OPEC crude oil production capacity less than expected – PIW

According to Petroleum Intelligence Weekly (PIW) of 23 September 2002, OPEC capacity is less than it appears. A sustained period of high oil prices and tight OPEC quotas have led to low investments; consequently the OPEC surplus capacity is not as high as it may seem.

Several OPEC members, including Iran, Indonesia and Venezuela, have lost production capacity in 2002, as natural geological declines have not been countered by new field discoveries and as a result of a lack of well work-over activities. A smaller number of OPEC members, Algeria and Nigeria, are increasing their potential.

 

The changes have been:

OPEC Country Mbd Change          Mbd Capacity September 02

Iran    - 0.300  3.750

Iraq    - 0.250  2.850

Kuwait - 0.150  2.250

Libya   - 0.100  1.350

Indonesia          - 0.050  1.225

Venezuela          - 0.050  2.750

UAE    - 0.050  2.400

Algeria + 0.170  1.050

Nigeria + 0.100  2.500

Qatar  + 0.050  0.800

Saudi Arabia          + 0.025  9.525

Total   - 0.600  30.450

 

The latest PIW assessment of 30-days’ start-up capacity shows a 0.6 mbd reduction since end 2001. While surplus OPEC capacity, including Iraq, would still appear to be just over 5 mbd, the volume likely to be available is at best 4 mbd. Reasons for the decline are lack of funds for work-overs in existing Venezuelan fields; project delays in Iran, and major damage from an explosion and fire in north western Kuwait. Multilateral sanctions against Iraq and US sanctions on Libya and Iran have inhibited the inflow of equipment and capital needed to maintain capacity and develop new fields.

 

OPEC crude oil production and quotas can be viewed here.