UPI Energy Watch

OPEC cuts production.

As planned, leaders of the Organization of Petroleum Exporting Countries met in Vienna for an emergency meeting and agreed to cut their daily production by 1.5 million barrels.

Prior to the meeting it was reported that Saudi Arabia was pushing for a smaller cut, less than 1 million barrels, while Libya and Iran wanted to cut 2 million barrels per day, the Financial Times reported.

The decision comes on the heels of a significant decline in the price of oil, which is now trading around $63 per barrel.

Many OPEC members are currently producing more than their quota, so the cuts really could be more along the lines of 1.8 million barrels per day.

Despite the talks of cuts all week and even in spite of the actual cuts, oil prices are staying low on global economic concerns and worry over a recession.

"Oil prices have witnessed a dramatic collapse -- unprecedented in speed and magnitude," OPEC said in a statement, "which may put at jeopardy many existing oil projects and lead to the cancellation or delay of others, possibly resulting in a medium-term supply shortage."

The production cuts will take effect Nov. 1, and OPEC President Chakib Khelil said every member is being required to take part.

OPEC member nations produce about 40 percent of the world's oil.

Mexico reforms oil.

The Mexican Senate recently approved a legislative package to reform its state-owned oil company Petroleos Mexicanos, or Pemex.

Production from Pemex has been lagging, and the reform bill is expected to pick it back up.

The package reportedly won backing from all three of Mexico's main political parties in the Senate after initially facing criticism and even protests from some, the Winston-Salem Journal reported. Critics are still fearful the bill either will not do enough to stimulate production or it will lead to privatization. Mexico's oil industry was nationalized in 1938 and since has been seen as a source of national pride.

The bill hopes to boost new oil production by allowing more foreign and private investments, especially in deepwater drilling.

Vietnam expands work with China.

The Vietnam National Oil and Gas Group, PetroVietnam, announced it has signed an agreement with XinAo Group to form a joint venture that will focus on producing clean fuel, Nhan Dan Online reported.

The agreement was signed by Vietnam Prime Minister Nguyen Tan Dung and Chinese government officials during the Vietnamese leader's recent visit to China.

During the same visit, PetroVietnam signed an agreement with GoldStone International Group to set up a joint venture to build and operate a complex that will include a five-star hotel, offices and luxurious apartment buildings at the Oil and Gas Tower in Hanoi.

Earlier in the week PetroVietnam signed a third agreement with the Chinese National Offshore Oil Corp., pledging to expand and promote cooperation on a number of fronts, not just energy.

PetroVietnam will now work with the Chinese Merchants Group to build and operate the Sao Mai-Ben Dinh port in the southern province of Ba Ria-Vung Tau and an oil and gas services industrial zone in the Go Cong district in the southern Tien Giang province.

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Closing oil prices, Oct. 24, 3 p.m., London

Brent Crude oil: $63.56

West Texas Intermediate crude oil: $67.99

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(e-mail: energy@upi.com)