Malaysia agrees to extend oil production adjustments until Dec 31, 2018

KUALA LUMPUR: Malaysia has agreed to extend oil production adjustments until Dec 31, 2018, said Minister in the Prime Minister’s Department, Economic Planning Unit (EPU), Datuk Seri Abdul Rahman Dahlan.

He said the agreement was made in line with the decision to further extend the “Declaration of Cooperation” for another nine months during the 3rd Organisation of the Petroleum Exporting Countries (OPEC) and Non-OPEC Ministerial Meeting held in Vienna, Austria on Nov 30.

“The production adjustments extension is needed to reduce oil inventory to a more reasonable level, which will provide stability and sustainability in terms of price, as well as demand and supply.

“From between January and October 2017, OPEC and NonOPEC countries managed to reduce the inventory level by more than 600 million barrels.

“Based on estimates, the extension of the production adjustments will facilitate the oil market to rebalance itself by end- 2018.

This is one factor why oil prices have firmed up since 2016,” he said in a statement yesterday from Vienna.

Abdul Rahman represented Malaysia at the ministerial meeting, while senior officers from Petroliam Nasional Bhd (Petronas) and EPU attended the technical meetings a day before the ministerial meeting.

Abdul Rahman said during the meeting, he also shared Malaysia’s views on agreeing to extend participation in the production adjustments policy.

He said Malaysia was not keen to see the price of oil reaching US$100 or more per barrel like before.

“Malaysia prefers a stable oil price at a reasonable level as price volatility is bad for national revenue projection.

“A stable and balanced oil price would facilitate economic budgetary planning, whilst keeping inflation in check,” he said.

Abdul Rahman said the meeting also marked the first anniversary of the Declaration of Cooperation between OPEC and Non-OPEC participating countries which was signed in December 2016.

During the inaugural meeting, Malaysia committed a voluntary reduction of its crude oil and condensate production by 20,000 barrels per day. - Bernama