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Turkmenistan—a small non-OPEC oil producer on the Caspian Sea and bordering Iran and Kazakhstan—may join the NOPEC group of nations part of the OPEC-led production cut deal, OPEC and industry sources told Reuters on Thursday, in what could be a slightly deeper overall cut in a largely expected rollover of the production reductions.
OPEC is meeting on May 25 in Vienna to decide whether the cuts would be extended beyond their original expiry date at the end of June. The market is largely expecting a rollover until the end of the year, and Saudi Oil Minister Khalid al-Falih has even hinted at extending the deal into early 2018.
In the deal from November 30, OPEC pledged to cut 1.2 million bpd of its production, while Azerbaijan, Bahrain, Brunei Darussalam, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Republic of Sudan, and Republic of South Sudan committed to a collective cut of 558,000 bpd.
Turkmenistan had an estimated 600 million barrels of proven oil reserves as of January 2016, according to the EIA which cited data from the Oil and Gas Journal. Despite the fact that it lies on the Caspian Sea and its vast oil and natural gas resource base, Turkmenistan is not a major player in energy markets because it lacks infrastructure, which limits its exporting capabilities.
According to the BP Statistical Review of World Energy 2016, Turkmenistan’s oil production in 2015 was 261,000 bpd, up by 5 percent over 2014.
Turkmenistan is expected to attend the meeting in Vienna in two weeks. So is Egypt which, however, has clearly stated that it will not be cutting production.
Related: Oil Price Volatility Spikes Amid OPEC’s Charm Offensive
“Egypt and Turkmenistan are expected to attend the conference for the first time,” one source told Reuters.
According to Egypt’s Petroleum Minister Tarek El Molla, as quoted by Reuters:
“Egypt will participate as an invitee but is not cutting production. We are short on products and we do not export crude.”
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.