Saudi oil minister says it is premature to talk about whether OPEC will cut crude production

Adnan Malik

Associated Press Writer

Saudi Oil Minister Ali Naimi said Nov. 2 that it was “premature” to say whether the Organization of Petroleum Exporting Countries would decide to cut crude production at a meeting next month.

“I believe we should wait and look at the data when we meet on Dec. 4 and decide accordingly,” he said of the Vienna meeting. “I think it is premature. ... I think it is OK to guess, but the data is not at hand to say now what the decision is going to be on Dec. 4.”

Naimi was speaking to reporters after a meeting of the oil committee of the Gulf Cooperation Council, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Naimi said OPEC members are mainly focusing on the stability of the international market.

“We will continue to focus on that approach. The idea of whether we will increase or decrease is not the subject. ... The subject is that we will do our best to keep the price within OPEC basket (price) band and keep the market supplied and try our best as we can within OPEC and also outside OPEC ... to maintain stability,” he said.

In September, OPEC decided to lower its output ceiling by 900,000 barrels a day to 24.5 million barrels starting this month.

Asked whether the November cut has spared OPEC prices from crashing, he said, “We will see that when inventories are examined at the end of the year.”

Naimi said he still favors an oil price at around US$25 a barrel, which he said is fair for both producers and consumers.

“We will try our best to keep it that way,” the minister said.

Among the issues at the GCC meeting, the ministers discussed a proposal to build an inter-Gulf oil pipeline that would start in Kuwait and pass through all the GCC countries before ending at the Arabian Sea in Oman.

Qatari Oil Minister Abdullah bin Hamad al-Attiyah said the project would have to be studied further.

The project is aimed at maintaining exports of oil during any emergency in the Gulf that could prevent tankers from reaching various ports. Currently tankers have to pass through the Strait of Hormuz between Oman and Iran to reach oil loading terminals in all the Arabian Gulf states.

Qatar, a close U.S. ally, had previously proposed the project in the mid-1980s during the Iran-Iraq war.

Earlier this year, a GCC technical team signed a US$200,000 contract with U.S. company Kellogg Brown & Root to conduct a comprehensive study on the project. The American company is also the subsidiary of Halliburton, the American government’s chief contractor in Iraq.