The Relationship between OPEC and other International Organizations

Speech by OPEC Secretary General, HE Abdalla S. El-Badri, to the International Energy Symposium, on the occasion of OPEC’s 50th Anniversary - Riyadh, Kingdom of Saudi Arabia, 18-20 October 2010

Excellencies, ladies and gentlemen,

Good morning.

I would like to begin by expressing my appreciation to His Excellency Ali I. Al-Naimi, Minister of Petroleum & Mineral Resources of the Kingdom of Saudi Arabia, for the invitation to speak at this International Energy Symposium, and my sincere thanks to the Chair of this session, His Royal Highness Prince Abdulaziz Bin Salman Al-Saud. It is a great honour for me to participate in this event; one that marks the happy occasion of the 50th Anniversary of the Organization of the Petroleum Exporting Countries.

Fifty years ago, when OPEC was set up in Baghdad, there were some who predicted that the Organization would not last long. Fifty years on, however, that initial small group of developing oil producing countries has evolved into a group of twelve. These come from across the world and have brought more strength and diversity to the Organization.

It has certainly not been an easy task to advance the Organization's standing and influence, particularly given the nature of the oil industry at the time of its establishment. As I am sure you are all aware, the main catalyst for its birth came in 1959, when a group of international oil companies - the Seven Sisters - unilaterally reduced the posted prices of the crude they supplied.

At that time, these international companies were the dominant force in the oil market, playing the major roles and deriving the greatest benefits from all segments of the business, from exploration to final distribution. They controlled the quantity of oil extracted and sold, to whom it was sold, and at what price. And decisions were made without ever consulting host Governments of oil-producing countries.

So in 1960, five oil-producing developing countries - Iran, Iraq, Kuwait, the Kingdom of Saudi Arabia and Venezuela - came together around the premise of cooperation. They have since been joined by Qatar, Libya, United Arab Emirates, Algeria, Nigeria, Ecuador and Angola.

The founding of OPEC was a commitment based upon the need to safeguard their legitimate national interests and to ensure order and stability in the international oil market. It was about gaining the full sovereignty over their exhaustible non-renewable natural resources.

Over the years, this cooperation has grown stronger as the Organization has evolved and become an established and respected member of the global energy community. In the years ahead, OPEC's dedication to the welfare of its Member Countries, the international energy market and the global economy will of course continue.

This very brief history underlines the importance OPEC attaches to cooperation and dialogue. It was an essential part of its founding, has been fundamental to its evolution, and will be a key element in the Organization's future.

Of course, the issue of cooperation is central to the main topic I have been asked to talk about today: 'The Relationship between OPEC and other International Organizations'.

OPEC has long recognized the importance of adopting a plurilateral approach to addressing major topical issues, involving dialogue and cooperation with other international organizations and interested parties. This applies to both direct oil industry matters, as well as related areas, such as environmental protection and sustainable development.

At first, however, OPEC found it difficult, if not impossible, to establish dialogue and start cooperation outside of OPEC circles. This is due mainly to the hostile environment that prevailed when OPEC was born.

Gradually this changed. And there was a coming together and an understanding that in many respects our interests, particularly in regard to market stability, were, if not identical, at least similar. We have come a long way, from the early confrontation to the cooperation we see today.

Today, the importance of dialogue between international organizations, particularly in terms of bringing together producers and consumers, has never been greater. The reason is that globalization, international trade and mass communication are bringing us all closer together. We live in an increasingly interdependent world. This fact was clearly evident during the global financial and economic crisis. The knock-on impacts have been felt in almost all industries and in all countries across the world.

And, with energy central to each and every one of us, it is critical that all stakeholders work together for market stability. This is vital for the effective and efficient functioning of the global energy market.

In the global oil market, while demand for oil is clearly set to grow in the coming years, a number of factors that could have both medium- and long-term impacts on supply exist. This includes the policies of a number of consuming countries that offer an unclear picture of their impact on future oil consumption levels and overall energy demand. There is a need to provide clearer policies that are reliable, predictable and not discriminatory. Market stability is essential for both producers and consumers.

In addition, there is the need for a better understanding of such matters as the effects of excessive market volatility, the role of speculation, the future requirements for human resources as well as the impact of climate change and of mitigation policies and measures.

We should also never forget that it is a world in which energy poverty continues to blight the lives of billions of people. It is an issue that needs the urgent and critical attention of world leaders.

To help meet some of these challenges and uncertainties facing the global oil market, and the world, in general, we at OPEC believe in continually looking to explore and evolve our dialogue and cooperation with other international organizations. We recognize the value of strong and mutually-beneficial relationships.

In this regard, OPEC continues to maintain a strong and positive relationship with the European Union (EU). In the latest EU-OPEC Ministerial Dialogue that took place in June this year, the two organizations highlighted a number of relevant and topical areas where cooperation could be furthered. This included the need to continue to analyze and discuss the root causes of the recent financial crisis and economic recession; to organize roundtables on the challenges facing offshore oil and gas exploration and production activities and the causes of the skilled workforce shortage in the energy and oil industry; and to develop a study to explore the potential of technological advances in transportation.

OPEC and the EU also remain in discussions about enhancing cooperation through the development of an OPEC-EU Technology Centre, with energy technologies identified as one of the most important areas for cooperation.

Cooperation between OPEC and the IEA goes back many years and has advanced considerably. In recent years, a number of joint workshops on a variety of topical issues have been held and both Mr. Tanaka and I have made visits to the headquarters of our respective organizations. OPEC sees the dialogue between the two as an important element in improving the understanding of the concerns of all parties for oil market stability and predictability.

OPEC has also been proud to have played an active part in the formation of the International Energy Forum, whose Secretariat is now located here in the Kingdom of Saudi Arabia. It was founded as a platform that helps informal dialogue between producers and consumers and OPEC continues to support the IEF in providing this function.

This can be seen in the Organization's active participation in the IEF's Joint Oil Data Initiative, set up to enhance the transparency, quality, timeliness and flows of oil market data. We remain committed to furthering this project.

The Cancun Declaration, which was a result of the initiative begun by Saudi Arabia when it held an ad-hoc energy meeting in June 2008, maps out a path for a strengthened IEF, specifically through the development of an IEF Charter. Furthermore, it outlines specific areas of cooperation between the IEF, the International Energy Agency (IEA) and OPEC. This covers present and future market trends; the functioning and regulation of energy markets; and data.

The Organization and its Member Countries have also been, and continue to be, actively involved with many United Nations Organizations. This includes the United Nations Commission on Sustainable Development and, of course, the long-standing negotiations within the framework of the United Nations Framework Convention on Climate Change and its Kyoto Protocol.

I think we all appreciate that the climate change negotiations can, at times, feel extremely complex and, on occasion, appear to be never-ending. However, OPEC recognizes the importance of being part of these negotiations and of working with all parties and organizations to develop solutions that safeguard the legitimate interests of all parties.

In this regard, I am sure all stakeholders agree that any future agreement should be balanced, fair and equitable. It needs to take into account the past, present and future; the fulfilling of current commitments and obligations; address the net emissions of all greenhouse gases; use all available cost effective abatement options and technologies, including cleaner fossil fuel technologies, such as carbon capture and storage; and remain focused on the priority of sustainable development, particularly in regard to those least able to help themselves.

Additionally, OPEC has furthered dialogue this past decade with countries such as China, Russia and a number of other non-OPEC producers, as well as with other international organizations, such as the World Bank, the International Monetary Fund, and the World Trade Organization.

We also hope to expand our dialogue with other international organizations, as well as countries, such as India and Brazil.

Excellencies, ladies and gentlemen,

In summing up, let me stress once again that OPEC, in its 50th Anniversary year, remains faithful to the cooperation and the commitments that were agreed in Baghdad 50 years ago; to ensure market stability, an efficient and regular supplies of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.

Thank you for your attention.

A golden year for OPEC in 2010

The Organization of the Petroleum Exporting Countries will celebrate its golden anniversary this year, with a series of cross-cultural activities stretching across four continents.

These will culminate in a major anniversary symposium in September that will see prominent OPEC officials – past and present – reflect on the Organization’s successes during its unique 50-year history.

The Austrian capital, Vienna — seat of OPEC’s Secretariat — will provide the location for an exhibition charting the Organization’s development over the past half century. Similar events will be staged in OPEC’s Member Countries in Africa, the Middle East and South America, with the accent on arts and culture. Special commemorative postage stamps have been designed to mark the anniversary in Austria and Member Countries.

Vienna will also witness the grand finale of an energy industry-related quiz that will test the skills of schoolchildren from Member Countries and beyond. At a more visual level, there will be a drawing competition for students from host nation Austria.

Numerous special publications and a redesigned Website will complete the year’s packed line-up, to provide deeper insights into OPEC and its Member Countries and into the many challenges they face in today’s high-tech, globalised, interdependent petroleum sector.

The celebrations are already underway, with the unveiling of the prizewinning design for the 50th anniversary logo on the Website on New Year’s Day.

OPEC was established by five oil-producing developing countries in Baghdad, Iraq, on 14 September 1960. It now has 12 Members committed to a stable oil market, fair and reasonable prices, secure supply and fair returns to investors, as well as supporting sustainable development and addressing global environmental concerns.

Venezuela victorious in historic OPEC quiz

Vienna, 30 June 2010--Luis de la Hoz, a 17 year-old student representing Venezuela, swept to victory in OPEC's first ever international quiz, held in the OPEC Secretariat today. The quiz forms part of the Organization's 50th anniversary celebrations.

Luis held off tough competition from nine other students, all under 18 years of age, to emerge victorious after a tricky three rounds of questioning about OPEC's history, its Member Countries and the international oil industry. Alongside Luis were students from eight other Member Countries, one each from Ecuador, IR Iran, Iraq, Kuwait, SP Libyan AJ, Nigeria, Qatar and Saudi Arabia, as well as a student from host country Austria.

The competition which was broadcast live on the OPEC Website was enjoyed by an audience that included Ambassadors, Austrian dignitaries, local press and other students from both Austria and overseas, who were treated to an impressive display of knowledge from all contestants.

"I feel very proud of representing my country," said Luis, who hails from western Venezuela and hopes to be a systems engineer when he finishes studying. "It's been a huge experience for me. I studied a lot for this, but my teachers and family and friends helped me a lot. My mother was very proud - she cried when I won."

Kehinde Olatunde, 16, from Nigeria took second place and Jose Andres Yanchapaxi, 18, from Ecuador took third, but all contestants - many of whom were visiting Europe for the first time - were winners in their own right; all had won qualifying rounds in quiz-related competitions in their own countries.

Today's event was the culminationof a fun and culture-filled two days for the contestants. After being welcomed to Vienna on Monday by OPEC officials, they were given a guided tour of Vienna and were received in the city's majestic town hall or Rathaus. After the quiz, contestants were awarded prizes, souvenirs and certificates by the OPEC Secretary General, Abdalla Salem El-Badri, and were treated to a rousing performance by the VORLAUT children's choir, a joint project of the OPEC Fund for International Development and the Vienna Konzerthaus, Caritas Vienna and the Vienna Boys' Choir. The project aims at supporting children from marginalized groups in Vienna by integrating them into musical activities to enhance their overall capabilities.

The quiz is just one of many activities being held this year to mark OPEC's Golden Jubilee. Other activities include exhibitions, soccer matches, anniversary stamps and a range of special publications.

OPEC, IEA, OECD, World Bank submit joint report to the G-20 Summit

Vienna, 2 July 2010--OPEC, along with the World Bank, the OECD and the IEA was requested by the G-20 leaders when they met in Pittsburgh, in September 2009, to provide an analysis of the scope of energy subsidies and offer suggestions for the implementation of the G-20 initiative. This was aimed at rationalising and phasing out, over the medium term, "inefficient fossil fuel subsidies that encourage wasteful consumption".

After much debate and hard work, the four International Organizations have succeeded in addressing the broader developmental context in which energy subsidies are embedded and in this , present, wherever possible, preliminary quantitative estimates of energy subsidies.

Qatar congratulates OPEC on 50th Anniversary

Vienna, 20 August 2010--The Organization of the Petroleum Exporting Countries (OPEC) has been commended for its work over the past 50 years in helping to bring stability to the oil markets, and for its ability to adapt to "new technologies and shifting market conditions [which] have transformed the oil industry."

The commendation came from the Deputy Premier and Minister of Energy and Industry of Qatar, HE Abdullah bin Hamad Al Attiyah, in a two-page letter addressed to OPEC's Secretary General, HE Abdalla Salem El-Badri.

In his message, Al Attiyah congratulated OPEC's Member Countries for the role they have played, individually and collectively, in achieving success for the Organization. "[They] have developed trusting and open relationships based on mutual respect and common interests," attributes which, according to him, are key reasons for OPEC's longevity and success.

Al Attiyah, who is currently OPEC's longest serving Head of Delegation, also drew attention to OPEC's contribution to poverty alleviation and development in poorer nations through the OPEC Fund for International Development (OFID).

OFID is the direct outcome of the First Summit of OPEC Heads of State in 1975. Since it was formally established in 1976, "[OFID] has provided development assistance to around 125 countries and has played a significant role in the global fight against poverty," Al Attiyah noted.

Founded in September 1960 in Baghdad, Iraq, OPEC consists of twelve Member Countries, namely Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

Opening message to the special 50th Anniversary issue of the OPEC Bulletin

by OPEC Secretary General, HE Abdalla Salem El-Badri

The Fourteenth of September 2010 is a very special day for OPEC. This sees the Organization celebrate its 50th anniversary.

Few would have believed half a century ago that the Organization would have risen to the heights it has today in the global energy arena. This is because OPEC's birth in Baghdad was a low-key event involving just its five Founder Members in a very different world to that of today.

The oil industry was dominated by the major oil companies and this was reflected in its structure and its behaviour. The industry's prime purpose in the previous 15 years had been to fuel the post-Second World War reconstruction of the developed countries in the then-colonial world with all its inherent injustices - and then to maintain the momentum of this unjust situation without due regard to the interests of the poor developing countries from which most of the essential crude oil was coming.

In the context of that time, it was therefore a heroic act by the Founder Members to come together in the Iraqi capital 50 years ago and decide that enough was enough. They could no longer allow the lifeblood of their economies to be drained.

At first, in the 1960s, little was heard about OPEC, as its Membership grew and it engaged in endless rounds of discussions with the dominant international oil companies, in order to acquire a greater say in how their indigenous oil resources were exploited and hence their national destinies mapped out.

At the time that this was happening, fundamental changes were occurring across the world, and, in the context of OPEC's evolution, many developing countries were acquiring independence.

And so the time was ripe for OPEC and its Member Countries to take some profound steps in asserting their sovereign rights to the exploitation of their indigenous natural resources, in the interests of their domestic economic and social development and for the benefit of their peoples. In the early 1970s, this saw a wave of oil industry nationalizations, as well as these countries gaining a major say in the pricing of their crude oil on world markets.

Since then, OPEC and its Member Countries have gone from strength to strength.

While OPEC has focused much of its attention on the welfare, development and growth of the oil industry itself - together with its commitment to secure, steady supply with reasonable prices to consumers and fair returns to investors - it has also broadened out the scope of its activities to the energy sector at large and, indeed, much further afield than that. Here, I refer to its championing of issues affecting mankind as a whole, most notably sustainable development, the eradication of energy poverty and care for the environment.

In 50 years, OPEC has become a notable player on the world stage. This has not just been because of the contributions of its Member Countries to international oil supply. But it has also been due to OPEC's progress and achievements being envisaged as a beacon of hope to other developing countries. In short, OPEC has shown that it is possible for well-intentioned, but heavily exploited developing countries to stand up for themselves, develop their economies, defend their sovereign interests and make a significant contribution to the global community in a constructive and meaningful way.

Of course, the world today is a much more integrated, interconnected and interdependent globalized arena than it was 50 years ago.

But OPEC's establishment, growth, assertiveness and expanding outreach have served a purpose in demonstrating to other developing countries just what can be achieved through perseverance and steadfastness, when the cause is a just one.

Therefore, as OPEC celebrates its 50th anniversary, it does so with a feeling of achievement and satisfaction, together with the firm intention of remaining true to its principles well into the future, to the benefit of its own Member Countries' national development, international oil supply, world economic growth, poverty eradication and the global community at large.

Finally, no occasion like this would be complete without a full appreciation of the efforts of all those who have worked so hard over the past 50 years to make OPEC the success it has become. These include generations of Heads of State and Government, Ministers, Governors and other high-level experts from outside the Secretariat and, from within the Secretariat, Secretary Generals, Management and Staff of every relevant discipline, enriched by their broad multicultural spread. Inherent qualities have included courage, vision, enterprise, ambition, commitment, perseverance and sacrifice, to cope with the many ups and downs experienced by the Organization and its Member Countries, as these much-valued individuals have sought, day in, day out, to pursue OPEC's noble objectives.

I am sure that I am speaking on behalf of all my distinguished predecessors as Secretary General when I express a profound and heartfelt "thank you" to all those who have contributed to OPEC's success during this time and have utilized all these qualities to the full in the interests of the growth and development of the Organization.

This gratitude extends to the Republic of Austria and the City of Vienna, which have been warm and generous hosts to the Secretariat since we moved to this grand, historic city in 1965. Our new purpose-built premises provide the ideal base from which to meet the many challenges we shall face as we enter our second 50 years in a confident and determined manner.

OPEC daily basket price stood at $74.28 a barrel Thursday, 23 September 2010

Vienna, 24 Sep. 2010--The price of OPEC basket of twelve crudes stood at 74.28 dollars a barrel on Thursday, compared with $74.41 the previous day, according to OPEC Secretariat calculations. (View Archives).

The new OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).