Oil accord close

Press, 20 October 1986, Page 8

Oil accord close

NZPA-Reuter Geneva O.P.E.C. was yesterday near an elusive agreement to restrict output of oil in pursuit of its stated aim to push up the price of the barrel by about 25 per cent by the end of December.

But participants at the Geneva meeting of the oil cartel, whose deliberations have stretched out to a record 14 days, said serious obstacles remained to an agreement to renew production quotas. These are essential if the price is to rise in the prevailing glut. Spokesmen said less wealthy members of the Organisation of Petroleum Exporting Countries, such as Nigeria and Venezuela, failed to see why they should accede to the wish of Kuwait for a 10 per cent rise in its present quota.

Gulf sources said the Saudi Arabian Oil Minister, Ahmed Zaki Yamani, apparently supported Kuwait, a Saudi ally.

But Mr Gholamreza Aqazadeh, of Iran, traditionally the leader of a rival O.P.E.C. camp, said he favoured higher quotas only for the smallest producers, Gabon and Ecuador. If O.P.E.C. did raise the present over-all production ceiling of about 17 million barrels a day by very rnuch, prices could slip from their present SUSI 4 a barrel.

A period of ruinous over-production this summer, before the cartel introduced output nfstrictions, sent prices finder

SUSIO. But O.P.E.C. now says it aims to continue to throttle output sufficiently to reach SUSI 7-19 by January. Most of the conference has been taken up with the 13 exporters trying to meet demands by Saudi Arabia that a set of new, permanent output quotas be fixed, based on such economic criteria as oil reserves and population. That goal has eluded O.P.E.C. for years. It had last week's talks deadlocked until Iran proposed a compromise of extending the present make-shift quotas to the end of the year while work proceeds on permanent quotas. Saudi Arabia consented to that on Saturday, but proposed conditions: that none of the exporters cheated: none sold oil for under SUSIB and that it receive a higher quota from January under the new arrangements that it demands.

Mr Aqazadeh welcomed the Saudi move “as a positive response to the proposals of the Islamic Republic of Iran.” But delegates said Iran felt it would be unwise of Kuwait to press its demand for a higher quota. Feverish bargaining is going on in Ministers’ suites at the conference hotel, overlooking Lake Geneva, to try to resolve the Kuwaiti problem. Delegates said another wealthy Gulf State, Qatar, also thought it should get a higher quota, which further complicated negotiations.