OPEC to discuss quota violations

OPEC to discuss quota violations

ABU DHABI (AFP): OPEC oil ministers will discuss quota
violations by some member states when they hold their semi-annual
conference in Vienna next month, OPEC president Rakad ibn Salim
ibn Rakad said here yesterday.

Rakad, who is also acting oil minister of the United Arab
Emirates acting oil minister, admitted that some members of the
11-nation Organization of Petroleum Exporting Countries (OPEC)
were exceeding their production shares.

"There are quota violations inside OPEC but they are limited.
The main issues at the conference are how to tackle such
violations and maintain the current good situation in the oil
market," he said.

Rakad declined to name quota busters, but Venezuela and
Nigeria are believed to be responsible for most of the excess
output in the OPEC.

Independent estimates have shown such violations boosted
OPEC's actual production by nearly one million barrels per day
(bpd) above the official ceiling of 25.033 million bpd.

OPEC's monitoring committee, which oversees actual supplies by
members, discussed the market situation two weeks ago and is due
to meet again ahead of the full OPEC conference to prepare a
report on individual productions.

Rakad said he did not know whether OPEC would roll over its
ceiling. "That is up to the meeting. We are one group and I
cannot decide now."

"We will exchange views and listen to various opinions. We
will reach solutions in favor of all members. I am optimistic,"
said the UAE oil official.

He repeated OPEC's assertions that the return of embargo-hit
Iraq to the market after an absence of more than six years would
not affect oil prices, which have climbed to above OPEC's target
of US$21 a barrel.

Rakad also warned yesterday that there may be a long-term
shortage in oil supplies if industrialized nations press ahead
with a drive to increase energy taxes.

"The uncertainty concerning (oil) prices and taxation and
environmental policies followed by the industrial states will
make producing countries hesitate before investing in capacity
development, which could cause a supply problem in the future,"
he said at a Middle East gas conference here.

The OPEC is opposed to a European Union drive to hike taxes on
energy to reduce consumption and so promote environmental
policies.