A government decision to slash capital expenditure in Kuwait's oil sector is expected to depress the OPEC member's crude production capacity by nearly one million barrels per day, a local newspaper said on Thursday.

Spending on oil and gas projects in the next five years could be trimmed to nearly 4 billion Kuwaiti dinars ($13.2 billion) due to the spread of Coronavirus and weak oil prices, the Arabic language daily Alanba said, quoting a "responsible" oil source.

The figure is way below the investments needed to maintain Kuwait's current crude output levels of around 11 billion dinars ($35.3 billion), the report said.

"If project spending is maintained at that low level during that period, then the country's oil production capacity will decline from nearly 2.8 million bpd currently to 1.8 million bpd at the end of the five-year plan," the source said.

"This will have disastrous effects on Kuwait's hydrocarbon industry as it means the government will not be able to meet its commitments to clients in the future."

According to the paper, state operator Kuwait Petroleum Corporation, which is in charge of the Gulf country's hydrocarbon sector, had approved five-year capital spending at 27.7 billion ($91.5 billion) before the spread of Coronavirus.

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@refinitiv.com)

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