OPEC vows more dialog meetings with partners

JAKARTA (JP): The Organization of Petroleum Exporting Countries (OPEC) will intensify dialogs with consumers and independent producers to seek ways to stabilize the oil market.

I.B. Sudjana, the organization's president and also Indonesian minister of mines and energy, told reporters after installing second echelon officials at his ministry here yesterday that OPEC will establish a committee for the intensification of dialogs.

"I will put high priority on dialogs aimed at the stabilization of the oil market," Sudjana, who was elected as OPEC's president in its ministerial meeting in Bali earlier this week, said.

OPEC will likely initiate the establishment of a permanent forum of dialogs with independent producers and consumers, he said.

The 12-member organization has held discussions with consumers and independent producers "but the discussions were limited to seeking a solution for certain specific problems," he said.

Sudjana acknowledged that oil demand on the world market is expected to increase next year but said that "if OPEC and independent producers do not curb output, oil prices will decline".

OPEC predicts that the world demand for oil will likely increase to an average of 66.75 million barrels per day (bpd) next year from 65.91 million bpd this year.

Even though next year's demand for OPEC oil is estimated to average at 15.52 million bpd, as compared to 24.85 million bpd this year, the organization decided on Tuesday to extend its output ceiling of 24.52 million bpd until the end of 1995.

Consumers

Sudjana said OPEC plans to set up a committee to deal with cooperation and dialogs with oil consumers during an OPEC- consumer meeting in Caracas, Venezuela, next year.

"I hope the committee will be able to provide a new sphere of cooperation because dialogs will bring more understanding between two sides," he said.

OPEC and its consumers held dialogs in 1991 in Paris, in 1992 in Solstrand of Norway and in 1993 in Cartagena, Spain.

Sudjana said dialogs with consumers are focused on the imposition of taxes on oil products, which has raised serious concern among OPEC members.

Taxes have become an increasingly harmful burden to OPEC members, which are generally developing countries, he said.

The minister said OPEC's compliance with its production ceiling has raised oil prices on the world market, so that the average of Indonesia's oil prices during the first eight months (April to November) of this fiscal year has reached $16.32 a barrel, slightly above $16 used by the government to calculate its budget.

Indonesia's oil price averaged at $16.18 a barrel in October and $16.27 in November, he added.

The government, under its budget plan, expects a 15 percent decline in its revenue from the oil and gas sector to Rp 12.85 trillion ($5.8 billion) this fiscal year from Rp 15.12 trillion in 1993-94. (fhp)