By Rania El Gamal
'Strategic goals' will be kept but five-year plan under assessment, says oil minister.
OPEC-member Kuwait is assessing investments in the energy sector amid tumbling oil prices and a global financial crisis, but will keep its main strategy unchanged, the country's oil minister said on Monday.
The country plans to spend $55 billion on its oil sector over the next five years to overhaul existing infrastructure and build new capacity. Oil prices have fallen more than $100 from their peak of above $147 in July after the global economic crisis slashed demand for oil.
"There is no doubt that declining oil prices is affecting the whole world and not just Kuwait... There is a study to assess the next plan and its priorities," Mohammed Al-Olaim told reporters on Monday, when asked if Kuwait will revise its five-year investment plan for the oil sector. "We have strategic goals which we will keep... no doubt about that," he added.
In calculating its 2008/09 budget, Kuwait has assumed its crude, the country's main revenue earner, would fetch $50 a barrel in the year to March 31. But Kuwaiti crude plunged to $35.62 a barrel on Friday, after peaking at $135 in July, state news agency KUNA said.
Oil rose towards $43 a barrel on Monday, partly inspired by a weaker US dollar and comments from Saudi Arabia that OPEC supply cuts will succeed in stabilising the market. Olaim said it is still early to judge the effect of OPEC's latest output cut on oil prices.
"The last decision is a good one, but the surplus in the market cannot be contained by one decision. The decision needs time," he said. "We are affected by the global financial market and the global economy's direction is still not good and no doubt that this affects demand level for oil."
The Organization of the Petroleum Exporting Countries, a source of more than a third of the world's oil, agreed last week to its deepest-ever supply cut of 2.2 million barrel per day (bpd) to stem the slide in oil prices.
Kuwait, the world's seventh-largest oil exporter, which has 10 percent of proven global reserves, plans to boost output to 4 million bpd by 2020. (Reuters)