LONDON — Prime Minister Margaret Thatcher told Parliament on Tuesday that her government would not attempt to force British oil companies operating in the North Sea to cut production, despite weakness in oil prices and the pound sterling.
Responding to a question on whether she would call for a cutback to help stabilize the pound, Thatcher said: "No, the United Kingdom maintains the freest oil province in the world, subject only to technical limits. Decisions on production levels are entirely in the hands of the producing companies, and there's been no change in that policy."
Members of the Organization of Petroleum Exporting Countries have called for production cutbacks from non-OPEC oil producers, primarily Britain, to help support oil prices. Oil is an important revenue source for Britain, and falling oil prices are one factor reflected in the value of the pound sterling against other currencies.
Since late November, a glut on world markets has caused oil prices to drop by more than a third, settling in the range of $19 to $21 a barrel in recent days. A barrel is the equivalent of 42 gallons of oil.
Britain on repeated occasions has expressed a policy of non-interference with oil companies operating in the North Sea.
Elsewhere, the chairman of British Petroleum said he expects OPEC to cut its output to stop oil prices from falling and said he doesn't foresee an OPEC-demanded decline in production from non-OPEC nations. Sir Peter Walters also told reporters that oil prices will rise by the spring.
Walters told reporters that he expected a price hike to come at a time of year when oil prices normally fall with the end of winter.
In a related development, a senior Libyan official was quoted as saying that Saudi Arabia and Libya have agreed to call for an emergency OPEC meeting in an effort to prevent world oil prices from falling further.
The semiofficial Arabic language newspaper Al-Ittihad, based in Abu Dhabi, quoted Major Al Khuweildi Al Hamidi, a member of Libya's Revolutionary Council, as saying that Saudi Arabia had said it was ready to host such a gathering.
Meanwhile, the OPEC secretariat, acknowledging mounting rumors of a special meeting of OPEC ministers for late February, said nothing has been arranged yet.