RI's proposed OPEC meeting receives guarded response
JAKARTA (JP): Libya is the only member of the Organization of Petroleum Exporting Countries (OPEC) to officially support an Indonesian proposal for an emergency meeting to address a slump in world oil prices.
An OPEC official at the Ministry of Mines and Energy who asked for anonymity said yesterday most OPEC members had expressed unofficial support for the proposal, but were ready to hold such a meeting only if it guaranteed to produce a concrete solution to improve oil prices.
"The members consider that if the meeting brings no result, it would bring the international oil market into danger. Prices might experience a free fall," he said.
OPEC groups Algeria, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, the United Arab Emirates, Venezuela, Indonesia, Iran and Nigeria.
Minister of Mines and Energy I.B. Sudjana, who is also OPEC's president, recently called on the grouping to meet to discuss falling oil prices and demand.
Oil prices have fallen 30 percent since last October with world benchmark Brent crude oil trading at $13.73 per barrel last week, the lowest level since 1994.
Analysts say the decrease is due to a mild winter, a slowdown in Asian demand and an increase in OPEC supply.
The source said Libya sent a letter to the OPEC secretariat in Vienna, confirming that it agreed to the meeting but proposing that it be held after a soon-to-come meeting of OPEC's Ministerial Monitoring Subcommittee (MMC).
The MMC, composed of Iranian, Indonesian and Nigerian officials, monitors OPEC member's quota compliance. The subcommittee will hold its meeting March 16 in Vienna.
The official said OPEC Secretary-General Rilwanu Lukman was currently contacting group members to establish a pre-meeting consensus which could produce a smooth and conclusive meeting.
"It's a kind of preparation so that ministers would only need to fine-tune their positions," he said, noting that all OPEC decisions are based on consensus.
Several members, including the United Arab Emirates, Saudi Arabia, Iran and Kuwait, have hinted they would support an extraordinary meeting.
Saudi Arabia and Iran expressed over the weekend a willingness to work together toward correcting the sharp decline in oil prices and voiced their concern over quota breaking by other member states.
Kuwait also said it might agree to the meeting provided that all members pledge to abide by their quotas.
OPEC raised its ceiling oil output to 27.5 million barrels per day (bpd) from 25.03 million bpd during its ministerial meeting last November in Jakarta.
But analysts say OPEC's real output is higher than the ceiling because most members break their quotas.
Indonesia has a quota of 1.456 million bpd.
The proposed extraordinary meeting may also be discussed in the upcoming MMC meeting, according to the source. (jsk)