Revenues for members of the Organization of Petroleum Exporting Countries would rise substantially if members cut total production from the january level of about 27 million b/d of crude oil and condensate.
That's the view of Mackay Consultants Ltd., Inverness, Scotland, which said OPEC production to maximize revenues is 23.5 million b/d of oil and condensate. This is 13% below January production.
David Rennie, Mackay analyst, said with current condensate production at more than 2 million b/d, achieving the optimum level would require oil production substantially less than the 24.52 million b/d ceiling agreed by OPEC members last November (OGJ, Dec. 6, 1993, Newsletter).
Mackay said production at 23.5 million b/d of oil and condensate could raise total OPEC revenues in 1994 to $161 billion.
Rennie believes it would be hard for members to agree to a 3.5 million b/d production cut at OPEC's March meeting. He suggested a 2-2.5 million b/d cut is more realistic and would boost price to $16.50-17.50/bbl.
"The recurring problem for OPEC is the difficultly in getting implementable, realistic agreements from members on cuts in production," Rennie said. "Some countries, notably those affected by the gulf war, are very reluctant to agree to any reductions."
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