Animosity sours oil talks

Press, 14 October 1986, Page 6

Animosity sours oil talks

NZPA-Reuter Geneva Gulf war developments soured the mood at the Geneva O.P.E.C. conference yesterday as it entered its second week of talks on output quotas. The Kuwaiti Oil minister, Ali Khalifa al-Sabah, was said by delegates to have been angered at a speech by Iran’s Parliamentary Speaker, Ali Akbar Hashemi Rafsanjani, in Teheran accusing Kuwait of subverting efforts by O.P.E.C. to boost prices. Delegates say the task of seeking agreement from the 13 exporters is difficult enough without a resurgence of political rivalries in the Gulf. Mr Rafsanjani was

quoted as saying that Iran’s raid on the Kirkuk oil installations was a timely move “in view of the current O.P.E.C. meeting and the subversion by the Iraqis and the Kuwaitis of the effort to raise oil prices.” Kuwait caused the Organisation of Petroleum Exporting Countries to tackle the complex process of trying to allocate new and permanent quotas, saying that its share under the present makeshift quotas was unfair. Most countries, including Iran, architect of the present accord, earlier tended to favour the simpler solution of extending this makeshift package beyond the October 31 expiry date. The agreement has been suffi-

cient to send prices from below SUSIO ($19.70) in July to SUSI 4 now. Failure to agree in Geneva could send prices back down. The plan now is to try to assign quotas based on member states’ oil reserves, past output and population. Delegates said Ministers face hard bargaining when considering the proposals as there is not much scope for lifting O.P.E.C.’s over-all output ceiling of about 17 million barrels daily to accommodate rival demands to sell, more oil. The conference chairman, Rilwanu Lukman, has repeatedly said that O.P.E.C. is determined to reach an accord at this meeting to drive world oil

prices close to SUS2O ($39.40) a barrel by the end of the year. Delegates said the meeting could postpone a decision on quotas and in a compromise let Kuwait produce more oil within an agreement that would extend the makeshift pact. Kuwait has been the main loser from the interim pact. Its oil revenue in September slipped about 7 per cent compared with July, even though the O.P.E.C. output accords drove prices up and most members collected higher revenues. Some analysts say that if O.P.E.C. can agree on a pact to hold output at present levels, prices will reach SUSI 6 to SUSIB a barrel as the Northern hemisphere winter sets in.