``You cannot convince any member to add more crude to the market because we have enough crude,'' Secretary General Abdulla El-Badri said in an interview today in Luanda, the capital of Angola. ``There's enough oil in the market, we don't know what to do with it.''
Crude prices in New York touched a record this month on concern oil refinery supplies may be inadequate. The Organization of Petroleum Exporting Countries, which has resisted calls to increase output, meets Sept. 11 in Vienna to discuss production policy for the fourth quarter.
OPEC and Angola agreed to use the Girassol crude oil grade to represent the group's newest member in the organization's basket price index, El-Badri said. The African nation joined OPEC on Jan. 1 as its 12th member.
The International Energy Agency in Paris, representing the interests of industrialized consuming nations, has urged OPEC not to restrict supplies as high energy prices place a burden on economic growth. Oil has eased 8.8 percent since touching a record $78.77 a barrel on Aug. 1. The price today was at $71.82 a barrel.
Production Limits
El-Badri said he will meet the new executive director of the IEA, Japan's Nobuo Tanaka, on Sept. 5 in Vienna. The OPEC official, who formerly ran Libya's state oil company, is currently on a three-day visit to Angola and has held talks with the West African country's oil minister, Desiderio Costa.
Angola and Iraq are the only OPEC members not subject to production limits. The other 10 members are partway through cutbacks totaling 1.7 million barrels a day.
Those 10 members, including OPEC's biggest producer, Saudi Arabia, have collectively completed about 60 percent of their promised reductions and any level of compliance above 65 percent would be ``fine,'' El-Badri said.
``I assure you that if there's any shortage we will supply more crude to the market, but I think the market is really stable at this time,'' he said.
OPEC ministers are scheduled to hold two policy-setting meetings later this year, with the second one on Dec. 5 in Abu Dhabi. The secretary general said additional cutbacks next year weren't currently anticipated.
``As we see it now there will be no cut in 2008,'' he said. ``It is according to the economic situation, which will be clearer to us in December.''
Angola Quota
Angola is likely to have a production quota next year, and El- Badri said he hopes to announce that level at OPEC's December meeting. International oil companies including Exxon Mobil Corp. and BP Plc view Angola as a growth area as they find it harder to expand oil and gas production in other resource-rich countries such as Russia and Venezuela.
``I don't think there will be a quarrel with Angola on production quotas,'' he said. ``At the beginning of 2008 they will have a production allocation.''
Angola pumped 1.65 million barrels a day last month, or about 5.4 percent of OPEC's crude oil supply, according to Bloomberg estimates. The country was Africa's fastest growing oil producer last year, when output rose 14 percent, according to BP statistics.
It will be four to six years before Iraq's full oil production potential can be realized, El-Badri said.
French oil company Total SA said it started production at the Rosa deepwater field off Angola on June 18, which will help keep production at the Girassol floating production, storage and offloading vessel at about 250,000 barrels a day until early next decade.
OPEC plans to hold a heads of state summit on Nov. 17-18 in Riyadh, Saudi Arabia, the third such meeting since the organization was founded in 1960. Venezuela and Algeria hosted previous summits in 1975 and 2000. The Riyadh summit will help OPEC to become ``stronger in solidarity and stronger in cooperating together,'' El-Badri said.
Via: Bloomberg
by Fred Pals and Stephen Voss
