More Signals of Doomed Freeze Talks As Nigeria And Libya As Well As Iran Are Cited As Having Right to Raise Output

Several OPEC members intend to raise output

A series of meetings in advance of the Organization of the Petroleum Exporting Countries (OPEC) freeze talks in Algeria have produced yet more rhetoric that market stabilization must occur – but that Nigeria and Libya, along with Iran, have the right to boost production.

That was the main message delivered by Noureddine Bouterfa, energy minister for Algeria, as he shuttled between Paris and Moscow on Friday to prepare for his hosting duties at the talks later this month.

He told reporters, "Iran has the right to increase production to the pre-sanctions level; it is also the right of Libya, Nigeria to increase."

When asked if higher output could be accommodated within the framework of a freeze deal, Bouterfa replied, "all solutions are possible."

This came on the heels of another puzzling remark made by Alexander Novak, energy minister for Russia, who reiterated his support for a freeze during the G-20 summit in China, saying that his country is ready to cap output at the level of any month in the second half of this year.

The problem from a fundamentals point of view is that the second half of this year has seen record output volumes from both Russia and OPEC.

Another development that could affect the freeze talks is fresh OPEC data based on secondary sources and seen by Reuters that Iran's steep oil output growth has stalled in the past three months, with an output of just 3.63 million barrels per day (bpd) recorded in August.

Although Iran indicated it might support the idea of an OPEC cap, it has steadfastly refused to participate in any deal until it reaches a pre-sanctions output of at least 4 million bpd (a number that was increased this week to 4.2-4.3 million bpd, according to reports).

The same OPEC data showed Saudi Arabia production dropping by 40,000 bpd in August, but it's unclear what influence this would have at the talks.

Even if the Algeria talks produce nothing, Bouterfa promises that the dialog will continue at OPEC's next official meeting in Vienna: "If we have an agreement in Algiers it's very good, but if we don't have an agreement, it's also good."

In upping the output figure required for the Islamic republic to play ball with other OPEC members,  Seyed Mohsen Ghamsari, director for international affairs for the National Iranian Oil Company, said earlier this week that it will be Bijan Zanganeh, oil minister for Iran, who will call the shots in Algeria.