Iran says world market is adequately supplied with oil

Iran says world market is adequately supplied with oil

TEHRAN (PIN) – Market was supplied with sufficient oil, reiterated Iran’s Oil Minister Gholamhossein Nozari in a press briefing here yesterday.

He, however, said, “If data and statistics show that the market needs more output, we have the capacity to produce more oil, but we act according to the OPEC agreements.”

Talking about his country’s stance on oil output hike in the next OPEC summit, Nozari said, “We believe that the market’s need should be met and we aim to expand cooperation in the OPEC.”

He added some OPEC member states agreed with an increase in output and some opposed as they argued that supply and demand were balanced.

Nozari said the output policy would be studied in the OPEC meeting in Abu Dhabi on Dec. 5.

“Iran is currently producing 4.145 million barrels of oil per day,” said the official, adding, “We are capable of producing 4.3 million bpd and the figure will soar to 4.2 million bpd by March 2008.”

He added Iran held a 14.7 percent share of OPEC’s output, the largest after Saudi Arabia’s.

OPEC last decided to raise output in September when they agreed to provide an extra 500,000 barrels a day to the market, effective November 1.

Despite pressures from developed countries, no decision was made at a rare OPEC summit last week.

Although some OPEC ministers expressed concern that expensive crude would eventually dampen demand for oil, they indicated that blame for the near triple-figure price lay outside the group, AFP reported.

Ministers in Abu Dhabi are expected to discuss output policy, with any breach of the 100-dollar level before then likely to heap pressure on the group to act.

Last Friday, New York’s main contract, light sweet crude for January delivery, rose 99 cents to a record close of 98.18 dollars per barrel. The contract had hit a historic intraday record high of 99.29 dollars last Wednesday.

---------------------------- Revenues

Nozari predicted that Iran would earn 60 billion dollars from oil sales in its current year (ends March 19, 2008).

He said the government was not allowed to use one dollar of its oil revenues without the agreement of Majlis (parliament).

“Petrodollars must be used within the Budget Law and the remaining portion should be deposited into Oil Stabilization Fund,” Nozari underlined.

He said foreign companies were welcome in Iran’s oil projects, however added the overseas enterprises needed to choose the right path.

Talking about anti-Iran sanctions and their impacts on his country’s oil industry, Nozari said, “We are turning a blind eye to sanctions, taking every development as an opportunity.”

He pointed to the signing of two contracts with Asian states was as valuable as all European agreements and added, “The contracts on the development of North Pars, Golshan, and Ferdowsi are the two agreements, in which some 40 billion dollars will be invested.”

------------------------------------- OPEC achievements

Iran’s oil minister elaborated on the achievements of the third OPEC summit recently held in Riyadh, the capital of Saudi Arabia.

He referred to the signing of an agreement on gas exports with Bahrain as one of the achievements of the OPEC summit.

The minister said the agreement was inked on the sidelines of President Mahmud Ahamdinejad’s presence in the summit.

Nozari said Iran also welcomed Bahrain’s participation in the development plan of one of its gas fields.

He added oil ministers of OPEC member states held a session and oil, economic, and foreign ministers held another session, discussing the general goals of the body and finalizing the communiqué of the third summit.

Riyadh played host to the summit on Nov. 17 and 18 under three general themes: Providing Petroleum, Promoting Prosperity, and Protecting the Planet.

The summit was preceded by several activities, including a two-day symposium in which leading energy ministers and international oil experts took part.

The symposium covered topics such as “Energy for Sustainable Development”, “OPEC’s Role in Securing Oil Supplies and Boosting Stability, and “The Future of Oil in the Global Energy Mix”.

--------------------------------------- Dollar switch

Switch from dollar to alternative currencies in the OPEC basket was proposed by Iran, said Nozari.

Iran, Venezuela, Ecuador, and somehow Algeria insisted on the switch, said the minister, adding the heads of these states argued that the falling dollar had caused a host of problems for oil producing countries.

He said the proposal was made in the OPEC summit at a time that Western media blamed oil exporting countries particularly OPEC member states for the increase in oil prices and decrease in global economy’s development.

Nozari said the proposal was made by Ahmadinejad and some countries welcomed it, adding oil and economic ministers of OPEC member states would study the proposal and discuss it in the next OPEC summit.

Nozari said a committee would also investigate the possibility of dropping the link with the dollar and consider using a basket of currencies instead. Iraq’s oil minister confirms that a committee was being formed to look at the issue.

According to him, OPEC plans to study the weak U.S. dollar’s effect on the oil group’s earnings.

Oil is priced in U.S. dollars on the world market. The dollar’s recent plunge has contributed to the steady increase in oil prices, but it’s also eroded the value of dollar reserves held by oil producing countries.

Nozari said studies conducted by Petroleum Ministry of Iran and other OPEC members showed that the real price of oil now sold at 90 to 95 dollars per barrel stood at 48 to 54 dollars when the prices in 2000 were the basic rates.

--------------------------------------------- Environment, industrialized states

The oil minister said the OPEC summit also put great emphasis on protecting the environment, establishing peace across the world, and transferring technologies.

“Most of oil consumers are the industrialized countries that pollute the environment more than other states and they need to help protect the environment,” justified Nozari.

He said Iran had also proposed the setup of an OPEC bank to keep its members’ funds, adding the proposal would be studied in the future meetings.

------------------------------ Revision

Nozari, once again, voiced his opposition to Petroleum Ministry’s structure, calling for its improvement.

He said the articles of association of Petroleum Ministry presented to the cabinet had introduced the NIOC as a holding for the three companies – National Iranian Oil Refining and Distribution Company (NIORDC), National Petrochemical Company (NPC), and National Iranian Gas Company (NIGC) – arguing that all of them had the capacity to work at the same level.

The new minister said National Iranian Gas Company (NIGC) would grow as large as and even larger than National Iranian Oil Company (NIOC) in the near future.

“The (statistics of) region and the world show that the share of gas in production and consumption is growing,” he justified.

“So, we are drafting a letter to the government to revise the articles of association,” said the ranking official.
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