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OPEC Announces Increase of 1.7 Million Barrels of Oil Per Day Starting in April

Aired March 28, 2000 - 7:17 p.m. ET


STUART VARNEY, CNN ANCHOR: All right, we believe that the OPEC press conference is now starting in Vienna. Let's go to it live, see what's happening there.

It is in Vienna. It is about to get underway. They have made a formal announcement prior to the beginning of this conference which said that OPEC will be increasing its oil output by 1.7 million barrels per day.

I believe Dr. Rilwanu Lukman is about to begin.

DR. FAROUK MUHAMMED, DIR. PUBLIC INFORMATION, OPEC: Good evening -- good morning, ladies and gentlemen. I would like to welcome you to the secretary general's press conference and to apologize for keeping you waiting. Obviously, it was not deliberate so, please, can we get going, and then, of course, his excellency will answer your questions.

If I can just quickly go through the papers now. The 109th meeting of the OPEC conference, Vienna, Australia, 29 -- 27th to 29th, March 2000. The 109th meeting of the OPEC conference convened in Vienna, Austria, from the 27th to 29th of March 2000.

The conference unanimously elected his excellency, Ali Rodriguez Araqi (ph), minister of energy and mines of Venezuela, and head of its delegation as its president for a period of one year. His excellency, Abdullah Salem el-Badry (ph), secretary of the people's committee of the national oil corporation of the socialist peoples Libyan Arab (UNINTELLIGIBLE), and head of its delegation was unanimously elected alternative president for the same period.

The conference expressed its pleasure at the presence of high- level representatives from Angola, Mexico, the sultanic of Oman, and the Russian federation, oil-producing countries whose continued support is welcomed by the organization. The conference reviewed the secretary general's report, the report of the economic commission board, the report of the ministerial monetary and subcommittee, MMSE, and various administrative matters.

The conference decided to hold an extraordinary meeting of the conference on Wednesday, 21st, June 2000 in Vienna, Austria, in order to review the situation.

The conference requested the incumbent secretary-general, his excellency, Dr. Rilwanu Lukman to remain at his post for the remainder of his term. The conference expressed its appreciation to the government of the Federal Republic of Austria and the authorities of the city of Vienna for their own hospitality and excellent arrangements made for the meeting.

Nine OPEC member countries were released. Nine OPEC member countries -- Algeria, Indonesia, Kuwait, Socialist Peoples, Arab -- Libyan-Arab Jamanaria (ph), Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela meeting in Vienna on the occasion of the 109th meeting of the conference on the 29th of March 2000 decided to restore their production to their pre-March 1999 levels, making the individual country member output levels as follows: Algeria: 788, 000 barrels a day; Indonesia: 1,280,000 barrels a day. Kuwait: 1,980,000 barrels a day; Libya: 1,323,000 barrels a day; Nigeria: 2,033,000 barrels a day; Qatar: 640, 000 barrels a day. Saudi Arabia: 8,023,000 barrels a day; United Arab Emirates, 2,157,000 thousand barrels a day; Venezuela: 2,845,000 barrels a day, making a total of 21,069,000 barrels per day.

These nine member countries strongly emphasized their firm commitment to this agreement, which is effective from 1st, April 2000, and it stressed its intention to ensure full compliance.

I thank you very much, indeed, ladies and gentlemen of the press.

Now his excellency, Dr. Lukman, the secretary-general, will welcome your questions.

RILWANU LUKMAN, OPEC SECRETARY GENERAL: We'll do it one at a time. If you'll kindly raise your hand and then kindly identify your media, we'll appreciate that. Thank you.

Yes, please.

QUESTION: Mr. Lukman, can this be called an agreement, given the fact that agreements have to be adopted unanimously according to article 11-C of the statute?

LUKMAN: (OFF-MIKE) ... in the past, where instead of a resolution, we have had been an agreement that is ascribed by a certain number of members, or we have had resolutions in which certain members have opted out, either by reservation or by making endorsement on the resolution to opt out. So this is not unusual.

QUESTION: Beth Evans, with (UNINTELLIGIBLE) News. Did the pressure from the U.S. influence today's OPEC decision at all?

LUKMAN: As an organization of sovereign states, the decisions of OPEC were taken in the best interests of the member countries. And obviously, as producers of petroleum, with our customers in mind, our decisions are also governed by the likely effect we believe the decision will have on the market, and we have taken into consideration the interests of all of the international economy, of which you are a part, as well as think in terms of other oil producers who have worked with us during the past couple of years in order to moderate the market and show stability. So we will talk about pressures. We will talk about influences. But the sum total of our decisions are taken after taking all factors into account, and principally to protect the interests of our member countries as well as the interests of our customers.

QUESTION: As a follow-up, was the pressure from the U.S. from the U.S. discussed in the meetings today upstairs?


QUESTION: Thank you.

LUKMAN: You're welcome.

QUESTION: Was there a price target discussed or a range of prices that OPEC members would like to see?

LUKMAN: Well, whenever we set volumes, we're looking at the market. Obviously, we have prices in mind. We don't operate in a vacuum. You don't just cut production or increase production for the sheer heck of it. You must have some objective in mind. And you would have -- those of you who are veterans of attending these press conferences, for instance, know that we had a target price -- it's an open secret -- of $21 per barrel, has been on our books for a very long time, and from time to time, we take remedial actions in order to correct perceived aberrations in the marketplace, to restore prices to level what we believe are more reasonable, more indicative.

QUESTION: You said 21?

VARNEY: You've been watching the live press conference from OPEC in Vienna, Austria, where the organization has decided to go back to the production levels for oil which were imposed before March 1999.

WILLOW BAY, CNN ANCHOR: Nine OPEC members, not a unanimous decision with Iran, of course, being the standout.

VARNEY: OK. That, by the way, is a 1.7 million barrel per day increase in the production of oil as of April 1 this year.



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