KUWAIT CITY, 7 March 2006 — Saudi Arabia and Kuwait called yesterday for OPEC to maintain its current production ceiling when the cartel meets this week in order to cool off high prices.

Oil ministers from the Organization of the Petroleum Exporting Countries, which pumps about 40 percent of the world’s oil, meanwhile started arriving at the cartel’s Vienna headquarters ahead of its meeting tomorrow.

Before leaving for Vienna, Kuwaiti Energy Minister Sheikh Ahmad Fahd Al-Sabah told reporters here: “I believe because of the ... (high) price, we have to maintain our production. I believe that still the prices are high. For that we have to help prices to be more stable.”

In an interview to an Arabic newspaper yesterday, Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali Al-Naimi said Saudi Arabia does not want the organization to cut its output ceiling of 28.0 million barrels per day (bpd) in order to prevent upward price pressures.

“I personally think it would not be appropriate to say we should take the step of reducing production,” Al-Naimi said.

“That’s my position, but I want to listen and talk to counterparts in OPEC who are pushing for a reduction about whether it would be reasonable to send signals to the market that would push prices higher than they are now. This is harmful for us as producers,” the Saudi minister said.

Al-Naimi, whose country pumps some 9.5 million bpd and is the world’s top crude exporter, said that while “market factors are stable in terms of oil supplies,” prices were kept high by “fear of anything that (might) disrupt supplies” and instability in some producing countries.

Sheikh Ahmad said that the position of Kuwait, which produces around 2.5 million bpd, “is to maintain the production of OPEC to help the prices to be more stable.”

The Kuwaiti minister had suggested last month that the market may be oversupplied and that an OPEC cut may be considered.

Analysts expect OPEC to maintain its current production, despite some disagreement among member nations, owing to stubbornly high oil prices of more than $60 per barrel and simmering international tensions over Iran and Nigeria.

The threat of UN sanctions against Iran, OPEC’s second-biggest member, is likely to dominate output talks amid an ongoing nuclear crisis. The market fears that Iran, the world’s fourth-biggest crude producer, might slash its oil exports if it comes under UN sanctions over its nuclear program.

Another factor for OPEC to consider will be the unrest in Nigeria, where militants have forced a 20-percent cut to the country’s production and have threatened more strikes on energy installations in the Niger Delta.

Al-Naimi said that prices were being kept at high levels by “instability and the fact that political conditions in the producers’ regions affect the market — be it Nigeria, Venezuela, Iran, Iraq or the (Feb. 24) attempted (attack on the oil processing complex by suspected Al-Qaeda militants) in Saudi Arabia.”

Still, Venezuela has asked for OPEC to cut production by between 500,000 and one million bpd, Energy Minister Rafael Ramirez was quoted as saying. OPEC’s next official output meeting is scheduled for June in Venezuela, but cartel president Edmund Daukoru, the Nigerian oil minister, said on arriving to Vienna yesterday that the organization may also hold an informal meeting at a gathering of oil producers and consumers in Qatar in April.

Kuwait’s Gas Discovery

Kuwait also announced yesterday for the first time ever the discovery of huge natural gas reserves, as well as the finding of significant light crude oil fields in the northern part of the emirate.

“We can say now that Kuwait has entered the world of natural gas,” Kuwaiti Energy Minister Sheikh Ahmad told reporters.

He said the gas was “free” meaning it was not associated with crude oil and that reserves at the fields christened Um Niga-1 and Sabriya were estimated at 35 trillion cubic feet (one trillion cubic meters).

Sheikh Ahmad also said that the Kuwait Oil Company, which is the production arm of state-owned Kuwait Petroleum Corp., has discovered 10 to 13 billion barrels of light crude reserves in the same area.