Kuwait
's oil minister Monday said the country is worried about compliance with
production quotas by members of the Organization of Petroleum Exporting
Countries and will discuss the matter at the group's forthcoming meeting.
Sheikh Ahmad Abdullah Al-Sabah also said the 12-member OPEC group is unlikely
to change production quotas at the next meeting in
Vienna
, scheduled for
Oct. 14, as current oil prices are "comfortable".
Al-Sabah told reporters he isn't concerned about global crude oil demand, but
is worried about OPEC members conforming to production quotas, saying there
have been "slippages here and there".
"Compliance with their (OPEC) quotas is very important," said the
Kuwaiti minister, who is scheduled to meet his Indian counterpart during his
three-day visit to
India
.
Al-Sabah's comments come as some member states produce far more than the amount
allotted to them under OPEC's production quota system. Higher production by any
member could lead to oversupply in the market and hurt global prices.
Last week, the oil minister of
Angola
--an
OPEC member--said the country is still producing 1.9 million barrels a day of
oil, according to the Angola Press news agency. The southern African nation
says its quota is 1.656 million barrels a day, but data from OPEC's general
secretariat show
Angola
's
allocation is 1.517 million barrels a day.
Kuwait
, the fifth-largest oil producer among the OPEC members, is producing
2.2 million barrels a day of oil, which is in line with its OPEC quota,
Al-Sabah said. The country currently has spare capacity of one million barrels
of oil a day, he added.
The minister said the current compliance level among OPEC members is 52% and
75%-85% would be comfortable.
The current price of oil is satisfactory and OPEC members should take more care
to stick to their agreed quotas, OPEC Secretary-General Abdalla Salem el-Badri
said on Sept. 14.
Al-Sabah said current crude prices--which have been in the narrow band of
$70-$80 a barrel for nearly a year--are comfortable, adding that prices are
expected to remain in the $75-$80 a barrel range until January-March 2011.
"The problem with the market is not fundamental; it is sentimental. There
is lot of speculation," he said. "The market is oversupplied. Yet
prices are not going down."
Indian Oil, BP
Al-Sabah
also said
Kuwait
is
interested in acquiring a strategic stake in Indian Oil Corp. Ltd. (530965.BY).
"The (Indian) government is divesting some of its shares, maybe offering a
certain percentage to a strategic investor," he said. "We are very
interested in such a proposal, subject to feasibility studies and economics of
such an offer."
Indian Oil is planning a follow-on public offering by January, through which it
will sell fresh shares equivalent to 10% of its equity. The federal government,
which owns 78.92% of the country's biggest listed company by sales, will
separately sell 10% of its stake via the follow-on offer.
Al-Sabah said
Kuwait
has
discussed with Indian Oil the possibility of increasing long-term crude
supplies to the company, which accounts for 28% of
India
's
installed capacity of 3.76 million barrels a day.
Kuwait
is
currently supplying nine million tons per year to Indian Oil, Chairman B. M.
Bansal said, adding that the company's crude oil requirement is going to rise
as it commissions a 300,000 barrel a day refinery and petrochemicals complex at
Paradip in the eastern state of Orissa.
Kuwait
is
currently the third-largest crude supplier to Indian Oil, Bansal said.
Shares of Indian Oil rose as much 4.2% on the news. They closed 2.6% higher at
INR448.15, outperforming a flat Mumbai market.
Al-Sabah also said
Kuwait
has
no plan to increase its stake in U.K.-based BP PLC (BP).