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All eyes upon OPEC - Nov 17

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OPEC experts call for expansion of oil supply to consumer countries

Kuwait News Agency (KUNA)
Experts on OPEC affairs called on Friday on member countries to expand supplies to consumer countries in a bid to maintain the group's share in the world oil market.

The call was made by experts participating in the second part of activities held on the sidelines of Third OPEC summit which is to commence in Riyadh on Saturday and run through Sunday.

At the second session Friday afternoon, under the theme "Future of Oil in the Global Energy Mix", the speakers agreed on the significance of investing production surplus in development of other resources of energy.

The experts include Prof. Mohammad Saleem Kelala of the Algerian Institute of Political Science, Abbas Ali al Mujrin, Department of Economic at Kuwait University, Dr. Salim Sumaisem, an Iraqi economic advisor , Ame Walther, Secretary General In Energy Forum Secretariat, and Gary Ross of PIRA Energy Group.

The economic experts pointed out the growing competition in the world oil market, noting that OPEC sustained a high cost in preparing a long-term strategy that highlight the prospects of future circumstances in prelude for appropriate development plans.

Also taking part in the seminar is Alan J. Kelly of the U.S. National Petroleum Council and Coordinating Subcommittee Chair of the seminar who noted that oil demand worldwide is expected to reach between 50 and 60 percent by the year 2030. He said that, in light of those forecasts, it was important to back up domestic energy diversity and to push for investment and free world trade.

He said oil energy production and refinery costs was dramatically growing and could reach high levels by 2030, underlining significance of continuous search for modern tools and development of present oil pumping techniques and refinery to maintain oil market stability.
(16 November 2007)


OPEC Communique Shouldn't Mention Dollar - Saudi Minister

Hassan Hafidh and Majdoline Hatoum, Dow Jones News Wires
Saudi Arabia Foreign Minister Prince Saud al-Faisal Friday advised ministers from the Organization of Petroleum Exporting Countries not to mention the dollar in their final communique, saying it could further weaken the already-battered currency.

In comments broadcast on a live television feed from a closed-session meeting of foreign, oil and finance ministers from OPEC countries, al-Faisal said: "We shouldn't mention the dollar because that would only endanger it more and aid its collapse."

Saudi security personnel later shut down the live feed when they realized journalists were watching what was supposed to be a closed and confidential meeting.
(16 November 2007)
Related: OPEC SUMMIT Blunder lets media eavesdrop on ministers' meeting (Thomson Financial).


Go with the flow? Opec examines the benefits of boosting capacity

Javier Blas, Financial Times
... In defiance of these conditions, the production capacity of Shaybah is being expanded from the current 500,000 barrels a day of high-quality oil to 750,000 b/d by the end of 2008 - one example of Opec's efforts to add new production capacity to satisfy an energy-hungry world economy.

Shaybah's expansion is part of an $80bn (£39bn, €55bn) programme to increase Saudi Arabia's oil production from the current 11.3m b/d to 12.5m b/d by 2009. That will allow the kingdom to respond better to unexpected jumps in demand.

Saudi Arabia is not alone in this drive. The oil producers' cartel has committed close to $120bn (£59bn, €82bn) in different expansion projects, according to Abdulla El-Badri, the group's secretary-general. Mr El-Badri says the projects will ultimately boost the organisation's collective production capacity by some 5m b/d to almost 40m b/d.

"The kingdom of Saudi Arabia has indeed made significant strides in increasing its production capacity in recent years while other Opec members are also diligently working to achieve our collective goals," he adds.

The development reinforces the message likely to emerge from this weekend's Opec summit, which will attempt to underline the reliability of supply and the cartel's concerns about the increased demand caused by continued strong growth in much of the world.
(15 November 2007)


OPEC Looks to the Future, Its Clients to the Present

Humberto Márquez, IPS
The Organisation of Petroleum Exporting Countries (OPEC) is not likely to give in to pressure from consumer nations to curb record high oil prices after this weekend’s meeting of OPEC heads of state and government in Riyadh.

The summit, the third in OPEC’s history, will focus on medium to long-term strategies for meeting world demand for oil, promoting prosperity and protecting the environment.

The OPEC ministerial conference slated for Dec. 5 in Abu Dhabi may also fail to decide on measures aimed at moderating prices, which are closing in on 100 dollars a barrel.

"The thing is, for now OPEC can increase prices, but it can't bring them down," Elie Habalián, a retired professor and former representative of Venezuela at OPEC, told IPS.

"OPEC shouldn't be blamed for the price of oil, it's out of our hands,'' said Qatari Oil Minister Abdullah al-Attiyah. ''It's speculators who are putting money in oil.''

OPEC argues that the market, which in 2007 has consumed just under 86 million barrels of oil a day, is well-supplied, and that in response to demand it increased output among its 12 members to 31 million barrels a day.
(16 November 2007)


OPEC to discuss creation of currency basket to price crude

Kuwait Times
Leaders of the Organization of Petroleum Exporting Countries meeting this weekend in the Saudi capital are likely to discuss the possibility of creating a currency basket to price their crude, Venezuela's oil minister said yesterday. Rafael Ramirez, the minister, said the issue will come up at a closed session in the two-day OPEC summit, Dow Jones Newswires reported.

The issue of the currency basket ... they will have an opportunity to discuss this in the closed session," Ramirez told reporters on the sidelines of the OPEC gathering.

A currency basket could be used as a way for the cartel to shield crude oil exports, which are priced in US dollars, from the dollar's decline against other major currencies. OPEC supplies about four out of every 10 barrels on world oil markets.
(17 November 2007)


High Oil Prices Confound OPEC

Jad Mouawad, New York Times
As oil prices hover around $95 a barrel, OPEC should be in a celebratory mood: its members are reaping record revenue, demand for their product keeps rising and the world economy seems capable of sustaining oil prices that would have seemed suicidal just a few years ago.

But the oil-producing group faces an increasingly uncertain environment. There are fears of a global economic slowdown, an endlessly depreciating dollar and growing concerns about the effect that burning fossil fuels has on the planet’s climate.

As leaders of the Organization of the Petroleum Exporting Countries meet in the capital of Saudi Arabia for a rare high-level summit this weekend, there are signs that high oil prices are a mixed blessing for producers.
(16 November 2007)


OPEC promises expensive oil
(Commentary)
Oleg Mityayev, RIA Novosti
On November 17-18, Saudi Arabia will play host to the third summit in the 47 long-year history of the omnipotent oil cartel - the Organization of the Petroleum Exporting Countries (OPEC).

On the eve of the summit, OPEC has been subjected to a massive attack led by oil consumers, who demand that it should immediately increase oil production. The price of oil may surpass the record of $100 per barrel any day, but it is already clear that the oil cartel is not going to make any concessions to oil buyers this weekend.

Moreover, on November 14, OPEC bluntly rejected an appeal by the United States, a major oil consumer, to increase oil production this week. In response to this request by U.S. Energy Secretary Samuel Bodman, OPEC Secretary General Abdullah Badri said that "we don't see that we should add more oil...."

He is absolutely right. Oil supplies fully meet the demand and the current soaring prices ($93-$95 per barrel) have been caused exclusively by speculative attitudes.

Without a doubt, more oil in the market would help its consumers to stock reserves and ease speculation. But OPEC has a bitter experience of sudden drops in oil prices (the last one occurred in 1998), and does not want to rush decisions to increase oil production. Also, its opportunities in this sphere are quite limited. Now that prices have reached a record level, almost all oil-rich countries are producing as much oil as possible. This applies to Russia and other countries that are not part of OPEC.
(16 November 2007)


Opec shifts its stance on climate change

Opec sought to reposition itself at the centre of the climate change debate on Thursday by pushing for a fund to finance research and development on emissions capture and sequestration technology as a means to clean up fossil fuels.

Opec’s approach is a significant departure from its previously sceptical attitude to the climate change de-bate, when it worried about the potential impact of alternative energies and energy savings on oil demand.

Ahead of a key United Nations climate conference next month, Ali Naimi, the Saudi oil minister, said yesterday that technology was the response to reduce emissions, as fossil fuels will continue to play a big role in the world’s energy mix.
(15 November 2007)


OPEC to Reject Oil Output Boost, Seek Carbon Cutback

Maher Chmaytelli and Fred Pals, Bloomberg
OPEC oil nations plan to reject U.S. calls to increase production as crude prices remain stuck above $90 a barrel, according to a draft of the group's statement to be released this weekend.

The group will instead reiterate a commitment to ensure energy supply and seek to reduce their carbon emissions released from pumping and refining oil and gas, according to the statement to be issued in Riyadh, which was seen by Bloomberg and confirmed by three officials from the group who spoke on the condition of anonymity.

Their intention to keep production at current levels signals consumers are unlikely to see relief from high oil prices, which reached a record $98.62 a barrel on Nov. 7 in New York. A pledge to reduce carbon dioxide threatens to force investors in OPEC nations such as Royal Dutch Shell Plc and Exxon Mobil Corp. to incur extra costs at their operations.
(15 November 2007)

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