Date: 08 Mar 2000
Time: 07:37:15
Remote Name: 156.29.145.175
03/08/2000 Dow Jones Energy Service (Copyright (c) 2000, Dow Jones & Company, Inc.)
RIYADH -(Dow Jones)- Iranian Oil Minister Bijan Namdar Zangeneh and his Saudi counterpart Ali Naimi began talks in Riyadh Wednesday at a secret location.
The two ministers are trying to close the gap in their views on the size and timing of a possible increase in oil supply by the Organization of Petroleum Exporting Countries to tame surging oil prices.
At the New York Mercantile Exchange Tuesday, nearby April crude futures rocketed to as high as $34.25 before easing to $34.20, a gain of $1.92 on the day and their best level since November 1990, just ahead of the Gulf War.
Officials described the meeting atmosphere as optimistic on possible rapprochement in the two countries' positions toward the oil market.
Officials said unlike other meetings with oil officials, the Saudis have chosen a secret location to meet with the Iranians away from reporters.
A final statement on the talks is expected later Wednesday. Saudi Arabia and Iran are leading members of OPEC.
-0- 08/03/00 07-11G Before departing Tehran earlier in the day, Zangeneh said that his meeting with Naimi aims at consolidating unity and convergence among OPEC member states, the official IRNA news agency reported. Zangeneh added that the talks comes within the framework of regular consultations made by OPEC oil ministers ahead of the full OPEC ministerial meeting scheduled for March 27 in Vienna.
The two oil ministers have now finished the first session of the meeting and will resume talks after lunch.
A Saudi official said it's unlikely they will announce any specifics on production after their one-day meeting Wednesday.
Both Iranian and Saudi officials played down their differences regarding the extension of the OPEC cuts agreement, adding that full details will be known at the forthcoming OPEC meeting in Vienna March 27.
Last week, Naimi met with the oil ministers of Venezuela and non-OPEC Mexico. The three jointly said the market needs more oil, but didn't specify when or by how much.
Iran , on the other hand, has repeatedly said that the oil market doesn't warrant an increase during the second quarter, mainly because of an expected drop in demand.
In agreements signed in 1998 and 1999, OPEC, excluding Iraq, and some non-OPEC producers like Oman, Norway and Mexico, agreed to remove about 5 million b/d from the market through March 31, 2000 to raise oil prices.