RIYADH, 7 February — The Kingdom said yesterday it was determined to ensure "reasonable" oil prices for both producers and consumers that would not stunt world economic growth, the Saudi Press Agency reported.

The resolution was taken at a meeting of the Supreme Council for Petroleum and Mineral Affairs chaired by Custodian of the Two Holy Mosques King Fahd. The meeting reviewed developments in the world oil market.

The Council said the Kingdom, the world's largest oil producer and exporter, would continue to seek "balance in the oil market taking into account the interests of producers and consumers and continued world economic growth," SPA reported.

The council also reaffirmed its policy to ensure "stable oil supplies and prices at reasonable levels", the agency said. The Kingdom set up the high-power council last year to oversee oil and gas policies.

Petroleum and Mineral Resources Minister Ali Al-Naimi said on Monday oil prices were reasonable at current levels around $25 a barrel and saw no need for further output cuts.

Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries cut collective output by 1.5 million barrels per day (bpd) from Feb. 1 ahead of an expected fall in seasonal demand. But some analysts have warned OPEC that by restraining output and boosting prices it could cause further strains on a slowing US economy, ultimately crimping fuel demand.

Venezuelan Energy and Mines Minister Alvaro Silva said yesterday he prefers a price between $25 and $28 a barrel for OPEC's crude oil reference basket as anything below that causes "problems" for the 11-member organization.

"The official band is still between $22 and $28 but we have noticed that it can be between $25 and $28 without causing disturbances (to the world economy). Below $25 it causes problems for the countries (of OPEC)," Silva told journalists at a briefing.

The Petroleum Council reviewed the outcome of an international energy conference held in Riyadh on Nov. 19 last year. The Riyadh conference was the largest such function after the forum was launched in 1991, a press statement said. "The participating countries agreed on the importance of oil price stability at reasonable levels," the statement said.

 

Yanpet expansion: Meanwhile, Exxon Mobil Chemical said yesterday that it had completed expanding its joint venture Yanpet petrochemical complex in Yanbu, making it the largest polyethylene plant in the world.

The complex is a 50-50 joint venture between Mobil Yanbu

Petrochemical Company Inc. and Saudi Basic Industries Corporation (SABIC), which is 70 percent owned by the Saudi government.

The expansion boosts the plant's annual capacity of ethylene, used to make polyethylene, a plastic widely used in packaging, to about 1.7 million tons per year (tpy).

It includes a second 800,000 tpy steam cracker, and a new 535,000 tpy polyethylene plant, which doubles its capacity of that plastic product. It also includes a 410,000 tpy ethylene glycol plant.

In January, Exxon Mobil Chemical and SABIC completed a $1 billion expansion of their joint venture Kemya petrochemical plant in Jubail.

The two projects are part of Exxon Mobil Chemical's $5 billion worldwide capital investment program.