Venezuela to Produce Above OPEC Quota

www.menafn.com AP Online - Friday, March 14, 2003

CARACAS, Venezuela (AP) - Venezuela plans to produce above its OPEC crude oil output quota to make up for lost revenue during a two-month strike, the oil minister said Friday.

Rafael Ramirez wouldn't say how much Venezuela would pump above its 2.8 million barrels a day quota. Output is 2.9 million barrels a day now, the government says.

"We have to do it gradually so as not to affect the oil market too much," Ramirez told state television station Venezolana de Television. "It will reach a level that will compensate what we stopped selling in the market."

Ramirez said Venezuela had an agreement with the Organization of Petroleum Exporting Countries allowing it to overproduce.

Venezuela is recovering from a political strike that petered out last month. Oil production reached a low of 200,000 barrels a day at the height of the walkout, which cost Venezuela $6 billion. It also forced Venezuela to spend $540 million on gasoline imports to make up for severe shortages.

Executives fired from the state oil monopoly for participating in the strike say production is only 2.1 billion barrels a day. The government fired almost half the 35,000-strong work force at Petroleos de Venezuela SA for walking out.

On Thursday, Venezuela brought its largest catalytic cracker back online, bringing the country a step closer to resuming gasoline exports to the United States. Venezuela was the world's fifth-largest exporter before the strike. Venezuela crude and refined products accounted for 14 percent of U.S. oil imports last year.

Venezuela also announced Thursday that it had stopped importing gasoline.

Ramirez also said there was an $8 to $10 premium on international oil prices because of U.S. threats to lead an attack on Iraq. He said there was enough world production to meet demand. OPEC agreed Tuesday to stick w

OPEC agreed Tuesday to stick with its production target of 24.5 million barrels a day.