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OPEC Considers Reducing Production - 2003-12-03

Oil ministers in the Organization of Petroleum Exporting Countries, OPEC, are considering a cut in production quotas to avoid a price collapse next year.

Ministers from the 11 OPEC countries meet Thursday to decide whether the cartel's production quota of 24.5 million barrels per day should be adjusted.

Petroleum analysts say OPEC might decide on cuts effective in February. Alternatively, they say, OPEC could defer a decision altogether and review policy again at a special meeting in January.

Ministers from Iran, the United Arab Emirates and Indonesia said on their arrival for the Vienna meeting that the quotas should stay unchanged.

In September OPEC made a surprise decision to cut quotas by 3.5 percent, a response to rising supplies from Iraq and Russia.

Iraq exported just over 1.6 million barrels per day last month from its Gulf Basra export terminal in the south of the country. It plans to increase production from its southern oil fields, but sabotage is delaying opening an export pipeline in the north. Russia, which is not a member of OPEC, is producing 8.6 million barrels per day, more than OPEC's leading producer, Saudi Arabia.

The oil cartel is worried that Russia will not go along with any production cuts and that prices will fall next year with a glut of oil on the market. OPEC Secretary General Alvaro Silva-Calderon says the cooperation of non-OPEC nations such as Russia is vital.

"We need the cooperation with non-OPEC [nations]," he said. "The task of stabilizing the market is not for OPEC alone. The most important non-OPEC producers are our observers who come here to our conference and work not only for formal speeches but in concrete economic questions and shared figures. We expect the cooperation with the non-OPEC in order to stabilize the market, specifically in the coming year."

OPEC ministers will also decide whether they should keep Mr. Silva-Calderon as secretary general or select a successor.