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Venezuelan Energy Minister Says Oil Prices Not Linked to Production

Posted on: Tuesday, 20 September 2005, 15:01 CDT

Text of report by Radio Nacional de Venezuela website on 18 September

Saving energy "quickly" and investing in the refinement capacity of oil by-products are the measures proposed by Venezuela to put an end to the high prices of crude oil and its by-products.

Venezuelan Energy Minister Rafael Ramirez stated the above upon his arrival in Vienna to take part in a meeting of the Organization of Petroleum Exporting Countries (OPEC) to start on 19 September, where a possible increase in the group offer which is currently fixed at 28m barrels per day will be negotiated.

The minister said Venezuela does not oppose the increase but at the same time he pointed out that such measure will not have the desired effect of alleviating pressure over prices. "We believe the market is well supplied, that there is no problem with crude oil, the serious problem we have now is related to refinement, it is not necessary to increase production. If we increase the number of barrels, the situation will not change," he said.

He said the current situation with the oil infrastructure in the Gulf of Mexico where due to the damage inflicted by Katrina there are now 800,000 b/d of refinement capacity missing, that is, refined products, "not crude oil".

As for the problem with the refinement of oil by-products Ramirez said everyone has to help. Consumers have to help. "We need to save energy quickly, we have to create an energy saving plan, we have to lower taxes imposed on energy in consumer countries and we have to create refinement capacity." Ramirez said.

Meeting

The 137th OPEC Ministerial Conference, a two-day meeting that will begin on 19 September in the Vienna secretariat of this organization that holds control over nearly 40 per cent of crude oil production worldwide, is marked by the unstoppable upward tendencies in the prices of "black gold" and its by-products.

Analysts believe that the OPEC ministers will finally approve an increase in the official production rate of ten of the member countries (all except Iraq) at a volume of between 500,000 b/d and 1m b/d, but they agree that this is a psychological measure which will not have a major influence in the development of prices. "We want to discuss here what the importance of increasing production. It has nothing to do with the market situation," Ramirez said.

Source: BBC Monitoring Americas

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