Existing OPEC cuts should balance market

VIENNA, Feb 26 (Reuters) OPEC's existing oil output curbs should bring the world market into balance, the group's new ecretary-General said today, less than three weeks before the exporter group meets to chart policy.

Abdullah al-Badri, who took on OPEC's top job in January, also told Reuters he expects the world economy to remain healthy for the next five to six years and downplayed the idea of a so-called gas OPEC.

OPEC oil ministers meet on March 15 to set output strategy and review compliance with deals to cut 1.2 million barrels per day (bpd) from November 1 and a further 500,000 bpd from February 1.

''Our percentage of compliance is satisfactory, even though there is room for improvement,'' Badri said at the Vienna headquarters of the Organization of the Petroleum Exporting Countries.

''If we applied the same percentage to the 500,000 bpd, then we are going to see a balanced market.'' His comments were made with U S crude oil trading at more than a barrel -- well above the 20-month low of 49.90 dollar hit in mid-January that had sparked concern from some in OPEC.

OPEC members including Nigeria, Algeria and Kuwait have said the group is likely to leave output unchanged next month. Asked if any members were suggesting further production cuts, Badri said there were not.

Compliance with the first supply cut was about 66 percent and an indication of adherence to the second round would come in March, he said.

''If we are able to improve the percentage of the cut, this will do the trick,'' he said when asked whether the existing curbs were sufficient.

The recent recovery in prices has brought OPEC's basket of crudes to .41, within the -60 a barrel zone that Badri said he personally favoured for the OPEC benchmark.

ECONOMY HEALTHY Badri, a former head of Libya's state National Oil Corp and of that country's OPEC delegation, also gave an upbeat outlook for world economic growth.

''I think it will move the same rate for the next five, six years -- the same rate as in 2007,'' he said. ''(In 2007) ... it is a little bit lower than last year, but it is moving very healthily.'' OPEC members pump more than a third of the world's oil. Iran's Supreme Leader Ayatollah Ali Khamenei in January said Iran and Russia could set up a gas exporting group like OPEC.

Badri, commenting on whether a so-called gas OPEC was feasible, played down the idea, saying gas was dominated by long-term contracts.

''It may happen in the distant future, but so far...the gas itself goes to the end-user and there is no market as such for gas,'' he said. ''It's a remote idea.'' The number of OPEC countries grew to 12 this year when Angola became a member in January. Iraq and Angola are exempt from OPEC's agreements to limit production.

Angola will be expected to moderate oil output in line with OPEC decisions on supply, but it is not clear how soon that will happen, Badri said.

''I don't know if this quota will be discussed in March or not,'' he said. ''But at the end of the day, this quota will be discussed and they will adhere to it.'' Other countries may further boost OPEC's ranks. Ecuador hopes to rejoin the group in the second quarter of this year, and Sudan is considering becoming a member.

Badri expects OPEC ministers to discuss Ecuador's application ''favourably if they receive an official request from the country itself'' and Sudan has not yet filed such a request.

Reuters SAM RN2358