MercoPress. South Atlantic News Agency

Cautious OPEC to strictly comply with agreed quotas

OPEC has told its members to strictly limit their production to agreed quotas as Brent crude dipped below 100 US dollars a barrel for the first time since April. After talks in Vienna, OPEC president Chakib Khelil said the measures to curb over-production amounted to a cut of 520,000 barrels a day within 40 days.

Prices have sunk from a record of more than 147 US dollars a barrel seen in July.

The price has since fallen by nearly 30% as a global economic slowdown has reduced demand for oil. Supply has also been increased in recent months by some OPEC members - principally Saudi Arabia. Meanwhile, Indonesia has said suspended its membership of OPEC. "The conference regretfully accepted the wish of Indonesia to suspend its full membership in the organization and recorded its hope the country would be in a position to rejoin the organization in the not too distant future," OPEC said in a statement. After the late-night talks in Vienna, the group announced it had decided to "strictly" comply to the production ceilings agreed in September last year, which amount to 28.8m barrels a day excluding Indonesia and Iraq. "Since the market is over-supplied, the Conference agreed to abide by September 2007 production allocations (adjusted to include new Members Angola and Ecuador and excluding Indonesia and Iraq), totaling 28.8 mb/d, levels with which Member Countries committed to strictly comply". It linked the falling price of oil to falling economic growth, a stronger US dollar, easing geo-political tensions and greater supply. "All the foregoing indicates a shift in market sentiment causing downside risks to the global oil market outlook" a statement said. The effect of the measures, according to Algerian Oil Minister Chakib Khelil, who chaired the meeting, will be a cut of about 520,000 barrels a day. "Actions [to curb output] will be taken by members as soon as they can, that means in the next 40 days," he said. OPEC members will re-assess the situation when they hold an extraordinary meeting December 17th in Oran, Algeria. The next Ordinary Meeting will convene in Vienna, Austria, on Sunday, 15th March 2009, shortly before the OPEC International Seminar on the theme "Petroleum: Future Stability & Sustainability", which will take place at the Vienna Hofburg Palace on 18th and 19th March 2009. The Conference elected Desidério da Graça Verissímo e Costa, Minister of Petroleum of Angola and Head of its Delegation, as President of the Conference for one year, with effect from 1st January 2009, and HE Dr. Galo Chiriboga Zambrano, Minister of Mines and Petroleum of Ecuador and Head of its Delegation, as Alternate President, for the same period. The Conference appointed Ms. Siham A. Razzouqi, Governor for Kuwait, as Chairman of the Board of Governors for the year 2009, and Dr. Abdullah Ammar Ballut, Governor for the Socialist Peoples Libyan Arab Jamahiriya, as Alternate Chairman for the same period, with effect from 1st January 2009. The Vienna conference had as special participants Sameh Fahmy, the Minister of Petroleum of Egypt; Igor Setchin, the Deputy Prime Minister of the Russian Federation and Al Zubair Ahmed Hassan, the Minister of Energy and Mining of Sudan.