Norway to increase oil production in cooperation with OPEC 11.31 a.m. ET (1642 GMT) March 30, 2000 By Doug Mellgren, Associated Press

OSLO, Norway (AP)  Norway will increase its oil production to help control prices that soared after it and other oil producing nations reduced supplies, the Oil Ministry said today.

Norway, the world's second largest oil exporter, will raise production by 100,000 barrels per day. The decision came after the Organization of Petroleum Exporting Countries promised earlier this week to increase its production by about 7 percent, or 1.7 million barrels a day.

Even though Norway is not an OPEC member, it joined the group's efforts to counter a world oil glut by restricting supply. That resulted in oil prices that nearly tripled in just over one year, which stung major importers like the United States.

Norway had cut its supply by 200,000 barrels per day.

Norway's announcement came a day after Mexico disclosed plans to boost its exports by 150,000 barrels a day starting Saturday in tandem with OPEC.

Mexico had cut its exports by 325,000 barrels a day as a result of the agreements in 1998 and 1999 that reduced global oil supply to boost prices, which had fallen to 12-year lows.

Norway had been producing about 3 million barrels per day during its voluntary curbs and will increase its production rate by about 3.3 percent in the second quarter of 2000.

"Today's oil prices represent a tighter market with lower oil reserves,'' an Oil Ministry statement said.

Norway had restricted its output by 200,000 barrels a day and will now restrict it only by half that.

The statement said Norway believes the increase will contribute to a more stable oil market, and is based on the production levels already indicated by other oil exporting countries.

The Oil Ministry said Norway decided to increase production even though demand usually declines during the summer months in the northern hemisphere. It said it will review its production levels at the end of the second quarter. OPEC also plans a review then.

The Norwegian government reached its decision after discussions in the Cabinet and a meeting with the Norwegian Parliament's foreign affairs committee today.

U.S. Energy Secretary Bill Richardson visited Norway three times in the past two months to urge its small ally in the NATO alliance to increase production. The high price of oil has caused the price of gasoline and other fuels to soar in the United States.

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-- Martin Thompson (mthom1927@aol.com), March 30, 2000