Oman pledges 45,000 bpd oil output cut

By Conrad Prabhu — MUSCAT: Dec. 11: Oman has agreed to cut output by 45,000 barrels per day (bpd) as part of a landmark deal clinched by non-Opec oil producers to support a global effort to shore up oil prices. Confirmation of the Sultanate’s output cut came in a message tweeted by the Ministry of Oil & Gas yesterday.  The proposed cut, which comes into effect from January 1, 2017, represents around 4.5 per cent of the current output averaging around 1 million bpd. Oman is among a dozen non-Opec producers that met in Vienna on Sunday for talks aimed at backing an Opec deal, struck two weeks ago by cartel members to help lift global crude oil prices from two-year lows.  The Sultanate was represented at the talks by Dr Mohammed bin Hamed al Rumhy, Minister of Oil & Gas.
As one of the largest producers outside of Opec, the Sultanate’s output cut ranks as the fourth highest among non-Opec producers. Topping the list is Russia, which has pledged to cut production by 300,000 bpd, followed by Mexico, which will pare output by 100,000 bpd.  Kazakhstan, with a proposed reduction of 50,000 bpd comes next, followed by the Sultanate in fourth place with a pledge to reduce production by 45,000 bpd.
Other non-Opec producers that have committed to production cuts are: Azerbaijan (35,000 bpd), Bahrain (12,000 bpd), Bolivia (4,000 bpd), Brunei (7,000 bpd), Equatorial Guinea (12,000 bpd), Malaysia (35,000 bpd), Sudan (4,000 bpd) and South Sudan (8,000 bpd).
Together they account for a total of around 600,000 bpd in reductions pledged by non-Opec members, marking the first time in nearly 15 years that producers outside of the oil cartel have agreed to work alongside Opec in bolstering international oil prices.  This tally compares with a commitment by Opec to reduce its own production by 1.2 million bpd effective from the start of 2017.
Significantly, on Sunday’s deal by the non-Opec bloc will come as a vindication of the Oman’s praiseworthy, albeit solo, efforts in goading global producers into a consensus on capping and reducing output in a bid to reverse the punishing slump in oil prices.  Challenging international players to step up to the plate, Oman offered to cut up to 10 per cent of its own output if global producers followed suit.
While the implications of the output cut for Oman’s oil production infrastructure — now operating at full tilt — are yet to be ascertained, experts see a net benefit accruing to the energy industry as well as the national economy going into 2017 and beyond.
With prices projected to rebound progressively to around $60 per barrel in 2017 as a result of this ground-breaking global deal, the outlook for the national economy promises to be better than it has been during the current year, it is pointed out.