U.K. resists oil pressure

Press, 30 January 1986, Page 8

U.K. resists oil pressure

NZPA-Reuter London The British Government would not change North Sea oil production despite heavy pressure from O.P.E.C. to curb output after the recent crash in world prices, the Prime Minister, Mrs Margaret Thatcher, said yesterday. Replying to a Parliamentary question on whether the Government planned to discuss cooperation in managing oil prices with the Organisation of Petroleum Exporting Countries and other producers, she said “No, I do not think so. The U.K.

maintains the freest oil province in the world subject only to technical limits.

“Decisions on production levels are entirely in the hands of the production companies. A sharp drop in the price of British North Sea crudes last week sent sterling plunging, despite comments from the Treasury that oil accounted for only 6 per cent of national income.

Britain’s long-standing laissez-faire production policy has irritated O.P.E.C. as it tried to rally

support from producers outside the cartel to stem the price slide. Saudi Arabia’s Oil Minister, Sheikh Ahmed Zaki Yamani, forecast last week that prices could fall to SUSIS a barrel soon if such co-operation were not forthcoming, particularly from Britain. Industry analysts say that Britain, which produced 2.5 million barrels a day last month, is pumping almost flat out. despite a world glut. Earlier, Britain’s key Brent grade briefly recov-

ered to SUS2O a barrel on the European spot market for the first time since early last week on a wave of speculative buying. But Mrs Thatcher’s comments sent Brent back down to around $U519.75, almost SUSIO adrift of levels early last month. “Although there was nothing new in the statement, there was little support for the market and this was enough to drive even that out,” one American-based broker said.