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5 OPEC Ministers Begin New Talks on Strategy

February 03, 1986|From Reuters

VIENNA — Five OPEC ministers begin closed-door talks here today to try to find a formula that will safeguard their organization's waning share of the world oil market.

Venezuelan Oil Minister Arturo Hernandez Grisanti, who will chair the talks, received a report Sunday from OPEC experts who have labored since last Wednesday to outline possible strategies for the hard-pressed producers' cartel. However, like the others, he was unwilling to forecast what line they might adopt.

The other countries represented are Indonesia, Iraq, Kuwait and the United Arab Emirates, but the talks will not begin in earnest until this afternoon, soon after the expected arrival of Iraqi Oil Minister Qassem Ahmed Taqi.

Some delegates said the session might be followed on Thursday by a meeting of OPEC's Ministerial Executive Committee, which is headed by Saudi Oil Minister Ahmed Zaki Yamani and also includes Nigeria, whose attitude to any new strategy will be vital to OPEC unity. But there was no official confirmation.

Since the Organization of Petroleum Exporting Countries sent shock waves through producing and consuming nations in December by declaring that it would defend a fixed market share, speculation has been intense over what figure it would claim.

The Nicosia-based Middle East Economic Survey reported Sunday that Venezuela would seek to define the market share as between 16 million and 17 million barrels per day. Several OPEC states have spoken recently of 18 million barrels per day as the probable outcome, but none of the ministers or delegates here would confirm this.

OPEC is producing about 18 million barrels per day at present, with the result that the world is awash with crude oil and free market prices have plunged to their lowest in six years.

Wealthy countries such as Saudi Arabia and Kuwait are content to let this happen in the belief that it will soon force non-OPEC and OPEC producers alike to coordinate their policies for the common good. Non-OPEC Egypt and Mexico are cooperating, and Mexican Oil Minister Francisco Labastida is here as an observer at the talks.

Britain has refused to change its policies, and most Western analysts believe the pressure is bearing most strongly on the poorer members of OPEC itself. They are represented here only by Indonesia, whose minister, Subroto, favors the market-share strategy.

But even if it is approved by the five ministers here, it must then be proposed to a full meeting of all 13 OPEC states, where it is bound to run into hostility.

Iran, Libya and Algeria have previously refused to agree to price cuts and are expected to do so again.

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