CRUDE OIL/PART 1 - International In Scope
10/28 Kuwait for More Oil Output Cuts to Balance Market
KUWAIT, Oct 28 - Kuwait appears set to demand a third round of oil output cuts when it consults with oil producers on Wednesday on steps needed to boost world crude prices.
"Let us see what is the point of view of the brothers ... but there must be seriousness on this issue," Kuwait Oil Minister Sheikh Saud Nasser al-Sabah said before flying to South Africa where he will meet OPEC and non-OPEC counterparts.
When asked if producers had any other option but a third round of cuts to achieve the target price of $17 for a barrel of benchmark Brent, the hawkish minister said:
"We tried cuts and the price is still low ... let us see what other options the brothers might have."
Sheikh Saud told Reuters on Tuesday that world markets were still oversupplied and vowed to support a third round of cuts.
"The bottom line of this whole thing is that there is too much oil in the market...If it takes a cut in production to improve prices, we are for it.
"Cutting production should not be limited to OPEC members only. Non-OPEC (members) should also comply and cooperate with any decision taken by us," he added.
The Kuwaiti minister, whose country currently has an OPEC quota of 1.98 million barrels per day (bpd), has repeatedly said that for Kuwait it was a matter of price and not output volume.
Brent at around $13 a barrel is some $6 below last year's average, a situation dominating the build-up to this week's Cape Town informal gathering of ministers from about 50 major oil producing and consuming nations.
Sheikh Saud said on Tuesday: "It is not just our target. It is the target of every member of OPEC. When we decided to cut (production) last June our expectation were that (by November) crude would reach $17 provided every body (complied with pledged) cuts.
"This is something shared by everyone and this was the target and the reason for the cuts," he added. "The prices today are absolutely unacceptable to everyone."
But prices dropped further on Tuesday as traders concluded that the talks between OPEC and non-OPEC states offered little prospect of more output cuts.
Earlier this month, Kuwait warned other oil exporters of a production war if they failed to comply with already pledged cuts, adding that Gulf Arab allies could flood the market.
Kuwait, which controls just under 10 percent of proven world oil reserves, has so far this year cut its production by 225,000 bpd as part of two collective accords to reduce supply to world markets by 3.1 million bpd.
Turkey, Caspian Countries Sign Oil Declaration
ANKARA 29 Oct 1998 16:24 EST - Turkey and four Caspian countries signed Ankara Declaration on the transportation of Caspian and Central Asian petroleum to the Western markets through Eastern-Western corridor.
The declaration was made vis-a-vis plans by world oil companies to use the Bosporus strait as oil routes. Turkey argued that the narrow Bosporus routes have led to hundreds of accidents.
The Ankara Declaration was signed in Parliament here on the occasion of the 75th anniversary of the Republic of Turkey by presidents of Turkey, Azerbaijan, Georgia, Kazakhstan, Uzbekistan and U.S. Energy Secretary Bill Richardson as observer.
Turkish President Suleyman Demirel said at the signing ceremony that the signature of the declaration was declared to the whole world in a determination to materialize the 1,730-kilometer Baku-Tbilisi-Ceyhan oil pipeline as the main pipeline.
The Turkish president pointed out that the declaration was a historical one, claiming a triumph for Turkey, which got all the countries involved in the project -- apart from Russia -- to declare their support for the Baku-Ceyhan pipeline.
He said that Ankara Declaration clarifies their mutual resolution and will to transport energy resources to the world market by more than one pipeline.
The energy resources were very important for the strengthening of independence of the countries in the Caspian Basin, strengthening of their efforts for economic development and for increasing welfare level of its people, added Demirel.
Turkish Foreign Minister Ismail Cem said that "this great declaration forms the political framework of the economic development which closely interests our country for the future."
"The concerned countries made a moral commitment here. The country who fails to abide by this commitment will be under a serious responsibility," he added.
Turkey has been lobbying energy companies to choose the Caspian route. The companies are expected to announce their decision on November 12. Enditem
10/29 14:51 Most OPEC Ministers Hold Informal Two-Hour Meeting
CAPE TOWN, SOUTH AFRICA, Oct 29 (Reuters) - An informal meeting of most of the 11 oil ministers of the Organization of Petroleum Exporting Countries (OPEC) was breaking up after two hours without comment from the attendees.
The meeting, held on the sidelines of an annual meeting of producer- and consumer-country oil ministers, was attended by OPEC heavyweights, including Saudi Arabia's oil minister, Ali al-Naimi, and Venezuela's Erwin Arrieta.
Ministers from Iran, Venezuela, Kuwait and Iraq had left without any comment.
10/29 16:44 - Oil Producers Discount More Supply Cuts
CAPE TOWN, South Africa Oct 29 - Leading oil-producing nations on Thursday discounted the prospect of deeper supply cuts to revive ailing world oil prices, insisting that a current agreement should be given more time to run.
The likelihood of tighter restrictions receded when the Gulf Arab president of the Organisation of the Petroleum Exporting Countries said he was content with oil cuts agreed earlier this year.
"The reductions we have agreed can be considered a good figure," UAE Oil Minister Obaid bin Saif al-Nasseri told reporters before a conference of oil producers and consumers.
A closed-door session of OPEC ministers on the fringes of the conference went no further than discussing strategy ahead of the group's full winter gathering in Vienna next month.
"The ministers were just exchanging views on the general situation in the oil market," said OPEC Secretary-General Rilwanu Lukman after two hours of talks.
"They will review their agreement in November and whether to extend it review it. All the options are open," he said.
OPEC this year has already pledged to remove 2.6 million barrels daily, some 10 percent, from a glutted world market that saw oil prices touch 10-year lows in August.
Delegates said calls from a minority of OPEC producers for further swift action to boost oil prices appeared to fall on deaf ears.
Algerian Oil Minister Youssef Yousfi told reporters: "We have a very large imbalance of supply and demand and we have to correct it and the sooner the better. We have a big, big problem and it creates for us serious economic problems."
Kuwait's Sheikh Saud al-Sabah, also a leading advocate of more cuts, went so far as to estimate that the world market of 75 million barrels daily remained oversupplied by more than one million barrels a day.
But those views do not appear to carry much weight with the influential Saudi Arabian camp. Saudi Oil Minister Ali al-Naimi said recently that further OPEC supply cuts would only undermine the cartel's market share.
Riyadh supports the line that, if necessary, OPEC should consider extending the duration of its agreement for a further six months to the end of the year.
That is the option more likely to attract support in November from OPEC states like Venezuela who have made clear they cannot afford deeper cuts.
"Any changes or modifications on what we have already decided depend on market behaviour," said Venezuela's Erwin Arrieta on his arrival in Cape Town.
Saudi Arabia, meanwhile, is insisting that all producers comply fully with their pledges to withdraw supply. That is despite what analysts say is a surprising degree of cooperation among OPEC members in reaching more than 90 percent of targeted output cuts.
OPEC's action has found unprecedented support from producers outside the cartel, including Mexico and Norway, but oil prices have remained stubbornly low.
Benchmark Brent crude was valued at just $13.05 on Thursday, still $6 short of last year's average price.
Mexico's Oil Minister Luis Tellez said on Wednesday his country would support any extension to the duration of supply restrictions to the end of 1999 -- if OPEC took that course.
Norway's Marit Arnstad said Oslo would make up its mind on its next move before the end of the year, after comparing notes with fellow producers in Cape Town.
10/29 11:29 Independent Oil Refiners Gain As Margins Recover
NEW YORK, Oct 29 - Share prices of independent oil refiners continued their recent strong performance on Thursday as U.S. refining margins continued to improve.
Valero Energy Corp. <VLO.N> added 1-9/16, or 6.81 percent, to 24-1/2, Tosco Corp. <TOS.N> 1-8/16, or 5.65 percent, to 28-1/16 and Sun Co. Inc. <SUN.N> 1-1/8, or 3.5 percent, to 33-1/4.
The only independent refiner which did not post strong gains was Ultramar Diamond Shamrock Corp <UDS.N>, which was unchanged at 27.
Schroder & Co. analyst Michael Mayer said that refining margins in the U.S. had rebounded 35 percent, or about $1.00 per barrel, over the past three weeks.
"Valero is our top choice, it has the most attractive risk/reward ratio and the best upside to our target price," Mayer said.
He noted that the continued closure of Chevron Corp.'s <CHV.N> Pascagoula, Miss. refinery was bullish for a continued improvement in margins.
The only area where margins have not improved substantially is on the West Coast, Mayer noted.
Pertamina Wants Suharto Firm Out Of Unocal Blocks
JAKARTA, Oct 30 - Indonesian state oil firm Pertamina, continuing a drive against companies linked to former President Suharto, has recommended that Unocal Corp <UCL.N> buy out minority shares in two oil blocks, an official said on Friday.
The Pertamina official, who spoke on condition of anonymity, told Reuters that Unocal had been asked to buy out the 10 percent stakes owned by the Nusamba Group, controlled by charities headed by Suharto, in the Rapak and Ganal blocks offshore East Kalimantan province.
Unocal holds a 90 percent stake in each block.
"Pertamina expects the conclusion of this takeover within one week," the official said.
The charities controlled by Suharto own 80 percent of Nusamba. The other owners include Suharto's eldest son and one of the former president's closest friends, Mohamad "Bob" Hasan, each with 10 percent.
Since Suharto resigned in May, Pertamina has been moving to ease his friends and family out of Indonesia's lucrative oil sector.
It says it has identified irregularities in 159 companies it has given contracts to, all of which are linked to the former first family.
Earlier this month, Atlantic Richfield <ARC.N> and British Petroleum <BP.L> bought out the minority stake controlled by a company owned by one of Suharto's sons in the Kangean oil block offshore East Java.
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