VIENNA, AUSTRIA – FEBRUARY 29: A general view of signage at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) on February 29, 2024 in Vienna, Austria. (Photo by Thomas Kronsteiner\/Getty Images) Photographer: Thomas Kronsteiner\/Getty Images Europe <\/p>\n
(Bloomberg) — OPEC+ set out its methodology for a sweeping review of how much members will be capable of pumping in years ahead, turning to a consultant that once audited the reserves of Saudi Aramco.<\/p>\n
The Organization of the Petroleum Exporting Countries and its partners launched the latest audit in May, in an effort to align output quotas more closely with members\u2019 actual abilities. The updates would take effect in 2027. They will use Dallas-based DeGolyer and MacNaughton Corp. for the majority of the work.<\/p>\n
Most Read from Bloomberg<\/p>\n
The question of \u201cmaximum sustainable capacity\u201d is delicate one for the alliance, as some countries \u00a0\u2014 like the United Arab Emirates and Iraq \u2014 have expanded their production capacity, while others are struggling to stop theirs from declining.<\/p>\n
It\u2019s also an increasingly pressing one. Global oil markets are shifting into an oversupply that threatens further downward pressure on prices, and could compel OPEC+ to make new production cutbacks next year. More realistic quotas would make such curbs more credible.<\/p>\n
READ: OPEC+ Nations Again Face Thorny Issue of How Much They Can Pump<\/p>\n
DeGolyer and MacNaughton, a leading consultant on petroleum engineering, conducted the audit of Saudi Aramco\u2019s vast oil reserves in 2019 while the the kingdom\u2019s state-run giant prepared for its initial public offering.<\/p>\n
While the consultant is set to review most of the OPEC+ coalition\u2019s 22 members, an Indian firm will be selected for Russia and Venezuela, delegates said. Iran opted for the option of having the average of its production in August, September and October be used as its baseline, a delegate said.<\/p>\n
The three countries \u2014 which are all subject to some form of western sanctions on their oil trade \u2014 had raised reservations on letting certain foreign firms scrutinize their respective energy industries, delegates said last week.<\/p>\n
90 Days<\/p>\n
Maximum sustainable capacity will be define as the output that can be achieved within 90 days and maintained for a year, one meeting attendee said.<\/p>\n
The audit process has caused friction for the coalition in the past, with a review in 2023 ultimately causing OPEC nation Angola to leave the group, severing decades of membership.<\/p>\n
For much of the 1990s and early 2000s, OPEC applied pro-rata changes to existing output targets. Over time, that to a similar problem to the one they face now \u2014 quotas no longer reflected the production capabilities of the group\u2019s members.<\/p>\n
By October 2006, the situation had become so bad that the ministers decided at a special consultative meeting held in Doha that new output targets would be based on secondary source estimates of actual production for the month just ended.<\/p>\n","protected":false},"excerpt":{"rendered":"VIENNA, AUSTRIA – FEBRUARY 29: A general view of signage at the headquarters of the Organization of the…\n","protected":false},"author":2,"featured_media":71223,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[35779,6909,102,104,103,35775,35773,35706,35777,35772,35776,35774,35778],"class_list":["post-71222","post","type-post","status-publish","format-standard","has-post-thumbnail","category-dallas","tag-austria","tag-bloomberg","tag-dallas","tag-dallas-headlines","tag-dallas-news","tag-degolyer-and-macnaughton","tag-opec","tag-organization-of-the-petroleum-exporting-countries","tag-production-capacity","tag-saudi-aramco","tag-sustainable-capacity","tag-the-organization-of-the-petroleum-exporting-countries","tag-vienna"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/71222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=71222"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/71222\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/71223"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=71222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=71222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=71222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}