OPEC calls special talks, warns of delay cut

OPEC calls special talks, warns of delay cut

Michael Thurston, Agence France-Presse, Vienna

The OPEC oil cartel, in a tense stand-off with rivals over how
to boost sagging prices, confirmed Monday it will meet for
special talks in Cairo next week -- and warned it could delay an
output cut if other producers fail to play ball.

The 11-member grouping, which produces 40 percent of the
world's crude, could even announce this week a one-month delay of
the production cut, currently scheduled for January 1, said an
OPEC source.

"Maybe we will wait another month, maybe the first of
February," said the source, confirming that Organisation of
Petroleum Exporting Countries (OPEC) ministers will meet in Cairo
on December 28.

An announcement about a delay could be made Tuesday.

"We might announce something tomorrow. Because you cannot wait
another two weeks, and say OK because we're meeting on the 28th
we're going to delay the action. You have to say that right now,"
he said.

OPEC agreed in mid-November to cut its production by 1.5
million barrels per day (bdp) from January 1, on condition that
non-OPEC rivals cut by 500,000 bpd.

Major non-OPEC producers, notably Russia and Norway, have
offered to cut their production, but so far not by the combined
500,000 bpd demanded by OPEC.

Russia has been the main target of OPEC criticism. Initially
Moscow offered a tiny 30,000 bpd cut, a fraction of its
production of seven million bpd. But under pressure it raised its
offer to 150,000 bpd.

According to OPEC, Mexico has so far pledged a 100,000 bpd
cut, Norway 100,000-200,000 bpd, Oman 40,000 bpd, while Angola
confirmed last Friday that it would cut by 22,500 bpd.

OPEC, which fears that non-OPEC rivals would simply increase
their market share if it cuts production unilaterally, says it
wants clear commitments from its rivals.

"There is some concern among ministers that unless they have
some kind of written commitment from non-OPEC to come up with
some fixed numbers upon which we can base our upcoming decison,
they will have nothing to discuss," he said.

In London on Monday crude prices fell in early deals. A barrel
of Brent North Sea reference crude for February delivery fell 43
cents to 18.72 dollars a barrel.

The market has see-sawed in recent weeks as it anticipates a
broad deal between OPEC and its rivals to restrict global supply
in line with falling demand.

Crude prices slumped dramatically in the wake of the September
11 terrorist attacks, which have deepened an already approaching
global recession expected to slash demand for oil.

Meanwhile OPEC Secretary General Ali Rodriguez was returning
to Vienna on Monday, after attending a regional meeting in the
Caribbean, and would be working on the issue, he said.

The Arab-dominated cartel has pencilled in the Cairo meeting
last week, saying its ministers would gather if non-OPEC rivals
had failed to agree the required 500,000 bpd cut. On Monday the
OPEC source said the Cairo meeting will definitely take place.

The date and venue of the meeting are linked to an already
scheduled meeting of the Organization of Arab Petroleum Exporting
Countries (OAPEC) in Cairo on December 29. Most OPEC members are
also OAPEC members.