GENEVA (AP) Oil ministers in the ORGANIZATION OF PETROLEUM EXPORTING INDUSTRIES ended three days of talks today with an agreement to defend OPEC's share of world oil sales, a joint statement said.
The 13 ministers stopped short, however, of formally breaking from their failing strategy of propping up oil prices by restricting production.
Sources said the ministers agreed to focus on keeping production up even if it means risking a major decline in prices.
"I'm not intending to declare a price war," said Venezuelan oil minister ARTURO HERNANDEZ GRISANTI, the conference chairman. Grisanti told reporters that "OPEC is not without instruments and Ways and means to challenge non-OPEC producers for a stable share of the market."
"The conference decided to secure and defend for OPEC a fair share in the world oil market, consistent with the necessary income for member countries' development," said a statement issued at the end of the conference.
Grisanti said the ministers reaffirmed all previous OPEC agreements, suggesting it has not formally abandoned its base price of $28 (U.S.) a bbl and a production sharing system.
They created a new committee of five headed by Grisanti to study how OPEC could defend its market share and to make recommendations to a new ministerial meeting expected to be held early next year. The committee will include the minister from Indonesia, Iraq, Kuwait, and the United Arab Emirates.
The Geneva agreement, if carried out, could mark a turning point in the volatile history of oil prices since OPEC shocked the world 12 years ago with an embargo that at triggered a series of sharp price increases.
The ministers also have agreed to form a committee of six member countries to study how the new strategy could be implemented and to recommend to an OPEC conference early next year what minimum level of production OPEC would seek to defend, said the Ecuadorian deputy oil minister, FERNANDO SANTOS ALVITE.
The committee is headed by Venezuela and the other members are Iran, Iraq, Algeria, the United Arab Emirates and Kuwait.
Asked whether all 13 ministers agreed to the principle of defending market share at the cost of allowing prices to decline, Santo said: "Yes, everybody to defend our share of the market."
Santos and several other oil ministers had said since the outset of their conference Saturday that they were considering giving up their losing battle to defend the official $28 a bbl price.
Price competition would be expected to heighten early next year when the seasonal rise in demand for home-heating oil crests and oil companies trim their stocks in anticipation of lower prices.
Meanwhile, in Nicosia, Cyprus, the meekly MIDDLE EAST ECONOMIC SURVEY oil review said today its preliminary estimates show crude oil production by OPEC states averaged 18.075 million bbls a day in November.
The review said this compares with 17.335 million bbls a day in October, 14.097 million bbls a day for the third quarter of the year and the OPEC quota ceiling of 16 million bbls a day.