OPEC to Publish Production Cut Quotas

Contrary to initial reports that OPEC will not make public the country quotas in the new production cut deal, the organization now plans to publish a table of each OPEC and non-OPEC individual quotas in an attempt to inject some positive sentiment in a crashing oil market, OPEC’s Secretary General Mohammad Barkindo wrote in a letter seen by Reuters.

“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo wrote to the members in the letter, Reuters reported.

“I would urge Your Excellencies to kindly make positive announcements reinstating your countries’ commitment to implementing the agreed decisions. This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment,” the letter says.

Earlier this month, OPEC and its Russia-led allies reached a deal to reduce their combined oil production by 1.2 million bpd for six months starting January, and initial hints from the group suggested that it won’t be announcing individual quotas.

The contribution from OPEC in the deal would be 800,000 bpd, equal to a 2.5% cut, while non-OPEC countries would contribute with 400,000 bpd, or a 2.0% reduction, OPEC said in the statement following the meeting in Vienna two weeks ago.

In his letter seen by Reuters, OPEC’s Barkindo says that the effective reduction needs to be 3.02% for member countries in order to reach the 1.2-million-barrel total cut.

Iran, Venezuela, and Libya were exempted from cuts, so other OPEC members had to tweak some quotas to accommodate those three ‘special consideration’ countries.

The detailed table with country quotas is expected to be published by the end of this week.

source: Financial Tribune