OPEC Talks at Standstill : Kuwait Rejects System of Oil Output Quotas

Kuwait stood alone Wednesday in publicly rejecting an OPEC proposal, backed by a majority of the members, to extend a limit on the cartel’s oil production to the end of the year.

Oil ministers of the 13 members of the Organization of Petroleum Exporting Countries met in small groups for a third day of strategy talks, and officials said no policy decisions had been made.

The full conference was in suspension while committees discussed details of pricing and production policies. James Audu, an OPEC spokesman, said the conference will reconvene, possibly today, once the panels have firm recommendations.

Belkacem Nabi, the oil minister of Algeria, told reporters that most member countries are willing to accept a simple extension of the current arrangement that is limiting OPEC oil production to an estimated 16.8 million barrels a day. A barrel is the equivalent of 42 gallons.

Extension Likely

The cartel leaders are trying to work out a more permanent set of production controls to replace the current one, which is due to expire Oct. 31.

But failing agreement on a new system, a two-month extension of the current accord is the most likely outcome of the Geneva meeting, said Mana Said Oteiba, the oil minister of the United Arab Emirates.

Kuwait, however, stressed that it is not willing to accept a deal that would keep its production quota at the current level of 900,000 barrels a day.

Ali al Khalifa al Sabah, the Kuwaiti oil minister, was asked by reporters during a brief encounter in a Geneva hotel whether he will continue to insist on a redistribution of production quotas within OPEC’s overall output ceiling.

“Very much so,” he said without elaborating. Ali was quoted in a Kuwaiti newspaper Wednesday as saying that his country will insist on a bigger share of OPEC production.

Later, Ali told reporters that Kuwait should be given a bigger percentage of OPEC production, regardless of the cartel’s overall total. He did not specify the percentage he wanted. When pressed, he would not say whether he would persist in this demand if it threatened to ruin the talks.

Others Resist Request

Other OPEC members are resisting Kuwait’s request. If Kuwait gets a larger share, the portion left for division among the other members would be smaller. None is likely to accept that.

It appeared likely that Kuwait’s resistence, backed less firmly by Saudi Arabia, would prolong the Geneva discussions for at least a few more days.

Despite Ali’s comments, some analysts said they still believe OPEC will decide to keep the current arrangement on production controls through December.

“When push comes to shove they’re going to run out of time,” said Stephen Smith, a senior vice president in the energy office of Data Resources Inc., a Lexington, Mass.-based research and consulting company.

“They’ve done too well in the past couple of months to let it break down now,” Smith said.