Doha (Platts)--9Mar2009

OPEC secretary general Abdalla el-Badri said Monday that oil prices
currently around $40/barrel were not suitable because they would not guarantee
investment in future capacity beyond 2013.

Badri, speaking to reporters on the sidelines of a gas conference in the
Qatari capital Doha, also said that the producers' group would study all
options when ministers meet in Vienna on March 15 though he declined to say
whether a further production cut was being considered.

He said compliance with a 4.2 million b/d output reduction agreed in
Algeria on December 17 was at 85% although he would like to see stricter
compliance in order to prevent a further slide in oil markets faced with high
consumer stocks and 80 million barrels of floating storage.

"This price [$40/b] is not suitable for any future investments," Badri
said, referring to what he said was the International Energy Agency's
preferred price level.

"This will threaten any investment in future capacity. Some projects are
delayed or scrapped. After 2013, we will have a problem."

He said the December 17 output cut adopted in the Algerian city of Oran
on "was a good decision."

"All members are complying with this agreement, which is currently at
around 85%. We would like to see higher compliance."

Asked whether a further cut was being considered, Badri replied: "All
options are open when ministers meet in Vienna. We cannot say now. But the 4.2
million b/d decision was a good decision and prevented a further slide in oil
prices. There are high stocks and floating stocks is at around 80 million
barrels."

OPEC "will try to return the market to balance and restore prices to
levels acceptable for future investment," Badri said.
--Geoff King, geoff_king@platts.com