World Tribune.com

Donate

OPEC set to cut production by 1 million barrels per day

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.

Print this Article Print this Article Email this article Email this article Subscribe to this Feature Free Headline Alerts