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Last Updated: Thursday, 24 April, 2003, 08:42 GMT 09:42 UK
Opec faces uncertain future
Ali Naimi arriving at Opec
Will this be Ali Naimi's last meeting?
Ministers from the Opec oil producers' cartel are meeting later on Thursday in Vienna for their first consultations since the collapse of Saddam Hussein's government in Iraq.

There is much uncertainty ahead of the meeting as it is unclear what role Iraq will play in the cartel and whether Iraq will be represented at this week's meetings.

The cartel must also decide how best to prop up crude oil prices after the recent sharp fall in prices, which have dropped to around $25 a barrel from almost $40 in the run-up to the war in Iraq.

Opec President and Qatari Oil Minister Abdullah bin Hamad al-Attiyah also says there is now too much oil on the market, as Opec members increased production to make up for the loss in Iraqi output when sanctions were imposed on the country.

But according to Saudi Oil Minister Ali Naimi, the best way to make the cartel's $25-a-barrel target work is not necessarily to cut quotas, but to make sure that rampant quota-busting is reined in.

On Wednesday, production resumed in the Rumaila oilfields in southern Iraq, just over a month after they were closed down because of the war.

Opec has 11 member countries, together accounting for 40% of the world's oil output, and aims to keep the price of a barrel of crude oil between $22 and $28 by adjusting the amount of oil produced.

Iraq's empty chair

Iraq is a member of Opec, but it has been excluded from the quota system for the past 11 years because of the UN sanctions programme.

Saddam Hussein's oil minister Amir Rashid Muhammad
Muhammad is unlikely to attend

Iraq is home to the second largest reserves of oil in the world, but it is likely to take some years before a significant volume of this oil comes to market.

Nevertheless, fellow cartel members will be eager to gain an indication of whether Iraq will comply with quotas as and when that becomes necessary.

And that problem is likely to remain unsolved until the new Iraqi administration, and an oil minister, are in place.

Ahead of the meeting, there had been confusion as to whether any self-appointed delegates would arrive from Iraq or even whether Saddam Hussein's ex-oil minister, Amir Rashid Muhammad, would attend.

An opposition leader who says he has been appointed deputy governor of Baghdad, Jawdat al-Obeidi, said this week he would lead a delegation.

But the US state department has said it believes that no-one will represent Iraq.

Saudi uncertainty

The second uncertainty set to overshadow the meeting is whether Ali Naimi, oil minister of Saudi Arabia, the cartel's lynchpin, will be in the same job following a cabinet reshuffle next month.

Mr Naimi, who has been Saudi oil minister for eight years, may no longer occupy the most important position in the cartel.

Saudi newspapers have repeatedly suggested that Mr Naimi might lose his position as part of a cabinet reshuffle due within the next two weeks.

"Nobody lives for ever," Mr Naimi said, adding that he will find out at the same time as everybody else whether he will be keeping his job.

Opec must still tackle the problem of trying to get countries to agree on whether to cut oil production this time round.

Oil prices are within Opec's desired range, but many ministers are worried about a supply glut this summer.

That may lead ministers to reduce production by up to 1.5 million barrels a day, some analysts suggest.

Pumping effort

US military officials on Wednesday said plans to re-start production in Iraq's southern oilfields in six to nine weeks from 6 April were ahead of schedule.

"We are pumping much quicker than our six-week target," said Colonel Michael Morrow, adviser to General Tommy Franks, the US forces chief at Central Command in Qatar.

"We had first pumping of 50,000 barrels yesterday and repairs will continue until we hit our target of 800,000 barrels a day."

Before the war, Iraq was pumping about 2.5 million barrels a day - 1.7 million in the south and 800,000 in the north.

Production in the northern fields is expected to be restored to 800,000 barrels a day in two to six weeks from 21 April, Colonel Morrow said, while Basra's 140,000-barrel-a-day refinery should be back on stream within a week.




WATCH AND LISTEN
The BBC's Rory Cellan-Jones
"Opec is meeting in an emergency session"



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