Venezuela To Back Any OPEC Output Decision - Oil Min

sg.biz.yahoo.com Friday March 7, 6:21 AM

CARACAS (Dow Jones)--Venezuela would back any OPEC decision including a temporary suspension of the group's oil output quotas in the case a U.S.-led intervention in Iraq were to happen in the coming weeks, the nation's Oil Minister said Thursday.

"We will back any decision the group may take ... also if that means a temporary suspension of output quotas," Rafael Ramirez told reporters at the presidential palace Miraflores.

OPEC is meeting March 11 in Vienna and is expected to agree to suspend output restraints in the event of a war. But, in practice, due to rampant quota-busting in response to sky-high prices, OPEC already has dropped restraints and is essentially pumping at maximum levels.

Venezuela, however, is not likely to contribute above its official output quota level of 2.819 million b/d due to a crippling strike from which it is only recently recovering.

Earlier Thursday, Ramirez was quoted as saying production stands at 2.5 million b/d. "We're close to reaching our OPEC production ... by the end of this month," Ramirez was quoted as saying by state-run news agency Venpres.

The government's production level sharply contrasts with figures maintained by ex-staff of PdVSA (E.PVZ). They claim production stands only at 1.09 million b/d after PdVSA temporary shut in 500,000 b/d of crude production due to an export bottleneck in the east. The government, however, claims the 500,000 b/d have already been recovered.

A nationwide strike which started Dec. 2 and lasted for two months severely crippled exports and production, which stood at around 3 million b/d by the end of November.

The company is struggling to reach or go beyond the 2 million b/d production level, analysts have said. After focusing on easy oil fields that don't require much added pressure to get the oil flowing, PdVSA faces difficulties as mature oil fields are more labor and capital intensive and take more time to pump oil.

Experts have said they doubt PdVSA would reach 2.5 million b/d any time soon due to a lack of financial and human resources.

-By Fred Pals, Dow Jones Newswires; 58414-2887461; fred.palsdowjones.com