OPEC sees no danger to its production plans
MOSCOW: OPEC, the Organization of the Petroleum Exporting Countries, said on Monday there would still be demand for its oil despite the shale oil boom in the United States, downplaying concerns the group may lose its market share.
Boom in shale oil production in the United States has changed the global energy landscape, as Washington has ceded its ranking as top global oil importer to China by cutting its import needs.
Next year, the United States is set to overtake Russia as the world’s top oil producer due to the growing non-conventional oil output, the International Energy Agency (IEA) said this month.
Both OPEC and Russia have shied away from showing major concern about their own production plans, saying only that shale oil potential should closely examined.
“Tight oil, as we call it, will come as a new addition to the supply side ... As a matter of fact, this production will go up until 2018 and then it will decline,” Secretary General Abdullah al-Badri told reporters at a Moscow energy conference.
“Our big oil is still there, the world needs more and more crude from OPEC in the future, so shale will not affect OPEC.”
Despite saying it is not worried, Russia has decided to test its own potential for producing shale oil as its conventional resources in West Siberia are depleting.
Earlier this year, Moscow offered tax breaks for tight oil, hoping it would unlock reserves underneath existing production sites previously considered to be ineffective. That would help the country to at least maintain in current oil output at around 10.5 million barrels per day (bpd).
The US resurgence as an oil producer is also reshuffling the cards in the game of world energy diplomacy, playing it a new hand in relations with long-term ally and top OPEC producer Saudi Arabia. OPEC, which pumps more than a third of the world’s oil, meets on December 4 in Vienna to decide whether to adjust its output target of 30 million bpd. Badri declined to comment on the meeting’s possible outcome.
OPEC expects demand for its crude to fall to 29.61 million bpd in 2014, down 320,000 bpd from 2013, due to rising supply outside the producer group. reuters