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KUALA LUMPUR, Dec 19 — Petronas will slash oil production in 2017 to between 600,000 and 630,000 barrels per day (bpd), from the average of 693,000bpd in 2015 and 654,000bpd over the past five years, a source with knowledge of the matter told Malay Mail.
The at least 60,000bpd cut from last year's average is larger than analysts expected, with Morgan Stanley predicting only a 20,000bpd cut for Malaysia while the Organisation of Petroleum Exporting Countries (Opec) had initially indicated a 35,000bpd decrease in production.
Malaysia's crude oil production from January to March this year averaged 676,000bpd.
The cut is part of the 558,000bpd in cumulative reductions agreed by Malaysia, Brunei and nine other non-Opec countries on December 10 in Vienna, Austria adding to the 1.2 million bpd cut Opec members had settled at on November 30.
This will take an estimated 1.8 million bpd off global oil production next year, in a bid by oil exporters to drive crude oil prices up from multi-year lows.
Since the November 30 announcement, Brent crude prices have jumped close to 20 per cent and closed at over US$55 per barrel yesterday.
Earlier today, Minister in the Prime Minister's Department Datuk Abdul Rahman Dahlan said the cumulative 1.8 million bpd cut by Opec and non-Opec countries aims to bring oil stockpiles down to the five-year average by the end of next year.
Malaysia and Brunei were the only Asia Pacific nations represented in the seven-hour meeting in Vienna, as Indonesia was suspended from Opec on November 30 for refusing to participate in the initial 1.2 million bpd cut among Opec nations.
The other countries were Azerbaijan, Bahrain, Equatorial Guinea, Kazakhstan, Mexico, Oman, Russia, Sudan and South Sudan.
"Very low oil prices may not be good in the long run for the world economy.
"There have been a lot of social spending cuts within oil producing countries but I believe we have achieved something by providing psychological support for oil prices.
"Of course our biggest challenge would be the response from US shale oil producers. Nonetheless, the objective is reserve supply would be at par with the five-year average by the end of next year," the minister added.
He said that since Prime Minister Datuk Seri Najib Razak took office in 2009, the country's dependency on oil income has dropped from 41 per cent of all revenue to 14 per cent this year.
"The situation would be much worse if we had not embarked on economic transformation programmes and been more dependent on oil," Abdul Rahman said.