Norway Does Not Plan to Reduce Production

The Norwegian oil minister said he sees no need for Norway to cut its oil production despite this week's decision by OPEC to cut output from November 1.

In the first half of 2002 non-OPEC member Norway, which pumps three million barrels per day, had supported production cuts by the oil cartel by making its own cuts to support prices.

"Our assessment is that prices are still high -- above $25 a barrel -- and we do not see any need to make production cuts as we did from January to July 2002," Oil and Energy Minister Einar Steensnaes said.

Steensnaes said that prices would need to be below $20 per barrel for Norway to consider cuts, but he said that the trend of prices was as important as the level. Benchmark Brent crude last stood at $26.67.

"It's not just the prices, but whether prices are moving downwards," he said. "Prices under $20 a barrel must be acceptable for a short period, but it is the dynamics in the market that decides (if a cut is needed)."

OPEC agreed on Wednesday to reduce production for 10 members by 900,000 barrels per day to 24.5 million barrels per day from the start of November.

Norway is the world's third largest exporter behind Saudi Arabia and Russia. Norway's policy is to decide unilaterally on any output curtailments, usually giving industry free rein to decide how much to produce. It keeps its distance from OPEC and does not attend its meetings. In 2002, when Brent crude dropped below $20, Norway cut its output by 150,000 barrels per day to help support prices.
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