Consensus builds in OPEC on steady output; no deal yet on next leader

Consensus builds in OPEC on steady output; no deal yet on next leader

Maher Chmaytelli
Agence France-Presse
Vienna

A consensus is building within OPEC to maintain its oil
production ceiling until at least early next year at Thursday's
meeting, but the 11-nation cartel remains divided over who will
be its next secretary general.

The oil ministers of Algeria, Indonesia, Iran, Libya, the
United Arab Emirates (UAE) and Venezuela have said they prefer
Organization of Petroleum Exporting Countries (OPEC) to keep its
24.5 million barrels per day (bpd) ceiling unchanged for now, and
OPEC kingpin Saudi Arabia seems satisfied with the status quo.

These countries said OPEC should hold another meeting between
January and March next year to review the market situation.

Oil prices since June have stayed close to the upper limit of
the 22-28 dollar per barrel price band targeted by OPEC, and
often hovered above it, with demand now driven by the winter
season in the northern hemisphere and high economic growth in the
United States and China.

"I don't think there is a need for a change in quotas... we
probably have to meet again before March," Libyan Oil Minister
Abdulhafid Zlitni said.

Algeria has said OPEC, which controls about one third of the
world's crude oil supply, should contemplate lower production
only in the second quarter, as seasonal demand decreases.

Algerian Energy Minister Chakib Khelil expected demand in the
second quarter to be lower by 1.5 million bpd from its current
level, and non-OPEC crude oil production to increase by more than
one million bpd.

But he stopped short from predicting an OPEC cut in production
in the second quarter. "I don't know, we should see how much we
are producing first," he told reporters here.

A decision to maintain output would run against the wishes of
the International Energy Agency (IEA), which represents consumer
nations. This body has been calling regularly for an increase in
supply.

But OPEC officials have argued that high prices have been
caused by political worries, mainly linked to Iraq, and not to a
lack in supply.

On the administrative front, the 11-nation cartel has yet to
agree on a name to fill the top administrative job at the
organization's headquarters in the Austrian capital.

Iran, Kuwait and Venezuela have fielded candidates,
respectively Hadi Nejad Hosseinian; Adnan Shihab-Eldin, who is
OPEC's director of research; and Alvaro Silva Calderon, the
incumbent secretary general.

Iran has said it would stand by its candidate and not give
support for any other country's aspirant.

"If they (the other members) don't vote for Iran's
candidate... there is no reason Iran should vote for others," Oil
Minister Bijan Namdar Zanganeh has said.

Industry sources said if the cartel fails to reach a
consensus, it could resort to alphabetical order, and in this
case Iran would emerge as winner.

Another way out would be to ask the oil minister of the
country which will take over the presidency in 2004, Indonesia,
to serve as the acting secretary general until an agreement is
reached.

Iran provided OPEC's first secretary general in 1961, and
Kuwait the third, in 1965.

Both countries are arguing that it is time for them to have
this position again, and industry sources say Kuwait has the
backing of fellow Gulf Arab monarchies Qatar, UAE and Saudi
Arabia.

Analysts say that Venezuela's candidacy responds to a quest
for international prestige on the oil scene by President Hugo
Chavez, who had been challenged earlier this year by the oil
workers of his own country.

The position of secretary general does not interfere in
principle with policy making which remains in the hands of the
ministers, but can influence the efficiency of the cartel.

"Having a good secretary general, someone who has good
relations with all members, enables the organisation to react
quickly to events," said Ruba Husari, an expert with the New
York-based Energy Intelligence Group.