Opec production rises by 2pc despite Venezuela disruption

www.gulf-daily-news.com NICOSIA:

Opec oil production rose 2.2 per cent to 25.663 million barrels per day (bpd) in January from December despite the turmoil in Venezuela, the Middle East Economic Survey (MEES) reports.

Output from the cartel's 10 members without Iraq increased 1.2pc or 263,000 bpd to 23.11m bpd from 22.85m bpd in December.

Baghdad accounted for just over half of Opec's overall increase in January, the industry newsletter says in its tomorrow's edition.

Gulf states Kuwait, Saudi Arabia and the UAE together lifted production by 580,000 bpd while Iraq pumped 2.55m bpd, a level not seen since since the first quarter of 2002, MEES notes.

"High Iraqi production is only being achieved at the price of damage to reservoirs - particularly in the north," MEES says.

Iranian production fell slightly on lower exports at 2.263m bpd as domestic consumption remained steady on 1.45m bpd.

MEES says the general strike in Venezuela saw average production drop to 620,000 bpd in January from 1m bpd in December and 3m bpd before the strike began at the end of 2002.

Meanwhile, Kuwait is removing some oil rigs and workers from its northern oil fields in response to increasing tensions with Iraq, its northern neighbour, an official said yesterday.

However, production at the fields will not be reduced, said Bader Al Zuwayyer, spokesman for the state-owned Kuwait Oil Company.

"Because of the security circumstances, we are moving equipment and cutting on manpower, but production will not be affected," he said.

Non-essential equipment and workers were being removed from the northern Ratqa, Abdali and Rawdatain fields near the Iraqi border "until things go back to normal," Al Zuwayyer said.

Tensions between the United States and Iraq have been increasing in recent months, with the US demanding that Iraq dismantle all chemical, biological and nuclear weapons or face possible attack. Iraq has denied it has such weapons, and UN weapons inspectors said Friday they had yet to find evidence of those weapons.

Yesterday, the northern half of Kuwait officially became an exclusion zone where civilians were forbidden to travel without special military permits. Only those with business in the area will be granted the permits.

In recent days, Kuwaiti authorities forced Bedouins living in the north to break their camps and head south in long camel caravans.

Kuwait currently pumps about 1.8m bpd from its fields. Its 96.5bn barrels in proven reserves are the world's fourth-largest.

World oil prices climbed to their highest level in more than two years on Friday as traders bet on a war in Iraq despite diplomatic efforts at the UN.

New York's reference light sweet crude contract for March delivery rose 44 cents to $36.80 a barrel, the highest level since September 2000.