OPEC's President Vows to Cut Output until Prices Stabilize



LONDON (Dow Jones Newswires), Dec. 19, 2008

The Organization of Petroleum Exporting Countries' president vowed Friday to cut production to boost sagging prices, setting it on a possible collision course with consumer countries relieved at crude's slump from record highs.

Chakib Khelil indicated the group's desire to protect prices by continuing to cut output until they even out, two days after OPEC agreed to cut output by 2.2 million barrels a day.

"We will continue this reduction until the price will stabilize," Khelil told reporters on the sidelines of a meeting of 27 oil producing and consuming nations in London.

OPEC Secretary General Abdalla Salem el-Badri urged caution over calls for lower prices.

"Low crude prices do not translate into equal lower prices at the pump. The price that the end consumer pays comprises significant amount of taxation. This is especially the case in Europe and Japan," he said.

Business leaders from oil companies like Total SA, Exxon Mobil Corp., Royal Dutch Shell, BP PLC and Chevron Corp. are also attending.

U.K. Energy Minister Ed Miliband said the meeting was aiming to reach agreement on goals like less volatility, regulation and greater transparency but he and advisors stressed this was likely to be a "process" rather than yielding immediate results.

Miliband declined to comment in detail on OPEC production cuts, but said: "I think lower prices are necessary for the world economy."

U.K. Prime Minister Gordon Brown originally envisaged a conference of heads of state and government, but those plans were scrapped over whether to invite leaders of OPEC countries such as Iranian President Mahmoud Ahmadinejad and Venezuela's Hugo Chavez, who are shunned by London.

The U.K. eventually decided to hold the conference but to downgrade it to ministerial level.

Copyright (c) 2008 Dow Jones & Company, Inc.


RELATED COMPANIES
Company: BP plc more info
Operates 27 Offshore Rigs
 - BP Chairman Svanberg to Retire; Search Starts for Successor (Oct 19)
 - BP Midstream Partners Seeks To Raise Up To $893MM In IPO (Oct 16)
 - BP, Azerbaijan's SOCAR To Sign Caspian Sea Exploration Deal In 2017 (Oct 12)
Company: Exxon Mobil Corporation more info
Operates 13 Offshore Rigs
 - ExxonMobil Says Julia, Hadrian South Operations Back To Normal After Nate (Oct 10)
 - Iraq's Talks with Exxon on Southern Oilfields in Final Stages-Minister (Oct 09)
 - U.S. Gulf Oil Producers Start Evacuating Staff Ahead of Tropical Storm Nate (Oct 05)
Company: Shell more info
Operates 27 Offshore Rigs
 - API Panel Member: Voluntary Methane Program Forthcoming (Oct 06)
 - Eni Bets Big on Zohr Explorer Finding New Treasure (Oct 06)
 - Shell, Varo End Talks on Germany Refinery Stake Sale (Oct 06)
Company: Total S.A. more info
 - Total CEO: US Shale Oil Industry To See Wave Of Investment (Oct 18)
 - Total's CEO Says Will Try To Move Ahead With Iran Gas Project (Oct 17)
 - Total Expands Presence in Mexico (Oct 12)
Company: Chevron Corporation more info
 - Chevron Approves New Tech Investment To Raise Output At North Sea Field (Oct 20)
 - Canada's Keyera Signs Pact With Chevron To Transport, Store NGL (Oct 10)
 - Chevron Starts LNG Output at Australia's Wheatstone (Oct 09)
Company: OPEC more info
 - OPEC Sends Strongest Signal Cuts Will Be Extended to End-2018 (Oct 19)
 - World's Biggest Oil Traders See Wildly Diverging Crude Price (Oct 19)
 - OPEC's Output Curbs Squeeze World's Biggest Oil Refining Complex (Oct 16)