OPEC capacity could rise by 2.4 million BPD by 2007: Report

OPEC, straining to increase production, is set to add 400,000 barrels per day of capacity this year and slightly more than 2.0 million bpd from 2005 to 2007, the International Energy Agency estimated on Wednesday as reported by AFP.

The agency gave a string of figures for breaking down possible capacity increases by the Organization of Petroleum Exporting Countries, while noting that statements by OPEC president Purnomo Yusgiantoro had been contradictory and confusing and that data was subject to a wide margin of uncertainty.

In a summary, the agency stated: "OPEC crude supply averaged 29.1 million barrels per day in July, including 2.0 million barrels per day in Iraq.

"OPEC-10 (excluding Iraq) supply was 27.1 million barrels per day, versus 25.5 million barrels per day target.

It said that total OPEC production increased by 450,000 barrels per day in July to an average of 29.1 million barrels per day, with Iraq increasing its production by more than 300,000 barrels per day.

Separately, a survey by the Platts energy industry information firm released Wednesday found that OPEC-10 pumped on average 27.72 million bpd in July and total OPEC production reached 29.67 million bpd.

The IEA said: "Saudi Arabia is assessed to have increased supply by over 100,000 barrels per day compared to June." Libya, Nigeria and the United Arab Emirates increased output more modestly but production by Venezuela and Indonesia fell. However: "All producers barring Saudi Arabia and the UAE were operating within 100,000 barrels per day of sustainable capacity in July."

"OPEC spare capacity is 1.2 million barrels per day, though effective levels are lower at around 500,000 million barrels per day. "An extra 1.5-2.0 million barrels per day of surge capacity may be available. OPEC capacity is set to gain 400,000 barrels per day by the end of the year and a further 700,000 barrels per day in 2005."

In a more detailed breakdown of OPEC spare capacity, the report gave a figure for capacity added in 2004 of 370,000 barrels per day and in 2005 of 680,000 barrels per day.

"The report estimates total spare capacity, based on July production levels, at around 1.2 million barrels per day although effective spare capacity excluding Iraq, Venezuela, Nigeria and Indonesia was less than half this level.

"A further 1.5-2.0 million barrels of short-term surge capacity could be available. "The latest OPEC statement also indicated that OPEC members were planning to add a further 1.0 million barrels per day of spare capacity towards the end of this year and into 2005." The IEA said that this was in line with its assessment. But it also remarked: "The concept of spare capacity additions clouds the issue somewhat. Extra spare capacity can be made available either by investing in new capacity, by reducing actual production or a combination of the two."

In yet another breakdown, the IEA presented a graph suggesting that OPEC capacity might increase by about 400,000 barrels per day from the second to fourth quarters of this year and then by slightly more than 2.0 million barrels per day from 2005 to 2007, making a total of 2.4-2.5 million barrels in the next three and a half years. (*)