Kuwait agrees to cut back oil production
Copyright c 1998 Nando.net
Copyright c 1998 Reuters News Service
KUWAIT (June 9, 1998 09:32 a.m. EDT
nando.net) - Kuwaiti Oil Minister Sheikh Saud
Nasser al-Sabah on Tuesday publicly backed an
initiative led by Saudi Arabia to trim world supplies in
an attempt to boost sagging prices.
Sheikh Saud, after nearly two hours of talks with
visiting Saudi Oil Minister Ali Naimi, said Kuwait was
ready to cut output as part of a collective effort to lift
oil prices languishing at their lowest level for 25 years
in real terms.
Kuwait had informed Naimi of "Kuwait's readiness to
cut its production. It will be announced soon after
consultations with the government," Sheikh Saud told
reporters.
The size of the cut could be between 50,000 and
100,000 barrels per day (bpd), Saudi said. Kuwait's
current production is more than two million bpd.
"It is in the interest of everybody to take a cut ... It is a
necessity being dictated to us by the market," the
Kuwaiti minister said.
Naimi, who later left Kuwait for Iran where he is
expected to meet Iranian Oil Minister Bijan
Zanganeh, said the talks were successful and laid the
basis for more cuts by Organization of Petroleum
Exporting Countries ministers who will meet in
Vienna on June 24.
"I would like to stress to you that my visit here was
100 percent successful and this was expected,"
Naimi said.
"I am confident that in addition to the Amsterdam
agreement for 450,000 bpd there will ... be further
cuts at the OPEC meeting," added Naimi, who has
day-to-day control over policy in the world's largest oil
producer and exporter.
Naimi's unprecedented lobbying of Gulf oil states is
aimed at mustering support for a deal hatched in
Amsterdam on June 4 which committed Saudi
Arabia, Venezuela and Mexico to shave another
450,000 bpd from world supplies.
On Sunday Naimi made a lightning visit to the United
Arab Emirates, Qatar and Oman. Only Qatar has
pledged specific production cuts -- 20,000 bpd from
July 1.
The UAE and Oman have both said they supported
the Amsterdam agreement but have not offered
specific cuts.
Venezuelan Oil Minister Erwin Arrieta, a key mover
behind the "Amsterdam Pact," on Monday called for
producers inside and outside OPEC to cut output by
750,000 bpd -- just over one percent of world supply.
Sheikh Saud was reported last week as saying he
supported any measure that would boost prices but
cuts would have to be decided after a meeting of Gulf
Cooperation Council (GCC) oil ministers in Riyadh
on June 16.
Naimi was due to arrive in Tehran at around 7 p.m. to
meet Iranian Oil Minister Bijan Zanganeh, an OPEC
source said. He will stay overnight in the Iranian
capital before leaving on Wednesday, the source
added.
It will be Naimi's first visit to the Islamic republic.
An Iranian oil ministry official last week welcomed the
Amsterdam agreement but was quoted by the official
news agency IRNA as saying that the issue of further
cuts would be discussed at OPEC's next ministerial
meeting in Vienna on June 24.
Oil exporting countries were "being practically
strangulated ... oil at present prices is being
plundered not sold," the English-language Tehran
Times newspaper said in its leading opinion column
on Tuesday.
Co-operation between Saudi Arabia and Iran was a
"must for rescuing oil prices," the daily said, adding
that non-OPEC countries must all help the effort to lift
prices.
Saudi Arabia is the world's largest oil producer and
exporter. Iran is the third largest exporter behind
Norway.
Traders will be closely watching whether Kuwait and
Iran will offer additional cuts. Both states have
already said that they support the principle of lifting
oil prices but have not yet offered concrete cuts.
Oil prices have remained some $5 below last year's
average despite the Riyadh and Amsterdam deals.
By ASHRAF FOUAD, Reuters
nando.net
Mexico to cut oil exports further in July
Copyright c 1998 Nando.net
Copyright c 1998 Reuters News Service
MEXICO CITY (June 8, 1998 5:20 p.m. EDT
nando.net) - A second cut of 100,000 barrels
per day from Mexico's crude exports will affect some
long-term crude contracts, Energy Minister Luis
Tellez said on Monday.
Mexico agreed to cut another 100,000 bpd from its
exports as of July 1 in a meeting with Saudi Arabia
and Venezuela in Amsterdam on Thursday, for total
cuts from the three of 450,000 bpd.
"I can't say exactly how because (oil monopoly)
Pemex is still working on it and we just reached the
agreement, but our intention is to reduce the effect on
clients," Tellez said. He later told Reuters that the
cuts would effect "some" clients.
Energy officials said the first 100,000 bpd cut,
effective as of April 1, would be shaved off of extra
crude shipments above contracted levels, and would
not affect long-term contracts to clients.
Tellez did not say what types of crude would be cut,
nor would he detail which clients could be affected.
"We are working with our clients to minimize the
effect of our reduction. Most of our clients are
refineries in the Gulf Coast that refine heavy crude,"
he added.
Mexico pledged in both Amsterdam and earlier in
Riyadh to cut its exports, not production.
Tellez said production would likely slide because of
the second series of cuts, noting that Mexico's
minimal storage capacity would force lower output.
But he reiterated that internal demand would help sop
up some extra crude production, referring to a
greater demand for fuel oil at power plants as the
nation's drought has depleted water reserves for
hydroelectric plants.
In April, Mexico exported 87 percent of its crude to
the United States, nine percent to Europe and four
percent to the Far East, according to the latest
Petroleos Mexicanos (Pemex) figures.
By TIMNA TANNERS, Reuters
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