Kuwait’s oil minister is skeptical about the need—and the ability—of the state oil company to spend close to US$500 billion on an expansion program that should run until 2040, Reuters reports, citing local media.
Khaled al-Fadhel said he was not against the expansion as such, but added that he believed the projected US$495 billion (150 billion dinars) to fuel this expansion are “optimistic.”
Kuwait, along with the UAE and Saudi Arabia, contributes half of OPEC’s total, Wood Mackenzie’s chief analyst Simon Flowers noted in a recent article for Forbes, adding that oil industry expenditure in the three countries has remained relatively stable in the last few years despite the downturn.
Between 2014 and 2018, Flowers said, the combined upstream investment of Kuwait, the UAE, and Saudi Arabia had gone down by 19 percent, from US$83 billion to US$67 billion, while global industry investments fell as much as 40 percent during the same time.
Kuwait’s total production capacity currently stands at 3.15 million barrels of crude from wholly owned fields, but plans are to boost this to 4 million bpd by 2020 and 4.75 million bpd by 2040.
Meanwhile, production, however, is far from this capacity. In December, the country produced 2.8 million bpd of crude oil, which was higher than what it pumped in November, at 2.77 million bpd. Despite the increase, the oil minister, who was only appointed recently, said Kuwait was committed to the production cuts, which should take off some 3 percent of its daily output off the supply chain.
Al-Fadhel said, in his first public comments after his joining the Kuwaiti cabinet, that he expected the oil market to stabilize soon, with demand for the commodity healthy, in spite of growing worry about the global economy.
"The oil market is in a better place today than it was a few years ago," the official said as quoted by Saudi Asharq Al-Awsat, noting the “unprecedented” level of cooperation among so many large producers.
By Irina Slav for Oilprice.com
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