Badri: OPEC says shale ‘not a challenge’

Oil prices have slid to near six-year lows in recent months as a result of a large supply glut. (File Photo: AP)

The Organization of the Petroleum Exporting Countries (OPEC) Secretary-General said on Sunday that its exporters could not “subsidize” shale, a source of energy whose growing output in recent years is blamed by the group for weakening oil markets.

Abdullah al-Badri added in remarks to a conference in Bahrain that tight oil, a term he has used for shale, was “not a challenge for us” but he suggested the market should now decide which source of petroleum could survive at current prices.

Oil prices have slid to near six-year lows in recent months as a result of a large supply glut, due mostly to a sharp rise in U.S. shale production as well as weaker global demand.

“We welcome tight oil ... but this source of energy costs too much to produce. You cannot produce it at $70-$80 or $90, you need $100 plus to produce, sell it and make income out of it,” Badri said.

“OPEC cannot subsidize another source of energy – if we reduce [production] in November we will reduce in January. We will reduce in December. We will reduce maybe for another four to five years,” he said.

“We cannot every time keep reducing our production, it [tight oil] is not a challenge for us ... we welcome it, but let the market decide now.”
 

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Last Update: Wednesday, 20 May 2020 KSA 09:44 - GMT 06:44
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