OPEC set to cut production by 1 million barrels per day
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SPECIAL TO WORLD TRIBUNE.COM
Tuesday, November 6, 2001
ABU DHABI Ñ OPEC appears to be leaning toward a consensus for a one
million barrel per day cut in oil production.
The figure is a compromise between those members who want a cut of up to
three million barrels and Arab allies of the United States who support a
much smaller decrease in production. Production is currently set at 23.2
million barrels per day.
OPEC secretary-general Ali Rodriguez said a cut of 1 million barrels per
day is an option. But he stressed that such a decision will be made when
OPEC oil ministers meet in Vienna on Nov. 14.
A key concern by OPEC is the refusal of outside producers to cut
production. Qatari Energy Minister Hamad Al Attiya said a price war could
erupt with non-OPEC producers unless the two sides cooperate.
"OPEC cannot act without strong support from producers outside the
organization, especially since its market share is less than 40 percent,"
Attiya said.
Oil prices have dropped about 30 percent over the last six weeks. In
London, oil hovered around the $20 a barrel market. OPEC has a target price
of $25 a barrel.
Meanwhile, Iraq has launched negotiations with undisclosed companies
for the construction of an oil pipeline to Syria.
A contract could be awarded to at least one of the companies over the
next three months. The pipeline would be able to transport 1.4 million
barrels of oil daily and provide Iraq with a huge source of revenue outside
of the framework of the United Nations oil-for-food program.
"We might agree this year on the companies which will execute the
pipeline," Iraqi Oil Minister Amir Rashid said. "We have already begun
consultation with some companies to construct the pipeline."
A year ago, the current oil pipeline between Iraq and Syria was reopened
after 19 years. Iraq is believed to pump more than 200,000 barrels of oil
daily from the Iraqi oilfields of Kirkuk to the Mediterranean port of Banyas
in Syria.
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