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OPEC Crude Oil Production Capacity to 2010A Report by Dr Paul McDonald, Consulting Editor, Oil and Energy Trends
Contents
Latest DevelopmentsOil prices approached record levels as fears grew of a cut in production by OPEC. Partly in response to such fears, OPEC's ministers agreed in Vienna on 31st January to leave output quotas unchanged at 28 mn bpd (for details of individual country quotas, see GER ‘Latest Developments', July 2005). NigeriaOET ARCHIVE LINK: 'Nigeria struggles to expand oil industry', Focus, Feb06 Previous:OPEC's production ceiling was kept unchanged at 28 mn bpd at the ministerial meeting held in Kuwait on 12th December, 2005. NigeriaDeepwater oil developments will lift production capacity from the present 2.5 mn bpd to 3.5 mn bpd in 2007 and to 4.1 mn bpd by 2010, according to the oil ministry. Local participation will be encouraged in future exploration rounds and oil companies will be encouraged to incorporate plans for integrated refinery projects in their bids. OPECThe following projects are scheduled to come on-stream in 2006:
OET ARCHIVE LINK: ‘Condensate's prospects boosted by shortage of light crude', Focus, Nov05. OPECMinisters agreed at their meeting in Vienna on 19-20th September, 2005 to keep the collective ceiling unchanged at 28 mn bpd but to offer up to 2 mn bpd of additional crude oil to world markets for a period of three months beginning 1st October. The crude on offer was mainly heavy and sour and there was little interest in the offer. Ministers are next due to meet on 12th December, in Kuwait. OET ARCHIVE LINK: OPECA ministerial meeting in Vienna on 15th June, 2005 agreed to raise the production ceiling by 0.5 mn bpd to 28.0 mn bpd with effect from 1st July and to make a further increase of 0.5 mn bpd if prices remained high. OPEC Quotas from 1st July, 2005
* Including half the Neutral Zone NigeriaOET ARCHIVE: ‘Doubts cloud Nigeria 's production outlook', Looking Ahead Jul05 OPECOET ARCHIVE: ‘Does OPEC have enough spare capacity?' Focus, May05 ‘Middle East struggles to find marker crude' Looking Ahead, May05 Saudi ArabiaOil minister Ali Naimi says that Saudi Arabia could raise its production capacity from 11 mn bpd to 15 mn bpd any time in the next 15 years. State-owned Saudi Aramco CEO Abdallah Jumah says that capacity could rise eventually to 23 mn bpd. Saudi ArabiaSaudi Aramco is to raise its output of light crude by increasing production from the Abu Safah and Qatif fields from 0.8 mn bpd to 1.0 mn bpd by the end of 2005. OPECApril 11, 2005 A ministerial meeting in Isfahan on 16th March, 2005 agreed to raise OPEC's production ceiling by 0.5 mn bpd to 27.5 mn bpd, with immediate effect, and offered a further rise in April or May, if required. The ministers also agreed a new basket of crudes to act as the OPEC reference price. The new basket–containing 11 crudes–is heavier than the old one of 7 crudes and represents the growth in OPEC's production of heavier crudes. OPEC Quotas from 16th March, 2005
* including half the Neutral Zone New Crude Basket (Average API 32°)
Former Crude Basket (Average API 34°)
* not an OPEC member The International Energy Agency in its February 2005 Oil Market Report estimates production capacity as follows:
HYPER-LINK : http://omrpublic.iea.org A ministerial meeting in Vienna on 30th January 2005 left quotas unchanged at 27.0 mn bpd (seeOPEC Latest Developments, November 2004)but suspended the target price band of $22-28/bbl. A new band will be discussed in Isfahan on 16th March, 2005. The number of crudes in the price basket used to set the OPEC price will probably be increased from the present seven. Many ministers want a price floor somewhere in the range of $30-35. Saudi ArabiaSaudi oil minister, Ali Naimi, said the country would raise its production capacity from the current 11.0 mn bpd to 11.7 mn bpd in 2007. UAEAl-Jazirah of the UAE and Ukraine’s Naftogaz are to explore for oil and gas in Fujairah. Gas use is set to rise there and in the other northern emirates once a gas grid is built by Sharjah’s Crescent Petroleum. Ras al-Khaimah is to import gas from Oman. KuwaitKuwait and Qatar have agreed to build a gas pipeline connecting the two countries. Saudi Arabia will need to give permission for the line to transit its territory. Kuwait Oil Company reports that Kuwait’s production capacity is now 2.8 mn bpd. IraqThe results of the election of 30th January have been announced as follows:
Turnout was given officially as 59%, though only 2% voted in the Sunni Arab-dominated province of Anbar . Following the election, Russia 's Lukoil began talks with Iraq over its rights to develop the West Qurna oil field, which were granted by the government of Saddam Hussain. Iraq has allocated $3 bn for capital expenditure in the oil industry during 2005. The sum covers both upstream and downstream expenditure. OET ARCHIVE LINK: ‘Iraq’s oil sector mired in problems despite successful election’, Focus, January05 US dollar weakness prompts debate over pricing in other countries. OPEC Quotas, 2004: OPEC Quotas, First Quarter, 2004
* including half the Neutral Zone OPEC Quotas, Second Quarter, 2004
* including half the Neutral Zone OPEC Quotas from 1st July, 2004
* including half the Neutral Zone OPEC Quotas from 1st August, 2004
* including half the Neutral Zone OPEC Quotas from 1st November, 2004
* including half the Neutral Zone Saudi Arabia's oil minister, Ali Naimi, said on 29th November, 2004 that a strategic review by OPEC had concluded there was no need to switch the pricing of oil away from the US Dollar. OPECOPEC ministers agreed in Cairo on 10th December 2004 to leave their 27 mn bpd ceiling unchanged but to reduce output by 1 mn bpd from 1st January 2005. It was agreed to share the cuts as follows:
NB: Volumes above approximate. Saudi ArabiaSaudi Minister of Oil, Ali Naimi, said he was willing to consider offering crude oil to Asia on take-or-pay terms for long term contract holders. NigeriaUnrest in Rivers State led to the shutting-in of some 100,000 bpd of Bonny Light and Escravos production in December 2004. Earlier troubles led to the loss of further output from Escravos, amounting to some 140,000 bpd. IraqCrude oil exports were restricted to 1.16 mn bpd in December 2004 because of attacks on pipelines and other facilities: the lowest monthly total since September 2003. Exports for the whole of 2004 amounted to 1.53 mn bpd. Attacks on oil installations have cost Iraq nearly $8 bn in lost oil revenues, according to oil minister, Thamar Ghadban. The Ministry of Planning announced a $3.75 bn plan to upgrade oil refineries and build new ones from 2005-7. The Ministry of Finance said Iraq hoped to produce 3.5 mn bpd by the end of 2005, compared with an estimated 1.9 mn bpd in December 2004. Saudi Arabia There was much debate during 2004 over the size of Saudi Arabia's oil
reserves and its production capacity. Oil production capacity has been raised to 11.0 mn bpd, according to oil minister, Ali Naimi, following the commissioning of the Abu Safah and Qatif fields. There are plans to increase it further to 12.5 mn bpd, when required by future demand. A further expansion beyond that is under consideration, taking production capacity to 15.0 mn bpd. KuwaitKuwait is finding it hard to raise production LibyaLibya's relations have improved with the US, prompting increasing foreign
upstream interest there. IraqThe US is trying to revive oil production. Plans to rebuild the power sector have hit problems A paper in the British medical journal The Lancet of 29th October, 2004, says that up to 194,000 Iraqis may have died since the US-led invasion of March, 2003. The article gives a range of 8,000 to 194,000 with a 90% probability that the figure exceeds 40,000. Other authorities quote lower figures. There are no US official figures for the number of Iraqi deaths. NB: The situation in Iraq is updated monthly in OET in 'The Month in Brief'. NigeriaProtests against increases in domestic fuel prices have led to labour
unrest, threatening production. |
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