum Exporting Countries after the oil minister.
Any additional crude supplies could weaken prices further, she said, referring to Iran's return to the oil market after the lifting of international sanctions.
"The impact of the Iranian crude depends on when it would come to the market, what are the volumes and grades and where will it be marketed... But any additional supplies from current levels will put pressure on prices."
There has been more than one request in the past six months for an Opec emergency meeting to address sliding oil prices, Al Fuzaia told reporters on the sidelines of the conference.
"But if there was no real and clear cooperation to reduce the supplies from all sides, whether from outside the Opec and heavyweight producers, there will be no [need] for a meeting," she said. "On the contrary, if there was a meeting without a concrete outcome to cooperate, it would have a very bad impact on the oil market."
Asked about comments from a Lukoil official who said Russia needed to work with the Opec to reduce supplies, she said: "The Opec welcomes any cooperation from countries outside the Opec to work with it to stabilise the market and reach suitable prices for all producers... I read these comments as you did," she said.
Al Fuzaia said earlier that the Opec cannot cut oil output alone when producers from outside the group are raising supplies. The two sides should work together to stabilise the oil market, she said.
Opec strategy working
Meanwhile, the Opec's strategy of allowing low oil prices alone to stabilise the market without cutting supply is working, Kuwait's acting oil minister Anas Al Saleh said on Tuesday.
Al Saleh said that he expected the price of oil for the 2016/17 budget to be set at around $25 a barrel.
Some 90 per cent of the Opec country's state revenues come from oil. Kuwaiti oil prices dropped to around $19.50 a barrel on January 21, but have since rebounded and stood around $22.60 on Monday.
Asked if a $25 a barrel would be the price for oil in the 2016-17 budget, Saleh told journalists: "Around this (figure)."
The comments signal that the Opec is sticking to its policy despite statements from Iraq's oil minister Adel Abdel Mahdi that he saw room for flexibility between Opec and non-Opec members on cutting production.
"I do believe that the Opec's strategy is going as planned and we believe that it is so far working well," Al Saleh told reporters on the sidelines of a conference in Kuwait.
Al Saleh and Mahdi said they were willing to back an emergency meeting of the Opec to address the issue, but only if an agenda were agreed in advance. "We can see some flexibility. This should be finalised and we should hear some solid suggestions coming from all parts, from the Opec and non-Opec, at least from the Opec," Mahdi said.
"It is useless to go to a meeting without deciding up front. We said yes if others are willing to go but we have to decide before otherwise this will backfire on us. We have to go forward - I think the market needs that but we also look at our partners outside the Opec to do the same," Mahdi added.
KPC head sees low oil longer
Crude oil prices, which have more than halved since last year, could remain low for a longer time, but that will not deter Kuwait from investing in its energy projects, the head of state-run Kuwait Petroleum Corporation said on Tuesday.
"Low oil prices have been a prominent feature of the market since the second half of 2014, and could stay lower for longer; posing [a] challenge to our industry, but providing an opportunity to structural reforms," KPC chief executive Nizar Al Adsani told an energy conference in Kuwait.
"We, at Kuwait Petroleum Corporation, recognise that it is also a great risk if we do not make investments... we anticipate an expenditure of $100 billion over the next five years... of which half of it is already committed to specific identified projects," he said.
KPC has signed a Memorandum of Understanding with K-sure and Koexim, the Korean credit agencies, for a total of $11 billion to finance the upstream, downstream, petrochemical and transportation projects of KPC and its subsidiaries, Al Adsani said.
"KPC also is studying other means of financing such as bonds, sukuk, project bonds and this will open up the possibility of KPC being rated by the major international credit agencies," he added.