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Saturday, November 15, 2008

Oil output talks ongoing with non-OPEC states: Iran

TEHRAN (Reuters) - Iran's OPEC governor said on Saturday talks were underway on cooperation between OPEC and producers outside the cartel to reduce oil output, following tumbling crude prices in recent months.

"Now there are negotiations that non-OPEC countries cooperate with OPEC to lower output to some extent because if they don't ... or if they increase output, they have neutralized OPEC's action," Mohammad Ali Khatibi said in an interview broadcast live on Iranian state television.

OPEC countries are calling for action to halt oil's slide as they face reduced revenues and a struggle to finance domestic projects. Oil prices have tumbled more than 60 percent from a record level of $147 per barrel in July.

"Considering that non-OPEC countries have an output of around 50 million barrels per day ... they will have to cooperate for market stability," Khatibi said.

"We believe they will also incur losses from the drop in oil prices. Therefore it is necessary that they will also cooperate and lower their output," he said.

Khatibi said OPEC Secretary General Abdullah al-Badri recently discussed cooperation with officials in Russia, which is not a member of the OrganisatiOrganizationon of the Petroleum Exporting Countries.

"We are hoping these negotiations will soon result in fruition so that they (Russia) would expand their cooperation with OPEC," Khatibi said.

OPEC members agreed in October to reduce supplies by 1.5 million barrels per day, or about 5 percent, from November 1 but that measure has failed to stop oil prices declining.

Iran, seen as a price hawk, has previously said OPEC could take action if oil prices fell more and an Iranian oil official said on Thursday that its members would meet in Cairo on November 29 for "consultation" on the oil market.

On Friday, U.S. crude fell $1.20 at $57.04.

Khatibi said that, according to his information, non-OPEC members would attend a meeting of the organization in Algeria in December. "But I'm not sure they will be taking part in the Cairo meeting," he said.

(Reporting by Zahra Hosseinian and Hashem Kalantari; writing by Fredrik Dahl; editing by Patrick Graham)

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