Oil men disagree about sharing output cuts

Press, 21 April 1986, Page 6

Oil men disagree about sharing output cuts

NZPA-Reuter Ge neva O.P.E.C. Oil Ministers have split over fie first concrete proposalio emerge from five flys of emergency talks in cutting their produaon to boost collapsed pites.

The Ministers s were divided 10-3 expert committee ‘report that proposed an UP.E.C. production ceiling (if just over 16 million b<rels a day, delegates saidyesterday. I

The 13-memberprgan-isation of the Peroleum Exporting Countrfes has an official daily cijing of 16 million barris but Ministers admit thly. have been producing cbser to 17.5 million. $

The new proposal would mean shariig cuts

of 1.5 million barrels. Previous meetings have foundered on efforts to assign cuts among O.P.E.C. members, all of whom are drastically revising their Budgets because of the loss in oil revenue.

O.P.E.C. over-produc-tion has flooded the market with oil and sent prices plummeting to just above SUSIO a barrel from SUS2B a barrel in December.

Delegates said no formal vote was taken and Ministers would pursue the debate on production limits when the conference resumed today.

Three “hard-line” States — Libya, Iran, and Algeria — rejected the proposal, which essen-

tialiy confirms the present flouted ceiling, saying market supplies must be cut much further to force up prices. The hard-liners want daily production cut to 14 million barrels to drive up prices to the official O.P.E.C. level of SUS2B a barrel.

They forced through agreement on returning gradually to this official price during nine days of emergency talks, which were suspended on March 24 and resumed last week.

But both production targets ignore fundamental problems that have plagued O.P.E.C. for almost three years: how to assign individual production cuts among members and have them honoured.