Zanganeh, Boutarfa Positive About OPEC Consensus on Cuts

Iran's oil minister says OPEC can reach a solid agreement on output and regulating the market in the Nov. 30 meeting
Algerian Energy Minister Noureddine Boutarfa (L) and Iranian Oil Minister Bijan Namdar Zanganeh in Tehran on Nov. 26.Algerian Energy Minister Noureddine Boutarfa (L) and Iranian Oil Minister Bijan Namdar Zanganeh in Tehran on Nov. 26.

Iran and Algeria on Saturday discussed the details of a tentative OPEC accord which aims to cut the group's production to lift prices and ease global oversupply.

The meeting between Iranian Oil Minister Bijan Namdar Zanganeh and Algerian Energy Minister Noureddine Boutarfa in Tehran was a last-ditch effort by the Algerian minister to unify the members of the Organization of Petroleum Exporting Countries ahead of a crucial meeting of OPEC ministers on Nov. 30.

"A proposal by the Algerian minister to allocate individual quotas to each OPEC member-state was discussed," Zanganeh was quoted as saying by Shana on Saturday.

He appeared optimistic that an OPEC supply cut deal is possible.

"Today's talks indicated that OPEC can reach a solid agreement on output and regulating the market. I am positive that prices will rise and that's what the global economy is waiting for," the minister said.

Zanganeh had previously said that an OPEC accord would help stabilize crude prices in the price range of $55 to $60 per barrel.

Boutarfa expressed optimism that a deal can be reached, saying next week's meeting of a high-level technical committee had adopted an Algerian proposal that "we believe is a good, balanced proposal and reflects the concerns of all parties."

He added that the supply cut proposal, which he did not detail, "represents a good basis for integrating the non-OPEC countries' contribution to the efforts of OPEC countries."

Few days earlier in Algiers, Boutarfa received his Saudi counterpart Khalid al-Falih as both sides expressed optimism about the prospect for a "just, balanced and fair agreement" during the next OPEC meeting in Vienna.

In an extraordinary meeting of OPEC producers in Algeria in September, the group agreed on the outlines of a deal to cut production to levels between 32.5 and 33 million barrels a day.

The 14-member organization posted a collective average output of 33.64 million barrels per day in October.

  Saudi Discord

However in a fresh challenge to the agreement, reports emerged on Saturday that Saudi Arabia has opted to skip talks with non-members including Russia on Monday ahead of the Nov. 30 ministerial meeting.

The move fueled consternation over the feasibility of an agreement that already looked shaky following disagreements over how much each country should be allowed to pump.

Data show that Iran is now producing close to 4 million barrels per day, almost on par with its peak output levels before the tightening of sanctions. But Tehran has so far shown no clear signal that it is willing  to lower or freeze production at current level as it has persistently boosted supplies since January.

Iraq has also sought exemption from the freeze, asserting that it should be allowed to raise production as it is embroiled in a costly war with the so-called Islamic State militant group.

Iraqi Oil Minister Jabbar al-Luaibi said last week that his country would offer three proposals to discuss an OPEC accord in the group's upcoming meeting later this month.

The talks are the follow-up on an initiative led by Saudi Arabia and Russia, world's top exporters, to put a lid on excessive supplies which led to the collapse of oil prices to $26 per barrel in January, the lowest in more than 12 years, from $115-high in mid-2014.

OPEC and producers outside the 14-member organization gathered in the Qatari capital Doha in April in an emergency meeting to prop up sagging prices.

But the meeting ended in agony after Saudi Arabia decided to pull out of talks in a last-minute decision in response to Iran's refusal to discuss the accord.

  Iran's Development Plans

The internal discord in OPEC comes as Iran is pressing ahead with plans to add more barrels to its production as it takes steps to open up its energy sector to foreign investment.

Mehr News Agency quoted Zanganeh as saying on Saturday that Tehran is preparing to solicit bids for several oil and gas projects, including South Azadegan oilfield, the oil layer of South Pars Gas Field in the Persian Gulf as well as a number of joint fields in the west, in the near future.

Zanganeh reportedly said that "exploratory projects will be the next in line to be tendered".

Iran has signed seven preliminary agreements with foreign oil companies, including Austria's OMV, France's Total, Germany's Wintershall, Indonesia's Pertamina, Russia's Lukoil and Zarubezhneft, to study its oilfields.

The government in Tehran hopes to seal two or three oil and gas deals by the yearend worth $10 billion.

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