OPEC heads of state to stress cooperation
Venezuela will be in the spotlight when the Organization of Petroleum Exporting Countries� heads of state meet in Caracas today. The agenda does not officially include the issues of high oil prices or production policies, but they may be discussed behind closed doors. Officially, the OPEC leaders will work on a medium and long-term strategy to guide the organization and will seek ways to increase cooperation and trade among OPEC member countries.
CARACAS�Venezuela will assert its importance to the Organization of Petroleum Exporting Countries when heads of state meet here today. The group's Second Summit of Sovereigns and Heads of State will be held Wednesday and Thursday.
When Venezuelan President Hugo Ch�z took office in February of 1999, he promised that his nation would abide by all OPEC decisions to strengthen weak oil prices.
In August, Ch�z also challenged United Nations sanctions by becoming the first foreign leader to make an official visit to Baghdad since the Gulf War.
"Venezuela has recovered its leadership in OPEC," said Venezuela's Deputy Foreign Minister Jorge Valero, who also heads the summit's presidential organizing commission.
Attending the summit will be Abdelaziz Bouteflika of Algeria, Abdurrahman Wahid of Indonesia, Mohammad Khatami of Iran, Shiekh Hamad Ben Hamed Al-Thani of Qatar, Crown Prince Abdullah Bin Abdulaziz Al Saud of Saudi Arabia, Shiekh Hamad Bin Mohammad Al Sharqui of the United Arab Emirates, Vice-President Taha Yassin Ramadan of Iraq, Revolutionary Council member Mustafa Al-Kharroubi of Libya, Oil Minister Saud Nasser Al-Sabah of Kuwait, and Ch�z of Venezuela.
Officially, the summit agenda does not include the issues of high oil prices or production policies�but they may be discussed behind closed doors.
The OPEC leaders will work on a new medium and long-term strategy to guide the organization and will seek ways to increase cooperation and trade among OPEC member countries.
Venezuela's Energy and Mines Minister Al�odr�ez Araque, who is also OPEC's conference president, said the agenda may include an analysis of OPEC's history, environmental matters, oil industry mergers, cooperation between national oil companies, the establishment of a bank and a company to provide international oil industry services, and creation of an OPEC university.
Speaking before the summit opened, Ch�z said consumers must pay producers "a fair price" for oil. He said, "During almost a century, they have shipped from here millions of barrels of oil at a give-away price. That is part of the problem, and they have grown accustomed to the bad habit."
Ch�z said current "prices are not high, but fair." He added, "The price range of $22-28 was established by us, for now, which are fair prices. But that we also will have to keep adjusting."
On his arrival in Caracas, OPEC Sec. Gen. Rilwanu Lukman said the US and other industrialized nations should be careful in their use of strategic oil reserves to reduce prices.
He expressed hope that OPEC's decision to pump an extra 800,000 b/d of oil beginning Oct. 1, along with President Bill Clinton's move to release 30 million bbl from the US Strategic Petroleum Reserve, would shave a few dollars off current price.
But he said strategic reserves should be used in "real emergencies" rather than simply to pressure prices downward.
"It is not our business to interfere with what industrialized countries do with their reserves, but I don't know whether the current situation could be regarded as an emergency. It is not quite an appropriate use for it. We are not going to be pushed into putting more oil into the market that it needs," said Lukman, who added OPEC favors a price of about $25/bbl.
"People forget that prices have come up from just $10/bbl 2 years ago. No one felt sorry for OPEC then," he said.
Rodriguez said, "The increase of 1 million b/d from the US reserve, along with the extra OPEC supply on the market beginning Oct. 1, will reduce speculation, and we think that is positive."
He said the world needs a stable oil price in the $22-28/bbl range. He said producing nations would be willing to talk with the European Union and major world nations about the international oil market.