Kuwait exports 2.1 million barrels per day (bpd) of crude, Nabil Bouresli, Managing Director of international marketing at Kuwait Petroleum Corporation (KPC) said Saturday. Given current factors, mainly increase in demand over supply, international oil prices could reach USD 50 a barrel in 2016, Bouresli said in an interview with Kuwait News Agency (KUNA).
Kuwait's production level is nearing three million barrels daily; 2.1 million of which as crude exported to world markets and the rest refined locally, he noted, adding "Kuwaiti crude is marketed upon annual, long-term and safe contracts. In case of surplus occurring, it would be in very small quantities."
On the potential agreement between OPEC and non-OPEC members of freezing production at January levels, Bouresli reaffirmed that any oil policy has its pros and cons. "This is where international marketing at KPC comes in handy through finding opportunities to promote crude and derivatives.
"Kuwaiti oil and other related products are exported to more than 35 countries; 80 percent to Eastern hemisphere, 15 percent to Western hemisphere and five percent to the African Continent," he pointed out.
On future of conventional energy sources and the impact of increasing demand on shale oil as an alternative, Bouresli said shale; despite its huge potential, is facing many challenges, mainly production cost that can reach US$35-50 a barrel, and would lead to an apparent economic unfeasibility when prices decline.
The production of shale oil has been hindered because of technical difficulties and costs. In March 2011, the United States Bureau of Land Management called into question proposals in the US for commercial operations, stating "There are no economically viable ways yet known to extract and process oil shale for commercial purposes." On competition, Bouresli broke it down to three levels; oil quality, demand and supply and finally market share.
He explained that density and percentage of sulfur component in oil plays a major role in promoting it. "Second element of competition is demand and supply, as currently supply is dominant due to increase in production levels in Iran, Iraq and Russia, beside shale oil production in the United States.
"Increasing market share through lowering official price is yet another factor effecting competition," he noted.
On impact of Iran coming back to world market, Bouresli noted that both markets and prices are "psychologically" influenced by statements of Iranian officials, especially after sanctions were lifted.
Iranian oil production climbed last month by the most in almost two decades following the end of international sanctions, according to OPEC. Iran increased output by 187,800 barrels a day to 3.13 million a day in February, the biggest monthly gain since 1997, the Organization of Petroleum Exporting Countries said in its monthly report. Supply from Saudi Arabia, Qatar and Venezuela, which tentatively agreed with Russia last month to keep output steady, was mostly unchanged. The group lowered estimates for the amount of crude it will need to provide this year amid slower declines in production outside the organization.