Saudi Arabia: OPEC, allies coordinating to hold Saturday meeting

The meeting of the group of leading oil producers, known as OPEC+, would be held on Saturday. (Reuters)
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Updated 05 June 2020

Saudi Arabia: OPEC, allies coordinating to hold Saturday meeting

  • Russian energy ministry earlier confirmed the meeting

DUBAI: Saudi Arabia’s energy minister said on Friday that OPEC and its allies, a group known as OPEC+, were working to hold their oil output policy meeting on Saturday.

“The conditions right now warrant hopefully successful meetings. Coordination is under way to hold OPEC and OPEC+ meetings tomorrow afternoon,” Prince Abdulaziz bin Salman said.

The Russian energy ministry earlier similarly said a video conference of a group of leading oil producers, known as OPEC+, would be held on Saturday.

The producers known as OPEC+ previously agreed to cut supply by 9.7 million barrels per day (bpd) during May and June to prop up prices that collapsed due to the coronavirus crisis.

Cuts have been due to taper to 7.7 million bpd from July to December.


Oil giants’ production cuts come to 1m bpd as they post massive write-downs

Updated 10 August 2020

Oil giants’ production cuts come to 1m bpd as they post massive write-downs

  • Crude output worldwide dropped sharply after the market crashed in April

LONDON: The world’s five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand.

The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30 percent worldwide.

Several executives said they took massive write-downs because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic.

Of those five companies, only Exxon Mobil did not book sizeable impairments. But an ongoing reevaluation of its plans could lead to a “significant portion” of its assets being impaired, it reported, and signal the elimination of 20 percent or 4.4 billion barrels of its oil and gas reserves.

By contrast, BP took a $17 billion hit. It said it plans to recenter its spending in coming years around renewables and less on oil and natural gas.

Weak demand means oil producers must revisit business plans, said Lee Maginniss, managing director at consultants Alarez & Marsal. He said the goal should be to pump only what generates cash in excess of overhead costs.

“It’s low-cost production mode through the end of 2021 for sure, and to 2022 to the extent there are new development plans being contemplated,” Maginniss said.

London-based BP has previously said it plans to cut its overall output by roughly 1 million barrels of oil equivalent (BOEPD) by the end of 2030 from its current 3.6 million BOEPD.

Of the five, Exxon is the largest producer, with daily output of 3.64 million BOEPD, but its production dropped 408,000 BOEPD between the first and second quarters. The five majors, which include Chevron Corp, Royal Dutch Shell and Total SA, also cut capital expenditures by a combined $25 billion between the quarters.

Crude output worldwide dropped sharply after the market crashed in April. The Organization of the Petroleum Exporting Countries agreed to cut output by nearly 10 million barrels a day to balance out supply and demand in the market.