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Opec meeting with non-Opec producers cancelled

25 Nov 2016 18:20 GMT
Opec meeting with non-Opec producers cancelled

London, 25 November (Argus) — A scheduled meeting grouping Opec and some non-Opec countries in Vienna on November 28 ahead of Opec's ministerial meeting has been shelved until Opec members can agree the terms of a potential output cut amongst themselves, an Opec delegate told Argus today.

"From our point of view, and also from the viewpoint of several other Opec countries, there is no point in having a meeting with non-Opec countries, because we cannot really ask non-Opec countries to participate in a cut before we in Opec agree on one," said the delegate.

Asked what the main obstacles to an agreement are, the Opec delegates said: "Iran and Iraq, no more and no less."

Iraq's offer to cut output is "meaningless", because Baghdad says its production is about 4.8mn b/d and wants to cut from that level, whereas independent secondary sources that Opec uses to measure the production of all its members put Iraqi output at around 4.5mn b/d, said the Opec delegate.

"They have not yet accepted the use of secondary sources" as a basis for determining production, said the Opec delegate.

Iran's position is also a problem, he said, because Tehran refuses to cut or freeze its output and also rejects the use of secondary sources to determine the level of its output. The agreement reached in Algiers on 30 September stipulated Iran would freeze output at "its current level", but Iran refuses to do that on the basis of secondary sources estimates of its production, said the delegate.

The only two Opec members that would be exempted from having to cut under any agreement reached next week would be Libya and Nigeria, he said. Both have seen their output plummet because of severe internal problems.

Algerian minister Noureddine Boutarfa is visiting Tehran to try to convince Iran to agree to cut output alongside other Opec members, said the Opec delegate.

Asked if the 30 November Opec ministerial meeting might not result in an agreement to restrain output, the Opec delegate said: "That is a possibility."