Sudjana calls on OPEC to meet over oil prices

Sudjana calls on OPEC to meet over oil prices

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana, who
is also the president of the Organization of Petroleum Exporting
Countries (OPEC), has called for an emergency OPEC meeting to
address decreasing oil prices.

"I have told the OPEC secretary-general (Rilwanu Lukman) to
contact OPEC ministers to see whether they will agree to gather
for an extraordinary meeting," said Sudjana after a meeting with
President Soeharto yesterday.

Sudjana called for the meeting following a drop in oil prices
this week.

World benchmark Brent crude oil traded at $13.73 per barrel on
London's International Petroleum Exchange on Tuesday, the lowest
level since April 1994, depressed by lower-than-expected demand,
the end of the UN standoff with Iraq and the prospect of higher
Iraqi exports under an enlarged oil-for-food deal.

A call from the OPEC President for an emergency meeting of
the oil producers' cartel boosted oil prices on Thursday.

Traders anticipating action by OPEC to cut overproduction
pushed up the price of international benchmark Brent blend by 41
cents to $14.32 a barrel in early trade in London.

The United Nations has allowed Iraq to raise its oil export to
1.5 million barrels per day (bpd) under its oil for food program.

An export quota set for Iraq by the United Nations following
the 1991 Gulf War had allowed Iraq to export 600,000 bpd until
now.

The market feels there will be an oversupply of oil, Sudjana
said.

"I must take the initiative on this because of the oil price
drop. We should think together about the market developments. If
they (OPEC ministers) want to meet, we will look for a solution,"
Sudjana said.

Some oil analysts blame the oversupply on OPEC which decided
to raise its production ceiling to 27.5 million bpd from 25.03
bpd during its ministerial meeting last November in Jakarta.

But Sudjana said OPEC's current production ceiling was not too
high.

"It is not (too high), because OPEC production was already at
that level (before OPEC's Jakarta meeting)," he said, adding that
the weak oil price was because of lower demand.

Sudjana said if OPEC ministers agreed to meet, the conference
would be held in Vienna after Indonesia's presidential election
next month.

The People's Consultative Assembly will meet to hold
presidential and vice presidential elections from March 1 to
March 11.

Lukman said in Vienna that he had contacted all OPEC members
to discuss ways of responding to the recent sharp oil price drop
and an emergency meeting has not been ruled out.

"He is in permanent consultations with all (OPEC) ministers to
decide what to do. The question of an emergency meeting is always
open," said an OPEC source." (jsk/prb)