L.A. oil producers glum as OPEC meeting turns out to be non-event.

Gloom deepened in Los Angeles County's oil patch last week.

Producers and thousands of Angelenos with stakes in oil wells had been hoping the depressed prices posted for crude produced in the county would be hiked last week. But neither L.A.-based Unocal Corp. nor San Francisco-based Chevron Corp., the primary trend setters here, changed their posted prices for crude produced in the county.

"The best we can hope for now is status quo, no change," lamented Thomas R. Hunt II, executive vice president of California Independent Petroleum Association, referring ominously to fallen futures prices last week on commodities exchanges.

The reason for the dashed hopes of higher posted prices and apprehension about even lower prices was the prior week's meeting in Geneva of the 13-member Organization of Petroleum Exporting Countries. The meeting of OPEC members' oil ministers was expected to result in an agreement to reduce production quotas to curb the crude glut on world markets that has depressed prices.

Indeed, futures prices for crude on commodity markets already had risen in anticipation that current OPEC production of 24.2 million barrels a day would be trimmed to 22.5 million barrels daily. But the acrimonious four-day meeting broke up with OPEC's production ceiling only lowered to about 23 million barrels daily.

Moreover, because OPEC members traditionally have cheated on their assigned quotas, some observers predicted OPEC production actually will aggregate 23.6 million barrels. That would mean excess OPEC production of 1.1 million barrels daily over the estimated demand of 22.5 million barrels daily, observers noted.

The stumbling block to lower quotas, they said, was Saudi Arabia, which has been producing more than a third of OPEC's crude since the Persian Gulf War against Iraq by United Nations forces led by the United States. To help bolster President George Bush's re-election campaign, observers contended, Saudi Arabia's King Fahd refused to cut his nation's crude production to below about 8 million barrels daily from 9 million currently.

However, OPEC's formula actually allocated 7.89 million barrels daily as the Saudis' share.

Local crude producers hope the Saudis will be more amenable to lower quotas to cut supplies and raise crude prices when OPEC meets again, CIPA's Hunt said. But the next meeting of OPEC oil ministers is not scheduled until April 24 in Vienna -- fully two months to wait for price relief.

Meanwhile, prices posted for crude produced in L.A. County have been at their lowest levels in more than 18 months. Unocal, for example, cut its posted prices for L.A. County crudes by half a buck a barrel across the board early last month.

That lopped them to the lowest levels since July 1990, less than a month before Iraq invaded Kuwait, and to 62 percent below the highs reached in October 1990 during the most fearsome days of Operation Desert Shield. The market looks for OPEC to play the policeman, but it's been a pretty weak policeman of late, CIPA's Hunt groused.

Unfortunately, he added, local crude producers now have more than OPEC quotas to worry about, for a proposal for a California severance tax has been resurrected again. Two similar proposals were defeated last year in the California Assembly's Revenue and Taxation Committee, Hunt recalled.

Spearheading this year's proposal is the California Tax Reform Association, said Hunt, who described the CTRA as a group backed by movie actors and other West Los Angeles ultraliberals who don't care about industry. If Proposition 13 gets overturned by the U.S. Supreme Court, Hunt fears, the CTRA appeal of a 75-percent property tax cut for homeowners well may garner enough (384,974) signatures to qualify the proposal for the November ballot.

The proposal would impose a 3-percent severance tax on any entity producing more than 30,000 barrels of oil a month in California, Hunt said. By hiking operating costs of local producers, he said, the tax would place local producers at a further competitive disadvantage against imports of crude from Alaska, other parts of the nation and abroad.

Thus, Hunt declared, "a severance tax in any form is unacceptable."

Fortunately, Hunt observed, the CTRA proposal presents California crude producers with a strategic opportunity to form a coalition against the initiative. Besides the severance tax, the initiative contains nine other distinct provisions -- such as hiking bank and corporation tax rates.

"We plan to work closely with other industry associations to vigorously oppose the initiative," he promised.