December 29, 2001	Saturday	Shawwal 13, 1422

CAIRO, Dec 28: Opec on Saturday to cut its production by 1.5 million barrels per day (bpd) for six months starting in January, after its non-cartel rivals pledged to reduced their output, a spokesman told reporters in Cairo.

The Opec conference confirmed its decision to implement the previously announced reduction of its overall production level by an additional 1.5 million bpd for six months, effective first of January 2002, the spokesman said from a statement after a minsterial meeting of the 11-member Organisation of Petroleum Exporting Countries.

Opec said it made the decision after having reviewed the recent positive announcements from non-Opec oil producers namely Angola, Mexico, Norway, Oman and the Russian Federation regarding their pledged reductions totalling 462,500 bpd and the current oil market situation.

The production cut had largely been anticipated by the markets as part of a strategy to prop up the price above $20 per barrel.

The cut represents six per cent of Opec’s total output of 25.5 million bpd, with Iraq’s production included. Opec’s official ceiling excluding Iraq is 23.2 million bpd, representing one third of the world’s total oil production.

Opec flagged the cutback in November, but said it would only proceed if rivals outside the 11-nation grouping readied production cuts of their own. Non-Opec countries have pledged to reduce output by some 460,000 bpd.

Oil experts consider that Opec regularly exceeds declared output limits by 20 to 30 per cent.

The cartel’s oil ministers, notably the Saudi Arabia’s Ali al-Nuaimi, had made it clear before the meeting that they would slash production between January 1 and June 30 of next year.

The price of oil opened slightly higher in London as the market digested news from Cairo that Opec would rubber-stamp the output cutback.

A barrel of Brent North Sea crude for February delivery rose 36 cents to $20.70 a barrel. Overnight the New York light sweet crude February contract eased 37 cents to $20.90 a barrel.

We have initiated a very important process with the non-Opec countries to obtain their cooperation. It will have very important repercussions on the price stability in the future, Opec president and Algerian Energy Minister Chakib Khelil told the press conference.

The Opec statement stressed the importance of adherence of all producers to their pledged reductions, and the need for their continued cooperation to achieve lasting market stability and a fair and equitable price for the welfare of the producers and consumers alike.

The cartel said it would monitor both the global economic situation and the demand and supply situation to ensure the desired results.

Meanwhile, the secretary general of the organization, Ali Rodriguez, told reporters that a delegation of Opec ministers would meet with Russian Prime Minister Mikhail Kasyanov in January

I am going to Russia to coordinate our policies with non-Opec countries. we are all facing some turbulences on the market, even Russia. we are going to exchange our views and our analysis, he said after the meeting.

The Opec conference also scheduled its next meeting in Vienna on March 15.

The September 11, attacks in the United States coupled with a global economic slowdown have reduced demand for oil and brought prices to below $20 a barrel, though they jumped by more than a dollar on Thursday as the market anticipated a slash in output from Opec.—AFP