CRUDE OIL/PART 1 - International In Scope
10/30 15:29 - OPEC Renews Oil Producers' Alliance
CAPE TOWN, South Africa, Oct 30 - OPEC and non-OPEC producers on Friday discussed ways of using informal contacts to strengthen future cooperation and help stabilise oil markets, OPEC Secretary-General Rilwanu Lukman said.
Eight oil ministers who met for more than an hour on Friday evening to discuss the issue found a rapport and achieved a very good understandng, Lukman told reporters.
"The idea is to reinforce what OPEC is doing," said Lukman of efforts by the Organisation of the Petroleum Exporting Countries to revive low prices.
He said the meeting, held on the sidelines of an international energy conference in Cape Town, discussed ways of boosting the kind of OPEC and non-OPEC contacts that resulted in unprecedented production cuts earlier this year.
The OPEC-led supply reductions involved pledges to cut output or exports by non-OPEC nations Russia, Norway, Mexico and Oman, among others, in a bold attempt to stem a steep price slide. Friday's meeting gathered the oil ministers of non-OPEC nations Mexico and Egypt with OPEC members Saudi Arabia, the United Arab Emirates, Libya, Algeria, Qatar and Venezuela, plus Lukman.
"The idea of cooperation is not new. We want to strengthen that, without formalising it," Lukman said.
He said the non-OPEC producers who have joined in cuts in concert with OPEC producers had made a very good effort to fulfill their promises.
The joint cuts were the result of the kind of cooperation that Saudi Oil Minister Ali al-Naimi has been advocating for some time, Lukman said.
Naimi promoted the idea again earlier on Friday when he said in a speech to the conference that producers in and out of OPEC should cooperate further to restore balance to the market.
"He did not say he is disbanding OPEC. He did not say we are going to have a new organisation. It is not even going to be a formal organisation," Lukman said.
"We need to have (the involvement of) the major participants -- countries involved in exporting oil in large scale."
"Eight or nine countries are responsible for 80 percent of the exported oil and it is important that if you want to influence the way things are going, you carry these people with you."
10/30 16:10 FOCUS-Saudi Seeks To Strengthen Oil Producer Ties
CAPE TOWN, South Africa, Oct 30 (Reuters) - Oil powerhouse Saudi Arabia said on Friday it wanted to pursue further efforts between producers to reduce boom-and-bust oil price volatility.
Saudi Oil Minister Ali al-Naimi said producers in and out of the OPEC oil cartel should continue cooperating to restore oil prices stranded this year near 10-year lows.
"Recently I have called for a coordinated ad hoc effort both within and outside of OPEC to anchor the market and lessen the impact of its absolute swings," Naimi told an international energy conference in Cape Town.
"I propose we pursue this idea further in this conference among the concerned parties."
Naimi, whose country is the world's largest oil producer and exporter, was addressing ministers and senior officials from more than 40 petroleum-producing and consuming countries.
His message was echoed by Mexico, one of several non-OPEC producers that banded together with OPEC twice this year in an unprecedented effort to revive oil prices.
"I believe that the best strategy that we can all follow in these times of instability and low demand is to continue and strengthen our efforts at cooperation," Mexican Oil Minister Luis Tellez told the conference.
Tellez was part of an informal meeting later on Friday in Cape Town of six OPEC and two non-OPEC nations to discuss the way ahead for oil suppliers.
Saudi Arabia, Venezuela, the United Arab Emirates, Algeria, Qatar, Libya and non-OPEC member Egypt were also present.
"It was a get-together...to review the situation and see how things might go on from here," OPEC Secretary-General Rliwanu Lukman told reporters after the talks.
Lukman stressed that no new organisation was under consideration to supersede OPEC. "The idea of cooperation is not new. We want to strengthen that without formalising it," said Lukman. "The idea is to reinforce what OPEC is doing."
Tellez said agreements drawn up this year involving pledges to siphon 3.1 million barrels per day (bpd) of oil by OPEC and non-OPEC nations had avoided a total breakdown of prices.
"Mexico believes that we should explore ways to expand channels of communication with other oil producing nations," he said.
Non-OPEC producer Norway, like Mexico a participant in the supply agreements, did not join the gathering with OPEC but earlier met with Saudi's Naimi.
Longer term, said OPEC's Venezuela, producers should not rely on supply management as an answer to stable prices.
Venezuela's Oil Minister Erwin Arrieta said a boom-bust cycle in crude prices, dating back to the first oil shock of 1973, had proved damaging for oil-producing and consuming nations alike.
"Although everybody would agree that efforts should be made to avoid roller-coaster price behaviour, it is important to recognise that traditional supply management by the large, low- cost producers can only be viewed as a bridge," Arrieta said.
He said this year's oil prices -- stranded at $13 a barrel for North Sea Brent -- could prove a pointer for difficult times ahead.
"The current market situation seems to be showing angles of what we can expect in the future," he said.
Naimi said supply cuts were an example of cooperation aimed at stabilising markets in an "optimum prices range."
The oil-output reductions helped arrest a 30 percent slide in prices from last year's levels, driven by higher Iraqi production, a warmer winter and Asian economic downturn.
But continued global economic uncertainty has helped keep prices in the bargain basement, curtailing OPEC member countries' budgets and slicing oil companies' share values.
OPEC ministers have said they would review their agreements at their ministerial conference in Vienna on Nov. 25 and decide whether or not to extend it for another six months.
Reiterating a perennial producer theme, Naimi said prices had to remain high enough to pay for continued exploration and development to ensure long-term supplies.
"If the price of oil remains at levels reasonable enough to stimulate demand growth and maintain adequate revenues for producers, the world's economy will prosper," he said.
"But if prices decline sharply and suddenly, there could be dire consequences for all. Production over the long run would decline for lack of investment funds."
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