LONDON, 22 February 2005 — The chief executive of French energy giant Total believes Western oil companies must have better access to oil and gas reserves in OPEC countries and Russia to continue increasing their output, according to an interview with The Times newspaper published yesterday.

Thierry Desmarest said Total was able to replace its production only by exploration - the “classical route” of finding new oil reserves. “Our target is to continue to grow (output) at 4.0 percent per year. To obtain the additional reserves to keep production growing at 4.0 percent per year we need to conclude agreements with producing countries to get access to reserves,” he said.

The French oil chief meanwhile pointed to Total’s investments in OPEC countries such as Iran, Nigeria and Venezuela as key elements of its portfolio. “In OPEC, some countries are open, but even when they are open the decision process is frequently slow,” he said.

Desmarest added that more investment was needed by the Organization of Petroleum Exporting Countries to restore the security margin between oil consumption and supplies, according to The Times. He said the margin was “a bit short” and would be affected by a slowdown in growth in Russia.

Asked whether prices could continue to rise if OPEC countries did not quickly open their industry to significantly greater investment, Desmarest said: “I would say that is a high probability. But the other point we don’t know is if the Asian demand will continue to grow at the high level we have seen.” OPEC has meanwhile made it clear that it could reduce its production at its next meeting on March 16 in Isfahan, Iran.

Meanwhile, oil prices rose in London yesterday, supported by fears that OPEC could cut production next month, even amid colder weather in the US northeast and Europe, analysts and traders said.

In London, the price of Brent North Sea crude oil for delivery in April gained 54 cents to $46.88 a barrel in late deals. New York’s main contract, light sweet crude for delivery in March, closed up 81 cents to $48.35 a barrel on Friday. Heavy New York buying had been sparked by a cold wave hitting the US northeast — a major consumer of heating oil — and traders wanting to avoid being short ahead of a three-day US holiday weekend, dealers said.

Prudential Bache trader Christopher Bellew said prices continued to gain yesterday, also because of colder weather across Europe.

The Centre for Global Energy Studies (CGES) predicted in its monthly report that oil prices would break 50 dollars per barrel in London by the middle of the year should OPEC decide next month to reduce output by at least 500,000 barrels per day. “Without a significant increase in commercial oil inventories over the two summer quarters, capacity limits throughout the supply chain will send prices soaring,” the study said.

Traders, meanwhile, were keeping a close watch on major oil producer Venezuela, OPEC’s only Latin American member.

Venezuelan President Hugo Chavez threatened Sunday to suspend oil exports to the United States if someone tried to assassinate him, adding that US President George W. Bush would be to blame.

Venezuela sells about 1.5 million barrels daily to the United States.

Speculative hedge funds, whose participation in the market has climbed swiftly in recent years, increased their long positions in US crude futures slightly to 31,628 lots in the week ended Feb. 15 in a bet prices would rise.

On the consuming side, China reported producer prices rising 5.8 percent in the year through January, the slowest rate in eight months, which analysts said would reduce pressure on the government to cool economic growth. China’s booming economy has been one of the main driving forces behind sky-high global oil prices.