What is OPEC’s role in today’s world, particularly in maintaining economic stability, harmony and growth for your own member countries and the rest of the world?


OPEC’s role remains the same as when we started in 1960. That is, to provide a reliable supply of oil to the market, to try and have a stable oil market whilst protecting the interest of its members, and also to try and have an adequate return on investment for major oil companies. So that was that when we met in Baghdad in 1960 and today, it’s still the same.

Do you think OPEC’s role has changed or evolved?

Our objective is the same. Our objectives in 2007 are still the same as in 1960. However, we are facing a lot of challenges as far as the environment is concerned and as far as skilled manpower is concerned. So we are working together to overcome these problems. We are working on projects back home, in our member countries, to reduce effects of climate change and we are also meeting players in the international arena, like the United Nations and the EU [European Union] on the issue of environment. This is yet another example of how the organization is evolving.

How is OPEC is positioned today?

Well, we are now 13 members with Ecuador, which has recently renewed its membership. Over the last 50 years we have been through a lot of difficulties including times that we experienced conflicts between ourselves. But we have survived and stayed together and as a result are much stronger.

You’ve spoken about increased harmony at a public level, with political discussions at OPEC being conducted in private in order to present a unified front. How strong is internal accord at OPEC?

We used to have problems directly related to various political situations. Today that no longer exists. This is very important. Now, the ministers only have one subject — a fair, stable oil market.

Interesting political events are taking place in Ecuador. Do you think they will have any impact on the internal accord within OPEC?

Well, all our members are equal. Ecuador produces 500,000 barrels per day but they are equal in terms of rights and responsibilities, regardless of what they produce.

So the Ecuador accession is definitely taking place?

Well, they are contacting us at the moment and they want to join so we are talking together. It’s a process in dialogue.

The other important step was the recent joining of Angola. You were there in August. How did your discussions go?

I went to Angola and we were very well received. They understand that we were going there to discuss their future production allowance. They know that they will have to adhere to procedures and one of them is related to their production.

Why do you think these countries want to join OPEC?

I think OPEC is good in protecting its members’ interests. You have 13 member countries, of which some are from medium and some small producing countries. The Organization gives them the chance to talk together so as to protect the interest of the respective country.

They are always trying to protect the country. Angola is now 100% fully fledged member and as a matter of fact in 2008 they will be the vice president and in 2009 they will be the president. It goes in alphabetical order. They have of course been with us for a long time as observers.

Do you think there is room for much more expansion or do you think OPEC is at an optimum size?

I don’t knock on the doors of any country to join us! If they can see that they have the same objectives as OPEC then they are welcome!

IEA has forecast that OPEC will be responsible for almost 50% of global oil production by 2030. What role do you see for OPEC in the next 15 to 20 years?

Well, we have the reserves (indeed a good percentage of the world’s reserve) and we are investing in new capacity. We are currently investing more than [US] $150 billion until 2012 which will see our production capacity increased by 5 million barrels a day. As we go to 2020 we will be increasing investment from $230 billion to $500 billion. This will increase our production capacity by 9 million barrels a day.

We would like to have excess capacity on standby, just in case any interruption happens in the world we would have that. Although I call on the market to not see that excess capacity as stock but as a safeguard against any disruptions.

Where are the bulk of these investments happening?

Everywhere. Saudi Arabia, UAE, Libya, Angola, Algeria, et cetera — everywhere.

With soaring oil prices, exploration and production has become more expensive than ever before.

Yes, and also the dollar is a factor.

We are selling our oil in dollars. If we buy our material from the States we are not affected but as it is, most of the countries are selling in dollars and buying in Europe.

Many of your members are rich in natural gas reserves. Do you think OPEC could adopt a similar role with natural gas as it has with oil?

Well for now it is oil and if member countries want to add another product then it is up to them, it is not an OPEC decision.

How do you work between the needs of individual countries and those of OPEC and where you see the need for resources to be invested?

It is ultimately their decision. But as an organization, we advise them on our forecasts for world oil demand. This is currently 86 million barrels a day and in 2030 it will rise to 118 million barrels a day.

As you can see this is a tremendous amount. Obviously the respective members need to invest. Many have old oil fields and of course they need to discover new oil.

How has your recent visit to China served to promote OPEC’s international image? What do you think this image needs to be and how does the China visit fit into that?

Well of course it is a very big and important to us. We want to tell the world that we care, that we are helping and that we want to see a stable oil market. We also want to point out that OPEC member countries are investing heavily in new production. Also, despite what many may think, current high oil prices are not a bonanza for us. Fifty percent of what the consumer pays for oil is in taxes.

US Energy Secretary Samuel Bodman and some other observers contend that geopolitical issues and investment market speculation are not the root causes of high prices, but that it is about supply. What is OPEC’s response?

I do not agree. I really do not. At this time we do have adequate stocks. For the OECD the stocks are actually above the average. Also if we produce more, there is not enough global refining capacity to refine our oil. The US in particular must face this problem. They have not invested in new refinery capacity in the last 30 years and their operation rates are too low.