Oman to cut oil production as prices remain sluggish
Oman's 45,000 barrels per day [bpd] output cut will be shared by the Gulf state's oil producers on a pro-rata basis, a top official said.
The production cut is part of a deal agreed by OPEC and non-OPEC producers in an attempt to shore up global oil prices".
Oman's under-secretary for Oil and Gas, Salim bin Nasser al-Aufi, said the output cut will be apportioned according to the average production of each company.
In line with this plan, state-owned Petroleum Development Oman [PDO] will be making most of the cuts, al-Aufi said.
Daily oil production in Oman, however, has eased from its October peak due to "natural reasons," al-Aufi said, meaning that providers will be required to cut less than initially expected.
He added that this will not mean a relaxing of activity in the oil sector.
"While we are asking them to comply with the 970,000 bpd [production limit], they must do so without cutting their activities. Thus, regardless of what they're planning to do, they must continue to drill," he explained.
Maintaining high activity levels will allow oil firms to continue increasing capacity for when the current deal ends, the under-secretary explained.
This will put Oman on a good footing for OPEC's next meeting in 2017, when the cartel will decide whether to sustain or relax the output cut, he said.
"This means companies are actually building capacity in the process," Aufi said.
"What we don’t want happening is that if we cut activities to meet the 970,000 bpd target, and come July Opec decides they don’t want to continue with the cuts or reduce the share, and we find ourselves unable to respond to the new production numbers because we cut activities," he added.
Oman pledged last month at a meeting of non-OPEC producers in Vienna to cut around 45,000 bpd from a peak of around 1.015 million bpd. This cut effectively limits the country's production rate to 970,000 bpd
At the meeting of non-Opec producers held in Vienna early last month, Oman pledged to slash around 45,000 bpd from a peak production of around 1.015 million bpd corresponding to its October daily average.
The deal has limited the country's production to 970,000 since 1 January.
Oman has been hit hard by low oil prices, and urged Saudi Arabia and others with larger oil reserves to cut production.