PETALING JAYA: Malaysia will continue to cut oil production by 20,000 barrels a day until Dec 31, 2018, as agreed at the 3rd Opec and Non-Opec ministerial meeting held in Vienna, Austria, on Nov 30, 2017, in accordance with the decision to extend the “Declaration of Cooperation” for nine months agreed at the meeting.
MInister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan represented Malaysia in 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 oil inventories 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 and Non-Opec oil producers 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 the end of 2018. This is one of the factors why oil prices have firmed up since 2016.
“During the ministerial meeting, I shared Malaysia’s views in agreeing to extend its participation in the production adjustments policy. Malaysia is not keen to see the price of oil reaching USS100 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,” 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. At the inaugural meeting, Malaysia committed itself to a voluntary reduction of its crude oil and condensate production by 20,000 barrels per day.