Saudi will not raise oil output, Rodriguez says

Saudi will not raise oil output, Rodriguez says

JAKARTA (JP): President of the Organization of Petroleum
Exporting Countries (OPEC), Ali Rodriguez Arague, confirmed on
Monday that Saudi Arabia would not go ahead with its plan to
raise oil output.

Rodriguez said Saudi's Oil Minister Ali al-Naimi had told
OPEC's Secretary General Rilwanu Lukman that the country would
not raise its oil production as feared by many other OPEC member
countries.

"His (al-Naimi)'s position is that Saudi Arabia will not take
any unilateral decision, only by consensus. That's very, very
clear for us, they're not going to increase production before
there's any decision in OPEC," he told a news conference.

He said that any decision regarding oil production by OPEC
members must be taken by consensus with the entire members, not
by a member country's singular decision.

Saudi Arabia said last week that in order to calm the crude
oil price market it was considering raising its daily output by
another 500,000 barrels in addition to the production increase of
708,000 barrels per day agreed earlier by OPEC.

OPEC members are Saudi Arabia, Iran, the United Arab Emirates,
Kuwait, Qatar, Nigeria, Libya, Algeria, Venezuela, Indonesia and
Iraq, although Iraq has not participated in recent OPEC
production pacts. Together, they account for roughly 40 percent
of the world's oil production.

The organization's members entered into an agreement in June
to raise oil production by 708,000 barrels per day. That move,
however, failed to move prices down towards OPEC's US$25 a barrel
target.

Saudi's plan to increase production has sparked comments and
criticism from OPEC members. Some members have requested Saudi
delay its plan until it is known how the June agreement has
affected the crude oil price.

Minister of Mines and Energy Susilo Bambang Yudhoyono also
criticized the Saudi move.

"Any decision regarding oil production made by a member
country must first be discussed at an OPEC meeting. Indonesia's
position is that all OPEC member countries should abide by the
OPEC agreement," he said.

Rodriguez said that due to high speculation in the market,
Saudi's plan to raise output had caused crude prices to fall by
$2 to $3 per barrel in only three days since the announcement by
the country's Oil Minister, Ali al-Naimi.

"However, we have to be very careful in reading the current
situation before taking any decision," he said, adding that OPEC
wanted to keep the oil price to stable at between $22 and $28 per
barrel.

He said there was a strong possibility that OPEC would make
another increase in the oil output in the next quarter, but only
if there was a significant increase in demand.

The demand for crude oil has been constantly increasing lately
with figures in the U.S. hitting more than four percent and
Europe and Asia by around three percent, he said.

"If the demand for oil continues to increase by about 1.3
percent, or about three million barrels, in the next quarter,
maybe OPEC will decide to increase production," he said, adding
that the demand in the second quarter was about two million
barrels per day.

Rodriguez, however, declined to reveal the amount of increase
that OPEC must take in order to keep oil price within its desired
price range.

He said that the market price was currently oscillating due
mainly to lots of speculation, but expects it to return to normal
soon.

"Particularly, I believe that in the next days maybe the price
will be between $22 and $28 per barrel," he said.

Rodriguez, who is also the Minister of Energy and Mines of
Venezuela, is visiting Indonesia as part of a tour of OPEC
countries ahead of the cartel's heads-of-state summit in
Venezuela in September.

He is scheduled to deliver a speech on the future trends in
the oil and gas industry at the Indonesian Investment Summit of
Mining and Energy (JIEC) 2000 conference, which was officially
opened on Monday evening by President Abdurrahman Wahid. (cst)