Oil Minister: Kuwait to pursue production target of 4mbpd for 2020 

(MENAFN - Arab Times) Kuwait will proceed with planned oil investment and expansion projects with an eye to achieve its production target for 2020 at 4 million barrels per day (bpd), Kuwaiti Oil Minister Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah reaffirmed on Sunday. Addressing Asia's major oil producers and consumers at a one-day meeting here, Sheikh Ahmad said that Kuwait sticks to a plan to build a refinery in China with a capacity of 300,000 barrels per day (bpd) by teaming up with Asia's top oil refiner Sinopec Corp, as well as a 200,000-bpd refinery in Vietnam through joint venture with Japanese firms and Petrovietnam. "Kuwait recognized the growing long-term demand in the developing countries, especially in Asia, and consequently the necessity of expanding the upstream and downstream capacity," he said at the Third Asian Ministerial Energy Roundtable Meeting, co-hosted by Japan and Qatar.

Energy leaders from 21 countries and three international organizations were among those in attendance.

"The current economic and price environment coupled with the uncertainty about climate change policies and the future demand outlook pose serious challenges to our plans and investments," the Kuwaiti minister warned, adding that obviously the current low price, which has not been matched by cost deflation, in addition to the current fall in demand, will hurt the ability of the industry to invest in new capacity.

"This is an issue of particular importance to our Asian region as our companies are either investors or contactors." A speedy cost adjustment will play an important role in the timely implementation of oil and gas projects and the required capacity expansion, he said.

The one-day meeting came as crude oil prices have fallen to around $51 per barrel, a nearly 65 percent plunge from a record of $147 last July, as the global recession dampens demand for the fuel, spurring cutbacks in oil and gas exploration investments.

Concern

There is growing concern among governments of both oil producers and consumers over a future supply crunch if recovery of the world economy induces demand growth.

The oil price stability at levels conducive to future investments is crucial to energy security, given that it serves as a signal for future investments and long term planning, he underlined.

"While Kuwait and other Organization of Petroleum Exporting Countries (OPEC) producers are fully committed to ensure adequate supplies to the global market, we are also aware of the need to balance the market and avoid harmful volatility," the minister said.

The minister also said Kuwait has continuously called for the global promotion of the development of technologies that address climate change, especially that of Carbon Capture and Storage (CCS) technology.

"Given the high costs needed for developing such technology, we seek Asian countries support for including CCS in the Clean Development Mechanism (CDM) in climate change negotiations."

At the national level, Kuwaits interest is geared to the promotion of oil use without compromising the environmental and efficiency goals, he said. The Kuwaiti oil Sector is currently developing a strategy for reducing Green House Gases emissions while exploring economically viable opportunities for CCS and CDM.

Welcomed

On the issue of transparency, Sheikh Ahmad welcomed a proposal made by Japanese Economy, Trade, and Industry Minister Toshihiro Nikai to conduct a study on Asia's supply and demand outlook, pointing out that Asia has the highest growth in oil demand.

Kuwaiti Oil Minister Sheikh Ahmad Al-Abdullah Al-Sabah said on Sunday his country highly values bilateral cooperation with Japan in the oil sector and seeks closer ties in a wide range of fields.

"I am pleased with the current levels of bilateral energy cooperation, given that Japan is our biggest oil buyer with accounting for 20 percent of total crude exports," the minister told the Kuwait News Agency (KUNA) here prior to attending a meeting of Asian oil producers and consumers.

"I also hope bilateral cooperation will be no longer limited in the hydro-carbon sector but also across a broad range of areas, such as energy efficiency measures and environmental protection," Sheikh Ahmad said. The minister, who arrived in Tokyo on Thursday, has held a series of talks with heads of Japanese oil companies to exchange views on their future cooperation amid the world's second-biggest economy is facing severe recession.

Ministers or high-ranking officials in charge of energy resources from 21 countries and three international organizations are set to discuss energy-related issues in the Asian region, which accounts for 40 percent of total world energy demand. High on the agenda at the one-day gathering are collective efforts for improving investment climate, stabilizing oil prices and improving market ransparency, according to Japan's trade ministry.