In Oil & Companies News 08/12/2016
Only five of 14 non-OPEC oil producers have agreed so far to meet the group on Saturday for talks aimed at widening a deal to reduce output, casting doubt on whether OPEC will secure the full cuts it is seeking, two OPEC sources said.
The Organization of the Petroleum Exporting Countries, which finalised its first oil output cut in eight years last month to prop up prices, is to hold talks with non-member countries in Vienna in the hope that they will also limit supply.
The last time non-OPEC countries joined the organization in cutting output, in late 2001 as prices dropped in the aftermath of the Sept. 11 attacks, non-members promised cuts of 462,000 barrels per day, not quite the 500,000 bpd OPEC then sought.
Currently, Russia has said it will cut 300,000 bpd, meaning other non-OPEC producers combined will need to pledge the same amount to lower output by the 600,000 bpd OPEC wants – half the reduction OPEC is making.
Some OPEC sources familiar with discussions were reasonably sure the outside producers would deliver enough commitments.
“I think they will,” said one. “It should not be that difficult.”
Other OPEC sources were skeptical a pledge for the full amount would be made this time. Among the 14 non-OPEC countries invited to attend Saturday’s meeting, only Azerbaijan, Kazakhstan, Oman, Mexico and Russia have accepted.
“It’s not clear,” a second source said. “Wait until Saturday.”
A third OPEC source said cut pledges amounting to 500,000 bpd were more likely.
Besides Russia, only Oman has publicly stated it is willing to cut production. In public comments, Azerbaijan has indicated it will lower supply, while Kazakhstan has said it is undecided.
OPEC President Mohammed al-Sada, speaking at the Nov. 30 news conference after OPEC finalised its output reduction, was confident that non-OPEC would deliver the 600,000 bpd.
Saturday’s meeting at OPEC’s Vienna headquarters will start at 10:00 a.m. local time (0900 GMT) and be chaired jointly by Sada and Russian Energy Minister Alexander Novak, according to a draft copy of the agenda seen by Reuters.
OPEC will still implement its cut of 1.2 million bpd even if Russia becomes the only non-member to contribute, OPEC member Nigeria said on Wednesday.
Source: Reuters (By Alex Lawler and Rania El Gamal, Editing by Dale Hudson)
