MPs file bill to slash oil output

Legislation demanding Kuwait disclose proven reserves could see gulf state's output drop by three quarters.
MPs file bill to slash oil output
By AFP
Sun 15 Jun 2008 05:24 PM

Opposition MPs filed a bill on Sunday that could effectively slash Kuwait's oil output if it is found that the Gulf state's proven reserves are actually much lower than official estimates.

The proposed legislation, signed by four MPs, stipulates that annual oil output from Kuwait, OPEC's fourth largest producer, should not exceed 1 percent of proven reserves.

It also requires the state to disclose to parliament the emirate's actual proven reserves, which Kuwait says officially stand at about 100 billion barrels, 10 percent of global reserves.

However, some reports say the emirate has inflated its oil wealth and that proven reserves could be as low as around 24 billion barrels.

In the past few years, Kuwait has been producing just under 1 billion barrels per year, 1 percent of the official reserve figure.

If the bill is approved, it could force the emirate to cut its output from 2.55 million barrels per day (bpd) currently to a quarter of that, at a time when the world is demanding higher oil production.

The authoritative industry newsletter Petroleum Intelligence Weekly (PIW) reported in January 2006 that Kuwait's oil reserves stood at 48 billion barrels, based on internal Kuwaiti records seen by the newsletter.

The PIW report also claimed that Kuwait's fully proven reserves amounted to only 24.2 billion barrels.

MPs said the PIW claim is supported by a confidential report issued in 2001 by Kuwait Oil Co., the state's oil exploration and production company.

They also said that the government has since failed to provide credible information about the size of Kuwaiti proven reserves "which raises doubts about the actual size of those reserves".

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