As the Organisation of the Petroleum Exporting Countries discusses a production increase, as important as the actual volume of the hike is the level from which the increase would take place.

Opec, which controls 40 per cent of global oil production, is discussing a production hike of between 500,000 and 1.0m barrels a day. A 700,000 b/d rise has been suggested as a compromise.

A key question under debate is from which level the increase takes place. That is not an easy subject under Opec’s complicated system of production limits.

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When Ali Naimi, the Saudi Arabia oil minister, talks, the oil market moves. But Mr Naimi, the most influential Opec minister, has remained silent for the last five weeks and has said nothing so far in Vienna in the run-up to Tuesday’s Opec meeting.

The silence is raising eyebrows among the analysts and consultants that gather here in Vienna for the meeting. They are perplexed by the Saudi tactics and are agonising over their coffee at the ministers’ hotels in the Austrian capital looking for some new development to tell the oil traders in London and New York.

This morning, at Mr Naimi’s briefing – which involves journalists, including me, jogging with the minister at 7.30am – it was silence again. Not a single word on Opec’s policy.

Some analysts think Mr Naimi is waiting to surprise the market – and Opec colleagues – in a tactic used several times in the past.

Those who support this theory say that Saudi Arabia may push the oil cartel for an output increase to cool-down red hot oil prices. As most countries oppose the move, Saudi would be quietly trying to convince others on the need of the increase, the analysts said.

Others say that the Saudi silence is due to the desire of the kingdom to maintain a low profile in the Opec meeting as oil prices approach $80 a barrel.

These analysts argue that the last thing Mr Naimi wants, is to be seen in Washington, especially in the midst of the subprime crisis, as responsible for higher crude and petrol prices. Those who support this theory say that Saudi Arabia would not push for a production increase and, that in fact, the kingdom is satisfied with the current oil price and market.

PetroChina, the listed but state-controlled Chinese energy group, has signed a 15-year, $37bn deal to buy liquefied natural gas from Woodside Petroleum’s planned Browse project in Australia. The deal follows a similar 20-year contract signed a couple of days ago with Royal Dutch Shell for LNG from Chevron’s Gorgon project, also off Australia, in which Shell has a stake. (FT stories may require subscription)
In the past few years - since oil prices started to rise - the main action in China has been in coal; the country has been putting on coal-fired electricity generation capacity at a rate equivalent to a good-sized new power station every week.
The fact that China is now trying to tie up gas supplies, at prices apparently well above what it was prepared to pay in 2002, suggests it has caught on to the prevailing thinking in energy-importing countries in the West: above all it is diversity of supply that fosters security.
It is also evidence of what looks like a looming global shortage of LNG. With the delays hitting projects such as Gassi Touil in Algeria (where the government is kicking out Repsol, the operator), and demand growing at double-digit rates, it looks as though there is not going to be enough LNG to go round.

Hubris and nemesis department. On Tuesday, I sat in a hall at the Offshore Europe conference hearing Xavier Preel of Total waxing lyrical about the French oil major’s superior project execution and host country relationships; on Wednesday morning, his boss Christophe de Margerie was admitting that Total’s production growth projections have been over-optimistic.

As the FT story explains, it is not all Total’s own fault. Higher oil prices mean more oil goes to Total’s partners in production sharing contracts, which accounts for about half the cut in projected output. And a slowdown from 5 per cent to 4 per cent average annual volume growth during 2006-10 is hardly devastating: Total will still comfortably beat BP and Royal Dutch Shell over that period, and perhaps even ExxonMobil. (FT stories may require subscription.)

And yet, Total’s admission is an important piece of news. It is yet more evidence of the severity challenge facing the oil majors, and shows how difficult it is to buck the trend, however good you may think you are. It is also another reason why there will be a few barrels more missing from forecasts of oil supply out to the end of the decade, and another reason why - barring a global economic downturn - prices are likely to stay high.   

UPDATE: Total has some good documentation and a webcast presentation on its website.

At Offshore Europe in Aberdeen, the biggest oil and gas trade show outside the US, the dominent theme has been the struggle for international oil companies to find a role for themselves in a world where governments and national oil companies control the resources, and services companies very often control the skills and the technology.

Malcolm Brinded, Royal Dutch Shell’s executive director of exploration and production, and Robert Olsen, chairman of ExxonMobil International, came up with very similar answers: the IOCs need to offer the most advanced technology and the most sophisticatred skills, especially in project management, or they are dispensible. As Mr Brinded put it, the oil majors are not needed by resource-rich countries any more, so they have to make themselves wanted.

The most interesting take, though, came from Xavier Preel of Total, who talked about his company’s vision of "a new relationship with governments and national oil companies" based on "mutual understanding and respect". He made it very clear that that as far as Total was concerned, there was no argument over who had the upper hand in that relationship.

It is all a long way from John D Rockefeller. Still, in the case of the recent Shtokman deal with Gazprom, for example, it appears to work. (FT stories require subscription.)

If anyone needed a reminder of the way things are going, Algeria helpfully gave Repsol a slap in the face on Monday. And in remarks the FT reported back in June, its government has made very clear the way it believes the industry is going.

However, one of the crucial issues in Algeria’s decision on the Repsol gas project seems to have been the cost overruns and delays that have hit it. An IOC might have the silkiest diplomatic skills in the world, but if it cannot deliver projects on time and on budget and delivering the returns that its partner expected, it will be in trouble.

One interesting aspect of the Gaz de France / Suez deal, on which our Paris bureau chief Peggy Hollinger has been leading the world, is its effect on competition in European energy markets. For Electricite de France, in a French residential energy market newly opened up to competition, the deal creates a potentially threatening "dual fuel" competitor, with 10m GDF customers who could be sold Suez’s electricity.

The merger also points to a way forward for companies worried about the drive towards energy market liberalisation coming from the European Commission. GDF makes about two thirds of its profits from its transmission and distribution networks. If it loses control of the transmission business as a result of the EU’s drive for "unbundling" those networks, it will urgently need new sources of revenue. Other national champions, similarly threatened, may find GDF’s solution attractive.

As is so often the case, one deal seems likely to spur others.