Oman speaks out against Opec unilateralism

OREANDA-NEWS. Oman has spoken out against Opec's policy- and decision-making processes and said the producer group is refusing to reach out to address market oversupply.

Oman's oil minister Mohammed al-Rumhy said today it is common practice for Opec and non-Opec oil producers to maintain an open dialogue. "That has not happened this time around," he said, suggesting many non-Opec producers would have gladly joined an Opec round table to address oversupply.

But "some prefer to focus on increasing their market share instead of increasing price," said al-Rumhy, who argued some Opec members have a fundamentally different approach to the market than some non-Opec producers.

Al-Ruhmy was speaking during a press briefing in Muscat, two months before Opec's next scheduled meeting in Vienna. The last time Opec met, in November last year, non-Opec producers Russia and Mexico sent representatives ahead of Opec's decision to maintain a production target of 30mn b/d in the face of falling prices.Since then, Russian state-controlled Rosneft's chief executive Igor Sechin used the platform of industry event IP Week in February to criticise a group of Middle East countries within Opec that he said is pushing its own agenda and has destabilised the market.

For its part Opec has more than once stated its wish for dialogue and co-operation with consumers and non-Opec producers, and said in March that "rational planning and a good helping of compromise" could have prevented the oil price collapse that began in June last year.

Oman currently produces more crude than three Opec members — Qatar, Libya and Ecuador — and is the largest producer of oil and gas in the Middle East that is not an Opec member. However, it is one of the Gulf's most vulnerable economies in the current oil price environment. "It is no secret" the oil ministry is concerned about the detrimental impact low oil prices will have in Oman. Muscat's 2015 budget is based on an oil price of \$75/bl, down from \$85/bl last year, yet still significantly higher than prices realized so far this year. Oman produced about 950,000 b/d in 2014 and sector revenue is projected to account for 79pc of total revenue of 11.6bn Omani rials (\$30.1bn) this year. Oman intends to produce 980,000 b/d in 2015.