London – Organization of Petroleum Exporting Countries (OPEC) expressed its optimism for greater compliance with its deal with other producers including Russia to curb output in an effort to clear a surplus that has weighed the market.
OPEC Secretary General Mohammad Barkindo said that January data showed conformity from participating OPEC nations with output curbs had been above 90% and oil inventories would decline further this year.
“All countries involved remain resolute in the determination to achieve a higher level of conformity,” Barkindo said.
He added that only 100% compliance from OPEC producers would be acceptable while also raising the possibility of other producers cutting production.
He stressed the need for cuts being implemented considering how high level of oil stockpiles continued to weigh on the market.
“All countries involved remain resolute in the determination to achieve a higher level of conformity,” Barkindo said in a conference speech in London.
While confidence has returned to the oil market due to agreed output curbs, it is too early to say whether the landmark OPEC and non-OPEC supply deal should be extended, the group’s secretary general said on Tuesday.
When asked about the possibility of a deeper cut when OPEC meets on May 25, Barkindo said: “I think it would be very premature for the fact that the market is so dynamic it is becoming increasing challenging to forecast.”
“It is too early for us to begin second guessing what the chairman (Kuwait’s minister of oil) will eventually submit in his report to this conference,” he said.
Barkindo also said he expected non-OPEC countries to raise their compliance.
In a statement to Kuwait’s state official news agency KUNA, Managing Director for International Marketing of Kuwait Petroleum Corporation (KPC) Nabil Bouresly said that KPC is looking to diversify investments in the oil sector and curb its reliance on the sale of crude oil by 2040.
Moreover, he noted that the future of oil production lies in the emerging petrochemical industry.
On the plan, the KPC official said Kuwait is adamant to ramp up oil production to 4.75 million barrels per day by 2040 and to produce local petrochemical products, which in turn, would lure foreign investment.
Bouresly reiterated that Kuwait “is very committed to an OPEC decision to reduce oil production”, noting that KPC expects an increase in profits despite the measure.
Speaking on the future of crude oil in the global market, he said there appears to be a “consensus over increasing demand for crude oil, which could last for another 30 year.”
He added that KPC was aiming to recruit youth employees, noting that some 2,000 youths were hired by the corporation last year.
He also stated that Kuwait crude oil ranged between $40 and $42 before the decision to halt production, but it increased after the agreement to $52 per barrel.