KUWAIT SEES OPEC OUTPUT OVER CEILING TO END-YEAR
OPEC output for the second half of 1987,
including that of Iraq, will be above the official 16.6 mln
barrels per day (bpd) output ceiling agreed by OPEC Saturday,
Kuwait oil minister Sheikh Ali al-Khalifa al-Sabah, said.
    Iraq refused to sign the pact, by which OPEC maintained its
ceiling at 16.6 mln bpd for both the third and fourth quarters
of 1987. In December, OPEC set a provisional fourth quarter
level of 18.3 mln bpd, now cut back to the third quarter
target.
    Ali told a news conference that including Iraq, "OPEC third
quarter output will be between 17.5 and 17.7 mln bpd while
fourth quarter output will be nearly 18 mln bpd"
    Ali did not detail what effect he thought these production
levels would have on prices.
    Iraq has an official first half quota of 1.466 mln bpd,
rising to 1.54 mln in the second half, but has refused to
adhere to it and has recently been producing around two mln
barrels per day, exporting it through pipelines to Saudi Arabia
and Turkey. Iraq's export capacity will be further boosted when
a 500,000 bpd oil pipeline via Turkey comes on stream in about
September.
    Iraq has been insisting on a quota equal to its Gulf War
enemy Iran, which has a quota of 2.255 mln bpd, rising to 2.369
mln in the second half.
    Ali said the position of the 400,000 bpd production from
the Neutral Zone between Saudi Arabia and Kuwait, which has
been supplied to Iraq as war relief crude, was fixed. "We will
not discuss it. There will not be any change," he said.
    Ali said the conference, which began Thursday and ended
Saturday evening, had been too short for all necessary problems
to be adressed. "We are overdoing it in holding too short a
meeting. We sweep a lot under the carpet," he said.
    Ali said the problem of price differentials between the
prices of various OPEC crudes had not been dealt with properly
at the meeting.

    Ali said "The problem of differentials is a real one. I
would hate to be producing today a light crude and that problem
has not been dealt with properly. Light crudes are overpriced
relative to heavy crudes."
    Asked if the issue of differentials would be raised at the
next OPEC meeting to be held in Vienna on December 9, Ali said
"If my crudes are affected I will raise the issue, I will not do
the work of another minister."
    Kuwait's own crudes range from medium to heavy grades.
    OPEC reintroduced fixed prices on February 1, with a spread
of 2.65 dlrs a barrel between its lightest and heaviest crudes.
       
 Reuter
