Quota adherence O.P.E.C.’s aim

Press, 12 September 1987, Page 10

Quota adherence O.P.E.C.’s aim

NZPA-Reuter Vienna Three of O.P.E.C.’s leading figures are to visit member States-shortly to try to stop output quota violations which threaten to end the group’s role as arbiter of world oil prices. An O.P.E.C. spokesman, James Audu, told reporters that the decision was taken by five Ministers at a committee session which admitted that group output was above its self-imposed 16.6 million barrel per day (bpd) ceiling. The excess production, caused partly by tension in the Gulf, has threatened to erode the dominant position held by 0.P.E.C., the Organisation of Petroleum Exporting Countries, since the beginning of the year. Industry estimates put O.P.E.C.’s August output at about 19.7 million bpd, which has weighed heavily on an abundantly supplied market and knocked about three dollars off the price of a barrel in the last month. The excess has been caused partly by States

scrambling for revenue when prices rose because of Gulf tension. It was also due to panic production in the Gulf caused by fears of a major showdown in the increasingly internationalised Iran-Iraq war, oil analysts said. The three Ministers to embark on. the tour are Rilwanu Lukman, of Nigeria, the O.P.E.C. conference president; Subroto, of Indonesia and Arturo Hernandez Grisanti, of Venezuela. None of the three countries is thought to be overproducing significantly and Mr Lukman and Mr Subroto have won the industry’s respect as diplomats who have steered O.P.E.C. back to the ascendant role it enjoyed until the 1985-86 oil price collapse. A little over a year ago, world oil prices crashed from over SUS3O a barrel to less than $9 because of huge over-production by O.P.E.C. states and the now-discarded policy of increasing market share rather than prices.