Malaysia to extend oil output cut to end-2018

PETALING JAYA: Malaysia will continue to reduce oil production by 20,000 barrels a day until Dec 31, 2018, as agreed during the 3rd Opec and non-Opec ministerial meeting held in Vienna, Austria, on Nov 30, 2017.

This is in accordance with the decision to extend the “Declaration of Cooperation” for nine months.

Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan represented Malaysia at the ministerial meeting while senior officers from Petroliam Nasional Bhd (Petronas) and the Economic Planning Unit attended the technical meetings a day before that.

In a statement released on Saturday, Abdul Rahman said the production adjustments extension is needed to reduce the oil inventory to a more reasonable level which will provide stability and sustainability in terms of price, as well as demand and supply.

For the period between January and October 2017, Opec (Organisation of Petroleum Exporting Countries) and non-Opec oil producers managed to reduce the inventory by more than 600 million barrels. Based on estimates, the extension of the production adjustments will facilitate the oil market to rebalance itself by the end of 2018. This is one of the factors why oil prices have firmed up since 2016.

Last week’s meeting marked the first anniversary of the Declaration of Cooperation between Opec and non-Opec participating countries which was signed in December 2016. At the inaugural meeting, Malaysia committed a voluntary reduction of its crude oil and condensate production by 20,000 barrels per day.