Limit by Kuwait

Press, Volume CXV, Issue 33753, 28 January 1975, Page 15

Limit by Kuwait

(N.Z.P.A.Reuter—Copyright) 1 ALGIERS. January 27. Kuwait will this year (limit her oil production (strictly to the amount (she can sell. | Her Oil Minister (Mr Abdul; Rahman Al-Atiqi) said yesterday that his Government | would cut output rather than lower prices if world demand remained below production; capacity. So far this year, the Gov-l ernment has been able to sell no more than 2 J million barrels a day — about 10 per cent below the upper limit it has set of 21 million barrels.

For some years Kuwait has been concerned about the need to conserve her oil resources, which are running out faster than those of many other O.P.E.C. nations. The Government has ( already agreed to sell 1.7 million barrels a day to British (Petroleum and Gulf Oil. the 1 two companies which operate (the Kuwait Oil Company fields, at SUSIO.IS a barrel. The Royal Dutch Shell group, which used to buy about half of Gulf Oil’s output from Kuwait, has contracted to buy 100,000 barrels a day initially, rising to 400,000 in coming years, but is having to pay $U510.36 a barrel.

The US2lc-a-barrel discount to BP and Gulf takes account of the 40 per cent stake which they still share in the Kuwait Oil Company. When Kuwait buys out the two companies’ share, they will probably transform this discount into a management fee for the two companies for their continuing technical assistance in running the oilfields, but the more oil Kuwait sells at the higher non-discount price, the higher will be their average earnings per barrel.