Local Business
Logo
 

Opec, allies likely to extend oil supply curbs

Ashwani Kumar/Abu Dhabi
Filed on November 11, 2019
Condoleza Rice, Suhail bin Mohammed Faraj Faris Al Mazrouei; Dharmendra Pradhan, Minster of Petroleum and Natural Gas of India; and Mohammad Barkindo during a panel discussion at the event. - Photo by Ryan Lim

Opec, plus allies led by Russia, have implemented an agreement to cut output by 1.2 million barrels per day.

Opec and allied oil producers will probably extend a deal to limit crude supply but are unlikely to deepen their cuts, Oman's energy minister said on Monday, as the UAE said it was not worried about long-term growth in oil demand.

The Organisation of the Petroleum Exporting Countries (Opec), plus allies led by Russia, have since January implemented an agreement to cut output by 1.2 million barrels per day (bpd) which lasts until March 2020 in an attempt to boost prices. They meet in December to review production policy.

"Extension probably, (deeper) cuts I think unlikely unless things happen in the next couple of weeks," the energy minister of non-Opec Oman, Mohammed bin Hamad Al Rumhy, told reporters at an energy conference in the UAE capital Abu Dhabi.

He said oil demand was improving as trade tensions soften and that Oman was satisfied with current oil prices, which fell on Monday amid concerns over the prospects of a trade deal between the United States and China.

Suhail bin Mohammed Faraj Faris Al Mazrouei, the UAE Minister of Energy and Industry, the third largest producer in Opec after Saudi Arabia and Iraq, said oil demand growth was "reasonable".

Opec Secretary-General Mohammad Barkindo warned about under investment in the oil industry, although he said the pace had picked up from 2014-16 when prices slumped.

"What we've seen in 2017-18 is only a marginal uptick in investments ... Investors in the industry should be for the long term, not fly in, fly out," he said.

In its 2019 World Oil Outlook, Opec said it would supply a diminishing amount of oil in the next five years as output of US shale and other rival sources expanded, despite a growing appetite for energy fed by global economic expansion. Rising climate activism in the West and widening use of alternative fuels are putting the strength of long-term oil demand under more scrutiny.

"The greener forms of energy will have a higher pace of growth but conventional oil and gas will also grow. Gas will grow more as there is demand for cleaner forms," Mazrouei said.

Change disruption into opportunity
Meanwhile, top leaders called for governments and oil and gas industry to rethink approach to technology, human capital, sustainability and partnerships. Disruption in industry is also an opportunity, the Abu Dhabi International Petroleum Exhibition Conference heard.

Dr Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (Adnoc) said the industry was disrupted on multiple levels and needed a new slant.

"We have to come to terms with some realities. Our industry is being disrupted on multiple levels by new technology, new businesses and operating models, new forms of energy and geo-political order. The era of disruption is just beginning and will only gather pace over time. The oil and gas company of today can be a winner tomorrow, if it operates at a lower level of cost and a higher level of performance, brings digital into the core of its operations, embeds sustainability into its DNA and rethinks how to leverage its partnerships, enable its people and re-center its customer relationships."

He stressed on need for 'creative' partnership to drive economic growth and prosperity.

"The fact is by 2040, all the energy currently consumed in the US, India, and Japan will be added to global energy demand. And in even the most fast-paced transition scenarios, oil and gas will provide the source for over half of it. These facts are undisputed and simply make a compelling business case to invest in the future of our industry," he said and added that even as Adnoc deepened its partnerships globally, the company was pivoting towards Asia where energy demand is growing fastest.

Meanwhile, speaking at a panel discussion, Condoleezza Rice, former US secretary of States, USA, highlighted about human disruption and the opportunity that it presents.

"Our citizens are more demanding than they ever been of their governments to deliver for them. People are no longer willing to just put up with it. Part of this is because technology has made it possible to see what's going on everywhere in the world. People know that their life can be better and hence expectations are rising."
- With inputs from Reuters
- ashwani@khaleejtimes.com


ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM Business
MORE FROM Khaleej Times
CurrentRequestUnmodified: /awokcom-closes-30-million-series-a-funding macro_action: article, macro_profile: , macro_adspot:
 
 
 
 
 
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios