Khafji disruption ‘unlikely to hurt KSA’s oil output’

Updated 19 October 2014

Khafji disruption ‘unlikely to hurt KSA’s oil output’

ALKHOBAR: Crude production from the Khafji oilfield, jointly run by Saudi Arabia and Kuwait, has been halted temporarily to comply with environmental rules, according to an industry source and an internal letter seen by Reuters.
The move is unlikely to affect oil supplies from Saudi Arabia because of the Kingdom’s significant crude output capacity, currently at 12.5 million barrels per day (bpd). In September, Saudi Arabia pumped 9.704 million bpd.
The Khafji field, whose production is around 280,000 bpd to 300,000 bpd in the Neutral Zone between Saudi Arabia and Kuwait, was to be brought offline “immediately,” according to a letter signed by Abdullah Al-Helal, chairman of Aramco Gulf Operations (AGOC), which operates the Saudi part of the field.
The industry source said that the shut down had already taken effect and it was not immediately clear how long it would take to bring it back online after complying with the environmental regulations.
Al-Khafji Joint Operations Co. (KJO) is a joint venture between AGOC, a subsidiary of state oil firm Saudi Aramco and Kuwait Gulf Oil Co. (KGOC). Helal could not be reached for comment and senior Kuwaiti oil officials did not respond to a request for comment.
In the letter, dated Oct. 16 and addressed to Mohammed Al-Khatib, executive director of operations of KJO, Helal referred to non-compliance with new environmental air emission standards issued recently by Saudi Arabia’s Presidency of Meteorology and Environment authority.

Russia vows cooperation with OPEC to keep oil market balanced

Updated 21 November 2019

Russia vows cooperation with OPEC to keep oil market balanced

  • Moscow not aiming to be world’s No.1 crude producer, Putin tells annual investment forum

MOSCOW: President Vladimir Putin said on Wednesday that Russia and the Organization of the Petroleum Exporting Countries (OPEC) have “a common goal” of keeping the oil market balanced and predictable, and Moscow will continue cooperation under the global supply curbs deal.

OPEC meets on Dec. 5 in Vienna, followed by talks with a group of other exporters, including Russia, known as OPEC+.

“Our (common with OPEC) goal is for the market to be balanced, acceptable for producers and consumers and the most important — and I want to underline this — predictable,” Putin told a forum on Wednesday.

In October, Russia cut its oil output to 11.23 million barrels per day (bpd) from 11.25 million bpd in September but it was still higher than a 11.17-11.18 million bpd cap set for Moscow under the existing global deal. Putin told the forum that Russia’s oil production was growing slightly despite the supply curbs deal but Moscow was not aiming to be the world’s No. 1 crude producer. Currently, the US is the world’s top oil producer.

“Russia has a serious impact on the global energy market but the most impact we achieve (is) when working along with other key producers,” he said. “There was a moment not that long ago when Russia was the world’s top oil producer — this is not our goal.”

Russia plans to produce between 556 million and 560 million tons of oil this year (11.17-11.25 million bpd), Energy Minister Alexander Novak said separately on Wednesday, depending on the volume of gas condensate produced during cold months.

Russia will aim to stick to its commitments under the deal in November, Novak told reporters.

Russia includes gas condensate — a side product also known as a “light oil” produced when companies extract natural gas — into its overall oil production statistics, which some other oil producing countries do not do.

As Russia is gradually increasing liquefied natural gas production (LNG), the share of gas condensate it is producing is also growing. Gas condensate now accounts for around 6 percent of Russian oil production.

Novak told reporters that in winter, Russia traditionally produces more gas condensate as it is launching new gas fields in the freezing temperatures.

“We believe that gas condensate should not be taken into account (of overall oil production statistics), as this is an absolutely different area related to gas production and gas supplies,” he said.

Three sources told Reuters on Tuesday that Russia is unlikely to agree to deepen cuts in oil output at a meeting with fellow exporters next month, but could commit to extend existing curbs to support Saudi Arabia.

On Wednesday, Novak declined to say that Russia’s position would be at upcoming OPEC+ meeting. Reuters uses a conversion rate of 7.33 barrels per ton of oil.