Saudi campaigns for Gulf Arab oil output cuts
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Copyright c 1998 Reuters News Service
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DUBAI (June 7, 1998 4:08 p.m. EDT nando.net)
- Saudi Oil Minister Ali Naimi toured key Gulf Arab
states on Sunday to drum up support for a round of
oil production cuts aimed at boosting world oil prices.
Naimi visited Qatar, Oman and the United Arab
Emirates (UAE) and a non-Saudi OPEC source said
he was due to travel to Kuwait though Kuwait airport
officials said he had not arrived in the Gulf Arab
state.
Naimi's tour has secured a pledge by OPEC
member Qatar to cut its production by 20,000 barrels
per day from July 1, while Oman expressed strong
support but fell short of announcing a commitment.
The UAE confirmed the visit but gave no details of
Naimi's meeting with his counterpart and OPEC
President Obeid bin Saif al-Nasseri.
Nasseri said earlier he was not happy with current oil
oil prices and that intervention might be needed if
prices stayed low.
Saudi Arabia has called on other oil producers in
addition to the backers of Amsterdam deal it
reached on Thursday with Mexico and Venezuela, to
shave production in a move to lift oil prices, now at
their lowest level in real terms in a quarter of a
century.
"We will cut our oil production by another 20,000 bpd
from the first of July," Qatar Oil Minister Abdullah bin
Hamad al-Attiyah told reporters after seeing off the
Saudi Oil Minister.
The moves follow a first round of cuts from April 1
which saw some 15 producers inside and outside
OPEC agree to cut around 1.5 million bpd. Qatar
sliced 30,000 bpd.
"The cut is in support of the agreement reached in
Amsterdam and Riyadh between Saudi Arabia,
Venezuela and Mexico," Attiyah said.
Saudi Arabia, Venezuela and Mexico agreed after
secret talks in Amsterdam last Thursday to cut
450,000 bpd from their current production.
Saudi Arabia, the world's largest producer and
exporter, said it would slash 225,000 bpd, Venezuela
125,000 bpd and Mexico 100,000 bpd from July 1.
Omani Oil Minister Mohammad bin Hamad bin Seif
al-Ramhi told Reuters his country supported the
initiative of the three countries in Amsterdam and
was seriously reviewing the issue.
"No decision has been made one way or the other. In
principle Oman has always supported stability of oil
prices," Ramhi said by telephone from Muscat.
"We are looking into how the whole thing will develop
... If there is added value in production cuts, we will
consider it. We will wait to see what happens with the
others," he said.
Oman, a major Gulf Arab oil producer but not a
member of the Organization of Petroleum Exporting
Countries, is regarded as a critical barometer of
whether producers are willing to swallow deeper
output cuts in the hope of higher prices.
Oman earlier this year pledged to cut its own output
by 30,000 bpd as part of the Riyadh Pact in March.
Norway, the world's second largest oil exporter after
Saudi Arabia, has said it is not considering any
further output cuts though Iran has said it was willing
to consider reducing flows as part of a collective
effort.
Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah
on Saturday was reported as saying Kuwait might
consider further output cuts after the GCC meeting.
Influential oil producers in the Gulf Cooperation
Council (GCC) -- Saudi Arabia, Kuwait, United Arab
Emirates, Qatar and non-OPEC states Bahrain and
Oman -- are scheduled to meet in Riyadh on June 16
to discuss a concerted move to prop up prices.
World oil prices have remained soft despite cuts
because of brimming storage tanks. North Sea Brent
crude futures for July delivery closed on Friday at
$14.60 a barrel, compared to an average price in
1997 of $19.10.
OPEC oil ministers are scheduled to meet in Vienna
on June 24 to discuss further cuts in addition to the
pledges made by Saudi Arabia, Venezuela and
Mexico in Amsterdam.
By YOUSSEF KASSEM, Reuters
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