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Official Says OPEC Nations Should Resist Individual Deals With Customers

December 3, 1985

CARACAS, Venezuela (AP) _ Venezuela’s Deputy Energy Minister Hernan Anzola says OPEC should reaffirm its position against a trend towards member nations writing individual deals with customers for petroleum.

″If OPEC allows this thing to go on, the situation will be very difficult for next year″, Anzola told the Caracas newspaper El Nacional on Monday.

Anzola said Venezuela will take to the next OPEC meeting Dec. 7 in Geneva a formula that ″takes into consideration the realities of the world’s oil market and reaffirms the organization’s rights to set the prices of oil″.

According to press reports from London, Venezuela’s proposal is that the prices of OPEC oil be related to those in a ″basket″ of crude oils and refined products in the world’s market, something similar to what is known as a ″netback″ deal.

In a netback deal, the cost per barrel is tied to the projected profit of after considering refining and transportation costs.

Anzola said that ″the netback system is not the formula to choose, because with it the power to set prices is handed over one hundred percent from producers to consumers″.

Anzola also said Venezuela ″won’t accept any cuts″ in its production quota of 1,55 million barrels a day.

Venezuela’s Energy Minister, Arturo Hernandez Grisanti, flew to Geneva Saturday to be there in advance for talks with colleagues before the conference actually begins.

Hernandez asked last week conference’s chairman Subroto, of Indonesia, to request OPEC Ministers to be in Geneva at least three days before the meeting begins so he would have time to explain them in detail the Venezuela’s proposal.

Venezuela, a founding member of OPEC 25 years ago, is considered an ″orthodox liner″ in the 13-strong group, and advocates a strict adherence to OPEC’s pricing and production guidelines.

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