DUBAI - Growing production from U.S. shale deposits is not a threat to Kuwait due to its higher costs, the country's oil minister Hani Hussein said in remarks published late Monday.
"There is no effect on Gulf crudes from shale oil in the United States as it will take a long time for this crude to have an impact because of its high cost," Mr. Hussein said, according to the official Kuwait News Agency, or KUNA.
"Gulf countries have huge reserves that can be produced at simple costs," he added.
Analysts have previously said that producing oil from U.S. shale is estimated to cost around $50-75 a barrel, while in the Gulf production costs are often less than $20.
Earlier this month, Sami al-Rushaid, the chairman and managing director of state-owned Kuwait Oil Co., said that shale production may lead to a fall in crude oil prices as it cuts into demand, but that prices are likely to stay at about $100 a barrel.
Kuwait, an Organization of the Petroleum Exporting Countries member, has previously said it has begun a study to assess its shale-oil deposits.
In November, the International Energy Agency, which represents key oil consumers, predicted the U.S. would overtake Saudi Arabia as the world's largest oil producer by 2020 thanks to shale output, a forecast which the OPEC secretary general said could undermine its members' spending plans.
OPEC said Tuesday that demand for its members' oil in 2013 will be 100,000 barrels a day lower than previously forecast, as growing output from non-member countries, particularly North American shale oil, eats into its market share.
If the scaled-back forecast proves correct, OPEC could be on track to have its lowest share of the global oil market in more than 10 years. OPEC's move comes as industry experts question whether the producers' group, which has had a decisive influence on the oil market since the 1970s, can maintain its position amid a boom in U.S. oil production resulting from shale-rock drilling technology.
Copyright (c) 2012 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
More from this Author
Most Popular Articles