Newspaper article THE JOURNAL RECORD

OPEC Steps Up Bargaining to Raise Production Ceiling

Newspaper article THE JOURNAL RECORD

OPEC Steps Up Bargaining to Raise Production Ceiling

Article excerpt

GENEVA - Ministers of the Organization of Petroleum Exporting Countries stepped up bargaining Tuesday in a last-ditch effort to increase the oil cartel's production ceiling above 19.5 million barrels a day for the rest of 1989 without sending prices into a freefall.

OPEC, which has 13 members, twice postponed what was expected to be a final round of talks to consider a new Iranian proposal. Talks were to resume today after private bargaining sessions.

``It has to cook some,'' Iraqi Oil Minister Issam al-Chalabi said of the Iranian plan.

Earlier, Iranian Oil Minister Gholamreza Aqazadeh said his country had offered a plan to raise the production ceiling in the last quarter of the year. Iran suggested hiking the cap to between 20.5 million barrels a day and 21 million barrels.

The ministers talks have centered on raising the production cap from the current 19.5 million barrel limit to a level between 20 million barrels a day and 21 million barrels, according to delegates.

The additional amount under the Iranian plan would be divided under a formula that would meet the demands of Gabon, the United Arab Emirates, Kuwait, Ecuador and Qatar for bigger shares of the production pie.

All countries would get larger individual quotas, meaning they could pump more in the last quarter than now but some would see their percentage share of the total output shrink.

``It seems (there will be) a little increase,'' said a senior member of one delegation, who demanded anonymity. ``But we still have different positions. It's a slow process.''

``There are some members that are still taking a very hard line,'' said another delegate, also on condition of anonymity.

The meeting began Saturday with the delegates arguing over whether the market was strong enough to absorb an increase in production without sending prices tumbling. …

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