Oil & Gas

02 Dec 2019

Saudis to Push for Extension of Oil-Production Cuts at OPEC Meeting

02 Dec 2019  by BENOIT FAUCON   

An Aramco oil tank is seen at the production facility at Saudi Aramco's Shaybah oilfield.

Saudi Arabia will push for an extension of oil production cuts through mid-2020 at a producers’ summit this week in an effort to prop up Saudi Aramco’s initial public offering share price, Persian Gulf officials said.

But talks over boosting compliance to agreed cuts — a key condition for the kingdom to deepen its efforts — are being overshadowed by growing unrest in the Middle East.

The Saudi-led Organization of the Petroleum Exporting Countries is set to meet with a 10-nation coalition led by Russia on Dec. 5 and 6 in Vienna to debate to extend a pact to curb production by 1.2 million barrels a day beyond the agreed end of March 2020.

The debate is likely to be heavily influenced by the IPO of state-run Saudi Arabian Oil Co., as Aramco is formally known, which is set to announce the pricing of its shares on Dec. 5 ahead of its roughly $25 billion listing. Fearing that uncertainty could lead to a sharp drop in oil prices, the kingdom wants an agreement to extend production cuts to at least June 2020, Persian Gulf oil officials said.


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