Proposal to trim oil output is still on the table, says Oman
Following the Organization of Petroleum Exporting Countries’ recent proposal to cut oil production, Oman has reiterated its willingness to join OPEC and non-OPEC producers for a consensus on lowering output to stabilise the market.
Earlier in the year, the sultanate had offered to cut its production by five to ten per cent on the condition that every other producer agrees to do the same.
“Our position has always been ‘cut production to improve prices’,” H E Salim al Aufi, Undersecretary of the Ministry of Oil and Gas, said on Sunday.
Speaking to reporters on the sidelines of the launch of the Mogas 91 grade of petrol, H E Aufi said, “We had even offered, at some point, to cut production by up to ten per cent. We stand by our offer.”
OPEC has agreed to the outline of a deal that will cut output for the first time in eight years.
“We are ready to cut output but we cannot do it alone. It will have to be part of a joint effort by OPEC and non-OPEC producers,” he added.
Oman crude touched a 12-month high of over US$50 per barrel on the Dubai Mercantile Exchange (DME) last week, as oil markets maintained an upward momentum after OPEC members pledged to curb output for the first time since 2008 at their late-September meeting in Algiers.
The price of Oman crude has strengthened by over US$7 per barrel since the OPEC agreement, which is expected to be ratified at the producer group’s formal November meeting in Vienna.
H E Aufi said this year’s production levels have been the best so far and companies in Oman are finding ways to sustain activity levels to maintain output.
On whether capex in the oil industry could further be reduced next year, he said, “There is no indication at the moment. Companies have been submitting their proposals. But of course they have been pushed to reduce costs as much as possible without impacting two items: Production levels and Omani jobs. We always take into consideration these two items when we discuss programmes with companies.”