Yamani Says Marathon Oil Talks In Jeopardy
Oct. 17, 1986
GENEVA (AP) _ Dominant OPEC oil producer Saudi Arabia clashed with cartel partners Friday over finding a common strategy for limiting oil supplies and raising prices.
Outside oil-industry analysts have said that if the Organization of Petroleum Exporting Countries fails to devise a secure, longstanding strategy for restraining output, a worldwide oversupply will likely force prices down.
Ahmed Zaki Yamani, the Saudi oil minister, told reporters the OPEC meeting, in its 12th day, had reached a ''difficult stage.'' He commonly uses that expression to signal a major conflict in OPEC negotiations.
The deliberations were adjourned until Saturday afternoon, and Libyan Oil Minister Fawzi Shakshuki said the officials had made ''good progress.'' He and other ministers declined to provide details.
Yamani, whose country produces the largest share of OPEC oil, emerged briefly from the talks in a Geneva hotel during a lunchtime break and spoke with reporters for the first time since the conference opened Oct. 6.
Asked whether he was willing to accept an extension of OPEC's current accord on production controls - as favored by a majority of the members - the Saudi minister said, ''We are not here for an extension.''
Other members have argued that by extending the current accord, due to expire Oct. 31, OPEC would gain more time to complete negotiations on a permanent agreement.
OPEC's current accord, which took effect Sept. 1 and halted a steep decline in world oil prices, limits the production of each member except Iraq. Saudi Arabia and Kuwait are eager to replace it with a new, ironclad agreement that would give them bigger shares of OPEC's total production.
Belkacem Nabi, oil minister of Algeria, said an extension of the current accord had been proposed in Friday's opening session. He said this was the central focus of the cartel's deliberations.
Yamani did not reject an eventual agreement to extend the interim accord, but stressed that Saudi Arabia would continue to insist that an agreement be reached on a permanent system.
''We are here to reach something constructive, not a rollover (of the interim arrangement),'' he said.
Nabi and other ministers have said that by continuing its marathon meeting - already among the lengthiest in the 26-year history of the cartel - OPEC was heightening the risks of a new price decline.
Oil futures prices on the New York Mercantile Exchange rose in heavy trading Friday. Futures prices for immediate delivery of West Texas Intermediate, the main U.S. crude, jumped 25 cents a barrel, to $14.78.
Oil prices were at summertime lows of less than $10 a barrel shortly before OPEC announced its temporary agreement on production controls Aug. 5.
Stephen Smith, an oil analyst at Data Resources Inc. in Lexington, Mass., said oil prices would be likely to fall to $10 or less if OPEC's meeting ended with no agreements.
OPEC had spent the first 11 days of its conference squabbling over how to construct a formula for calculating individual production quotas. The idea was to base the quotas on a mixture of statistical references such as national oil reserves, population size and certain economic needs.
Nabi said Friday that the ministers had been unable to agree on this formula and had instructed OPEC's technical advisers to study the question further.
On Thursday, OPEC President Rilwanu Lukman had told reporters that the ministers had tentatively defined the elements of the formula, but obstacles to a final agreement remained.
Lukman had indicated that if the ministers could at least agree on the outlines of this formula, they might suspend discussions until their regularly scheduled December meeting. In the meantime, a slightly revised version of the current accord would be kept in force in order to avert a price drop.