OIL-IRAQ: Increase in production during war depends on war consequences,

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Att.Editors: The following item is by the United Arab Emirates news agency (WAM)

VIENNA, Mar 10 2003 (IPS) - United Arab Emirates (UAE) Minister of Petroleum and Mineral Resources Obeid bin Saif Al Nasiri has said that the Organization of Petroleum Exporting Countries (OPEC) would discuss during its ordinary meeting here tomorrow the issue of meeting any shortfall in oil supply to the international market in case war erupts in the Gulf region.

Al Nasiri said he expects, in this case, a sharp rise in oil prices to be followed by restructuring of the prices, which would depend largely on the consequences of the war.

The minister, who made the statement to the Emirates News Agency (WAM) on arrival here early today to participate in tomorrow’s meeting, said that it was natural for OPEC to make up for any shortfall in oil supplies which may result from the cut of supply from any of its sources.

– But this would largely depend on the adverse effect the war may have on the market," he said, adding that many opinions are now on the table for discussions. These, he said, include the temporary suspension of the quota system and increasing output. ôBut all these opinions lead to the same result," he added.

Al Nasiri pointed out that all OPEC members are producing their maximum outputs and that their capability of meeting extra demands that may be caused by the war would be very limited. ôI think everybody’s production is almost full," he said.

He said he was ready to meet US Energy Secretary Spencer Abraham, who is also here, although there is no contact between us up to now to arrange for such a meeting, he said, and urged for cooperation between OPEC and non-OPEC oil producers, adding that the presence of some non-OPEC oil ministers at the meeting would enhance coordination among oil producers to see how best to deal with the latest developments on the oil market.

He said the Organization would activate its production mechanism of increasing supplies by 500,000 barrels per day in case the prices persist at above 28 dollars per barrel for 20 days, adding that OPEC had often increased its production in such a situation by 1.5 million.

ôBut any increase in production would depend on the demand on the market," he said. He expressed the hope that his visit to Romania and Syria after tomorrow’s meeting in response to an invitation by the governments of the two countries would enhance cooperation between them in various areas of oil industry.

Al Nasiri, who was received on arrival here by Alvaro De Silva, OPEC Secretary General, and Ahmed Rashid Al Dossari, Charge D’Affaires at the UAE Embassy in Austria, would be accompanied on the Romanian and Syrian visits by a number of officials from his ministry.