Iraqi Opposition Will Respect OPEC Quotas and Stay in Group
By Benoit Faucon
PARIS (Dow Jones) - Iraqi exiles hoping to take the reins of power want the country to respect OPEC's quota mechanism, representatives said after a meeting between Iraqi oil experts and the U.S. State Department at the weekend.
Exiles and representatives of the U.S. State Department agreed Iraq should remain part of the Organization of Petroleum Exporting Countries and should respect its supply cap, said Dara Attar, an Iraqi Kurdish businessman at the London talks.
Reports Iraqis at the talks agreed to stay within OPEC but not be part of its quota system were wrong, he said.
The meeting, held Friday and Saturday, is the fourth meeting on Iraqi oil held between U.S. officials and Iraqi exiles under the auspices of the U.S. State Department.
Hamid al-Bayati, the U.K. representative of the Supreme Council of the Islamic Revolution in Iraq, said Iraq should operate under OPEC's quota mechanism, a process intended to balance supply and demand and influence prices.
"If Iraq wants to increase its production because it needs money for reconstruction, it will have to seek the permission of OPEC", said al-Bayati, who did not take part in the talks.
Attar said Iraq "will automatically remain under quota since it will only be able to produce between 2.2 million and 2.5 million of barrels a day - its pre-war level - after the conflict is ended."
"The OPEC quota for Iraq is 3.5 million barrels a day. I don't expect this level to be reached before three-to-four years", he said. At one point before the 1991 Gulf War, Iraq's quota was 3.5 million b/d.
Saturday's meeting "was only a conference to discuss the (future of Iraqi oil) with no executive role, just an advisory role," he said.
The working group favored production sharing agreements among other scenarios, he added. PSAs usually mean an oil company teaming up with a state-run oil company but fronting up exploration and production costs before taking a cut of the oil revenue.
Monday, the Iraqi oil working group issued a statement saying the country should establish a business environment attractive to investment in its oil and gas resources.
It added there were indications of "great potential for developing gas in Iraq."
"Effort should be made to correct the Saddam's regime regional biases," the statement said.
Contracts signed under Saddam Hussein's regime were with Chinese and Russian companies while a memorandum of understanding has also been agreed with French company TotalFinaElf SA (TOT).
© 2003 Dow Jones Newswires.
Go ahead and discount OPEC's abilities. But since being spanked in 1998 they have kept prices in the range pretty damn well especially considering the impact of 9/11.
stockcharts.com[d,a]declyiay[d19990408,20030408][pb50!b200!d20,2!b10][vc60][iUb14!La5,7,19!Lc20!Lh14,3!Ld20!Lf]&pref=G |
