OPEC meeting will be tough, Bambang says

OPEC meeting will be tough, Bambang says

JAKARTA (JP): Minister of Mines and Energy Susilo Bambang
Yudhoyono said the approaching ministerial meeting of the
Organization of Petroleum Producing Countries (OPEC) could be
very tough as the camps for and against oil output increases were
equally strong in the group.

"I've heard that OPEC is divided over the issue of a quota
increase. I think there will be a heated debate during the
meeting," Bambang said on Friday.

Bambang reiterated Indonesia's stance to support only a slight
increase in the production quota at the meeting scheduled for
Monday in Vienna. Bambang will leave for Vienna on Saturday.

OPEC is being pressured by the United States to raise output
to reduce oil prices.

Oil prices have risen to above US$30 per barrel over the past
several months from around $10 a year ago after it and other non-
OPEC oil producers decided to cut global output.

Former OPEC Secretary General Subroto said on Thursday OPEC
had never and would never bow to external forces, including the
U.S., in formulating its oil policy.

"OPEC formed its policy based on the regular study of the
global oil supply and demand. If there is an oversupply, it will
cut the oil quota and vice versa," Subroto said.

Subroto noted that OPEC included hardliners Iran, Iraq and
Algeria, who will most certainly turn deaf ears to the U.S.

"I learned that the three countries object to the proposal to
increase the oil quota. They prefer a wait-and-see stance for two
and three months before making a decision whether to raise the
quota," Subroto said.

U.S. Energy Secretary Bill Richardson is now on global tour to
persuade OPEC and non-OPEC oil producers to raise production.

Bambang said he hasn't spoken with Richardson on the issue but
had been informed the latter would telephone him.

The U.S House of Representatives approved legislation on
Wednesday pressuring OPEC to raise production and reaffirming
President Clinton's authority to cut U.S. aid and arms sales to
OPEC and nations that control world prices.

The U.S. Energy Information Administration demanded OPEC boost
oil output by 2 million barrels per day to return world stocks
and prices to normal levels.

This is higher than many OPEC countries, including Indonesia
will find acceptable.

Bambang earlier said Indonesia would only accept a 1 million
bpd increase in output to keep oil prices between $22 and $26 per
barrel.

The Indonesian government assumes an oil price of $20 per
barrel in the April-December 2000 state budget.

Leading producers, including Saudi Arabia, are believed to
favor extra OPEC supply of about 1.5 million barrels a day.

Meanwhile, Iran said Friday it was still against a rise in oil
production to bring prices down.

"A rise in production in the current situation is not
justified and a fall in prices risks making the market unstable,"
state radio quoted senior Iranian oil ministry official Hossein
Kazem-Pur Ardebili as saying.

"Those who, through pressure or embargo, want to control
prices showed no concern when the price per barrel was $10,"
Ardebili said, as reported by AFP. (jsk/bkm)