OPEC locked in talks over new head

OPEC ministers were locked in talks here Wednesday over choosing a new secretary-general, as the cartel looked set to maintain its oil output ceiling ahead of an expected drop in demand for its oil next year.

While the Organization of Petroleum Exporting Countries was widely expected to announce no change to its output ceiling at 30 million barrels per day (mbpd), it was divided over who should become the group's new administrative head.

The world's biggest oil exporter Saudi Arabia was battling against Iraq and political foe Iran to succeed Libya's Abdullah El-Badri, who has steered the cartel through the financial crisis as its secretary-general since 2007.

"It's incredibly important to this organisation (to reach a decision) because the secretary-general sets the tone and leads the organisation as we go forward," Nigerian Petroleum Minister Diezani Alison-Madueke told reporters on Wednesday.

"Let's hope that today we're able to come to a conclusion on that," she added.

A vote to pick El-Badri's successor was postponed in June after OPEC -- which produces more than one third of the world's oil -- failed to reach a unanimous decision among its 12 member nations. Another delay could see him stay on beyond the maximum of two three-year terms, analysts said.

"Mr El-Badri has been a very, very good secretary-general," said Madueke, without precising who should take over.

Going head-to-head were Majed al-Moneef, a former Saudi governor to OPEC, ex-Iranian oil minister Gholam Hossein Nozari and former Iraq oil minister Thamir Ghadhban.

"I think Saudi Arabia" has a good chance of becoming the next secretary-general, Libya oil minister Abdelbari al-Arusi told reporters.

Arusi added that he expected OPEC to stick to "the same production level" at its ministerial meeting.

The oil ministers of Kuwait and Venezuela were not attending Wednesday's meeting because of political events in their countries, while it was not known if the absences would affect the outcome of the secretary-general vote.

Asked if OPEC would decide on a new secretary-general at the meeting in Vienna, home to the cartel's headquarters, Saudi Oil Minister Ali al-Naimi simply told reporters on Tuesday: "Maybe."

OPEC is producing about one million barrels above its official daily ceiling, as Saudi Arabia compensates for lost Iranian output caused by Western sanctions on the Islamic Republic, and as other member nations look to maximise profits while oil prices remain high.

Benchmark crude oil prices rose above $108 a barrel Wednesday on supply concerns after OPEC reported a drop in crude production last month, traders said.

However an expected drop in demand for OPEC oil next year risks dampening crude prices despite a background of Middle Eastern unrest, notably over Iran's disputed nuclear programme.

OPEC "is unlikely to agree to cut back production as long as oil prices remain relatively healthy," said Tamas Varga, analyst at PVM oil brokers.

"The assumption will be that the Saudis, and perhaps the Kuwaitis, will cut back very quickly if prices start falling."

OPEC on Tuesday kept its forecast for growth in world oil demand unchanged for this year and next. World oil demand was expected to reach 88.80 mbpd in 2012, up from 88.04 mbpd in 2011, the cartel said in its monthly report.

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