IN PARIS: SUCCESSFUL TALKS BUT NO DECISIONS

No major decisions flowed from the oil consumer/producer dialogue conducted July 1 and 2 in Paris.

None had been expected.

Yet overall, observers said, the talks were a success with all 23 countries invited by hosts France and Venezuela sending representatives. Plans are being made for a followup meeting in Norway within a year.

In addition, the International Energy Agency has suggested a future meeting of representatives from the IEA, Organization of Petroleum Exporting Countries, and other producing countries as well.

From the beginning, the U.S. was reluctant to attend the Paris meeting, although it sent an observer. Its position on future talks is not clear.

SPIRIT OF COOPERATION

Observers said the success of the Paris conference lies in part in the inviting powers' effort to keep the talks low key and informal.

French Foreign Minister Roland Dumas said with the new spirit of cooperation developed during the Persian Gulf crisis between producers and consumers, he wanted to provide a forum for "an exchange of views" on how a new relationship could be formed between the two groups.

While all speakers cited the need for oil market stabilization, they also agreed there is no substitute for market forces in determining oil prices.

Instead, pointed. out Venezuelan Energy Minister Celestino Armas, "Better flow of information on each country's views of its energy future would improve the market's transparency, reduce uncertainties that affect prices, and contribute to a better working of the market."

Conference participants agreed useful exchanges include information about the various governments' long term energy policies and how the policies will affect the place of oil in the energy mix, the state of companies' oil stocks and those of producing countries, and even, according to a high ranking French official, on long term investments of oil companies.

A report on the transparency and stability of the oil market, commissioned by French Finance and Economy Minister Pierre Beregovoy, pointed out the part played by the futures and forward markets in allocation of resources during the Persian Gulf crisis and noted the markets could play a larger role in market stabilization if imperfections were overcome.

The report said imperfections could be corrected by producers spurred by the profitability of new market segments.

Although the question of price fixing was basically skirted, it remained an undercurrent throughout the talks.

It was Algeria's Energy Minister Nourredine Ait Laoussine who brought up the subject during the meeting.

He said, "it is illusory to believe we can change things by refusing to talk about prices and production. In the long run, it would be a good thing for producers and consumers to agree on price target that would hover at $20-25/bbl."

France's 1991 budget is based on a $25/bbl price for oil. A high ranking French official said a useful tool to achieve market transparency would be a clearinghouse containing estimated oil prices governments use for their budgets. He suggested this might be done within IEA.

FUTURE MEETINGS

The conference ended with agreements for a followup meeting along the same line as the Paris talks, and IEA offered a technical followup to discuss in more detail the points raised in Paris.

Norway proposed the next meeting be held in Oslo, possibly in cooperation with Egypt.

IEA's technical meeting could be staged later this year, pending approval by its governing board, to discuss all aspects of the energy industry in order to assess the place of oil in the future world energy mix.

U.S. STANCE

Whether the U.S. has softened its position on this type of producer/consumer dialogue remains unclear.

The U.S. observer, Deputy Asst. Sec. of State Richard Hecklinger, would not say whether the informal dialogue softened the U.S. government's opposition to this form of oil relationship.

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