Kuwait will not slow the development of its Oil industry projects in response to the fall of crude prices, its Oil Minister Ali Al-Omair told an industry conference on Sunday.
The chief executive of state energy giant Kuwait Petroleum Corp, Nizar Al-Adsani, told the conference that his company had spent 4 billion dinars ($13.2 billion) in the 2014/15 fiscal year and 2 billion dinars so far in the current fiscal year on strategic oil projects. He said KPC was now studying several Investment opportunities, including petrochemicals, in Asia and North America.
He did not elaborate. Kuwait currently produces about 3 million barrels per day of crude oil and by 2020 it will be able to produce 4 million bpd, Adsani added. Last week, International Energy Agency head Fatih Birol said the fall in global upstream oil Investment in 2015 would be at least 20 percent versus 2014 and the biggest drop in history.
OPEC is confident that the oil Market will be “more balanced” next year as non-OPEC production has contracted and global demand is increasing, OPEC Secretary General Abdullah el-Badri said Sunday. “OPEC is confident that it will see a more balanced market in 2016,” Badri told an oil and gas conference in Kuwait City. “In recent months, there has been a contraction in production from non-OPEC producers and an increase in global demand,” he said. However, Badri also admitted that the “market remains oversupplied”, and insisted that stability is paramount to the crude market which faced “extremely challenging times”. The OPEC chief said market fundamentals did not support the sharp drop in oil prices which have fallen by almost 60 percent since June 2014.
Badri said that global demand for Oil is forecast to rise to 110 million barrels per day by 2040 from 93 million bpd now. “This requires Investment of $10 trillion between now and then,” he said. Earlier Sunday, Qatar’s Energy Ministry Mohammed bin Saleh al-Sada, who is acting OPEC president, said there were signs of an oil price rise next year, adding that the oil price has “bottomed out”.
He said world GDP growth in 2016 is slated to be 3.4 percent as against an expected 3.1 percent in 2015, and that this would result in an increase in global oil demand by 1.3 to 1.5 million bpd. Growth in supplies from non-OPEC producers over the past five years has substantially reduced in 2015 and is likely to show zero to negative growth in 2016, the statement said. In other news, Kuwait’s sovereign wealth Fund, one of the world’s largest, is considering selling assets to cover a state budget deficit caused by low oil prices, the country’s al-Anba newspaper reported on Sunday, quoting unnamed sources. The Kuwait Investment Authority (KIA), which is estimated to have more than $500 billion of assets, is studying whether to liquidate assets that generate annual returns of below 9 percent, the newspaper said.
The KIA’s Money is invested across the world, from the United States to Europe to China, in various asset classes including bonds, equities and real estate. The newspaper did not specify which asset classes might be sold. It said the size of the sales was expected to be about 9 billion dinars ($30 billion), as officials believed selling assets with returns of below 9 percent would be a relatively cheap method of covering the budget deficit and financing big infrastructure projects that are being planned. The KIA did not respond to calls and an email seeking comment on Sunday. Some other Gulf states, principally Saudi Arabia, have already begun liquidating assets to cover their deficits in an era of cheap oil.
Although Kuwait is one of the wealthiest oil exporters in the Gulf and is in no financial danger, state revenues have been hit hard this year by low oil prices. The government ran a deficit of 1.094 billion dinars in the first five months of the fiscal year which started in April, after a deduction for the Future Generations Fund, which is part of its sovereign fund. Finance Minister Anas Al-Saleh said last month that the government also planned to sell local currency bonds by the end of this year to help cover its deficit.
SOURCE : ARABTIMES