Muscat, Oman: Oman’s Minister of Oil and Gas, Mohammed Al Rumhy, hit out at the Organisation of Petroleum of Exporting Countries (Opec) on Monday, labelling their decision to choose market share over revenue as “wrong”.
Last November, 12-member Opec, which produces about a third of the world’s oil, decided to keep oil production flat at 30 million barrels day at a time when prices had declined due to a global excess of oil.
“I think they’re wrong those who are sticking to market share and reducing their income by half,” Al Rumhy said in Muscat at the ministry’s annual media briefing.
“I would rather reduce my production by 5 to 10 per cent and increase my revenue by 100 per cent. It’s a simple arithmetic as far as I’m concerned,” he added.
Brent, the global marker for crude, fell from a June 2014 high of about $115 a barrel to touch $45 in January 2015. On Monday, Brent was trading at $58.96 a barrel, up 1.88 per cent at 2pm local time. The global glut that has driven down oil prices is due to weaker demand, particularly out of China, and increasing US shale production.
Al Rumhy has been a vocal of critic of Opec since it chose market share over revenue and on Monday said he struggled to understand Opec’s decision and their unwillingness to engage with non-Opec members.
“The common practice was dialogue between Opec members and between Opec and non-Opec countries … That has not happened this time around,” Al Rumhy said.
“In the past … non Opec exporting countries were quite willing to sit with Opec countries to find solutions to massive decline of oil price and I see no reason why this time around there would not be positive reaction should there be an initiative to bring [everyone to] one table and discuss what ought to be done to address the oversupply problem,” he added.
Oman pumped 943,000 barrels a day in 2014 and is the largest Middle Eastern oil producer that is not an Opec member, according to the US Energy Information Administration. Oman’s oil and gas production accounted for 40 per cent of the country’s gross domestic product (GDP) in 2014, according to Al Rumhy, who said sustained low oil prices “is a concern” for the country.
“It’s no secret that the current oil price will make it difficult for us to sustain our budget in the coming years,” he said.
