The Hindu Business Line : Kuwait expects crude to stabilise at $65-70

Kuwait, one of the major oil producers of West Asia, expects crude prices to stabilise at $65-70 a barrel. Speaking to newspersons on Thursday, Kuwait's Oil Minister, Sheikh Ahmad al-Fahd al-Sabah, also said that demand in winter is likely to be lower than the year before.

Crude oil prices were at $75 a barrel in late April due to tensions between the West and Iran over the latter's nuclear programme and on supply disruptions in Nigeria. The prices have since fallen below $70 a barrel.

"Now the prices have started to decrease. However, we believe still the geopolitics problem will play a major role because of the situation in Iran and Iraq and the other regions. I hope global oil prices will be more stable."

The Minister is accompanying Kuwait's Emir Sabah al-Ahmad al-Sabah on an official visit to India this week.

Import bill

India's oil import bill swelled 52 per cent to $44.64 billion in 2005-06 on the back of high global oil prices.

The country imported 99.4 million tonnes of crude oil for $38.77 billion (Rs 171,702 crore) and 11.67 million tonnes of petroleum products for $5.86 billion (Rs 25,575 crore) during the year, according to latest Petroleum Ministry data.

In 2004-05, India spent $25.98 billion (Rs 117,006 crore) on import of 95.86 million tonnes of crude oil and $3.28 billion (Rs 14,930 crore) on import of 10.47 million tonnes of petroleum products.

FAIR PRICE

On the suitable price of crude, the Kuwait Oil Minister said: "I think the fair price of oil would be that which would be acceptable to both consumer and producers. The stable price should be$45-$55 a barrel."

Kuwait also plans to sell more crude to India. It is targeting to sell 3 lakh barrels per day by 2010 from 2.7 lakh barrels a day currently. Of this 2.7 lakh barrels, 2.3 lakh barrles a day of oil is through term contract and the remaining 40,000 barrels is through spot purchase.

As regards participation of Indian oil companies in Kuwait's oil sector, the Minister said Indian companies had been invited to participate in Kuwait's new six lakh barrels a day plant.

The Indian companies can bid up to40 per cent for participation in the project. Regarding Kuwait's participation in Indian refinery sector, he said MoUs had been signed with Indian companies to participate in the sector.

Kuwait would like to participate in refinery upgradation and modernisation projects as well as be the supplier for these projects.He, however, did not disclose the names of the Indian companies with whom MoUs had been inked.