Oil talks forecast

Press, Volume CXIII, Issue 33413, 20 December 1973, Page 15

Oil talks forecast

(N.Z.P.A -Reuter—Copyright)

VIENNA,

December 19.

All existing oil-price agreements will be scrapped this week-end, and future prices will depend on supply-and-demand factors, according to Dr Ramsey Michelena, director of economics at the Venezuelan Ministry of Mines and Hydrocarbons, who said in Vienna yesterday that the Ministers for Oil of the 12 largest oilexporting nations, who are meeting in Teheran on Saturday, would set higher price guidelines there, to come into effect on January 1.

•‘There is no doubt that oil prices will go up,” Dr Michel-

jena said. “We are now discussing the levels.” Members of the economic commission on which all 12 O.P.E.C. countries are represented will go to Teheran before the week-end to report personally to the Ministers. Dr Michelena said that all ■ O.P.E.C. members had now 1 agreed that the existing base- ■ price agreements negotiated Iby them with Western oil icompanies in Teheran. Tripoli, and Lagos in 1971 ceased ■to exist, and would not be I renewed.

These agreements, originally intended to remain in force until the end of 1975, set standards which provided price criteria for most of the world’s exported oil. Talks between Gulf area producing nations and 13 Western oil companies broke down in Vienna last month, when the producers insisted on a market-oriented mechanism for oil, instead of fixed prices as laid down in the 1971 agreements. i Dr Michelena said that

| under the supply-and-demand ! mechanism favoured by the i 0.P.E.C., prices could be adjusted at monthly or quarterly intervals, “and could go up or down, or remain the same.”

The Ministers would fix prices this week-end for oil from the Gulf States—Abu Dhabi, Iran, Iraq, Kuwait, Qatar, and Saudi Arabia—and that these prices would serve as guidelines for all other members of the O.P.E.C. (Algeria, Ecuador, Indonesia, Libya, Nigeria, and i Venezuela). Between them. O.P.E.C. members supply 85 per cent of the world’s exported oil.