Production may be raised by 200,000 bpd

Kuwait's Minister of Electricity and Water Shaikh Ahmad Fahad Al Sabah said yesterday that the country would raise its current oil production by 200,000 barrels a day over the 2.5 million barrels bpd it currently produces to cool soaring oil prices. He also said Kuwait supports an Opec call to increase output by at least 500,000 bpd to show that the organisation wants to stabilise the market.

Speaking to the press ahead of his departure to Vienna to attend the Opec meeting, Shaikh Fahad said, "Kuwait is currently producing at its full capacity of about 2.5 million bpd but we will have an additional 200,000 bpd when oil wells destroyed in 1991 will be included."

He also said that repairs at Gathering Centre 15 which was destroyed by a huge fire two years ago will be completed next month and the centre will return to normal production.

He said the meeting which is scheduled for today will discuss conditions of the oil market and the prospect of setting a new output ceiling.

But he cautioned that any increase in the price band from its current $22-$28 to the recently suggested range of $26-$34, as suggested recently by Opec President Purnomo Yusgiantoro, "must be studied very carefully as one must bear in mind that prices rise and drop very rapidly."

Industry sources claim that Opec is in fact overshooting the production ceiling by more than three million barrels, estimating that it pumped out an average of 29.75 million barrels per day in August.

"We will call for the proposal to be studied by the strategic committee first to make an objective decision," Shaikh Ahmad said.

The energy minister said that Kuwait was currently pumping oil flat out at about 2.5 million bpd but would have an extra 200,000 bpd spare capacity available next month after the restart of a fire-damaged oil gathering centre, a unit which separates crude from water at an oilfield.

According to senior energy officials, Kuwait plans to increase its output to about 3.5 million bpd by 2010 and 4 million bpd or more by the year 2020.