High hopes on OPEC summit in Caracas<\/p>\n
By Emilio Rappold<\/p>\n
CARACAS (DPA): \"They are all just a heap of Pinocchios,\" a
\nformer Venezuelan oil minister said of his OPEC colleagues.<\/p>\n
They had a tendency to set oil-production quotas at OPEC
\nmeetings on Sept. 27-28, then turn around and produce well above
\nthose levels. The resulting lower oil prices, together with the
\nworld's decreasing dependence on oil, combined to drive the
\nOrganization for Oil Exporting Countries (OPEC) into obscurity
\nafter the energy crises of the 1970s.<\/p>\n
However, shortly before last week's OPEC summit, the second in
\nthe cartel's 40-year history, surging world oil prices have put
\nOPEC once again in the world's spotlight, a position it hopes to
\ncement at its meeting Wednesday and Thursday in Venezuela's
\ncapital.<\/p>\n
Current price developments are expected to be discussed only
\non the fringes of this week's summit because the meeting is seen,
\ninstead, as an opportunity -- in the words of Venezuelan
\nPresident and \"summit father\" Hugo Chavez -- for this heap of
\nPinocchios to establish \"true unity and importance\".<\/p>\n
Chavez, a former putschist and left-leaning nationalist who
\nregularly campaigns against \"wild capitalism\", envisions OPEC
\nunity as transcending oil production and extending to relations
\nbetween OPEC members.<\/p>\n
At the summit, Chavez said he would like OPEC to take a stand
\n\"against embargoes of all kinds and against the one-sided mixing
\nin internal affairs of other countries\". However, he has also
\ncalled for OPEC to support the Palestinians.<\/p>\n
He also wants OPEC to begin discussions on alternative energy
\nsources.<\/p>\n
This week's summit will also present an opportunity for OPEC
\nto grow beyond its current 11 members. Brazil has announced that
\nit wants to join at the latest by 2010. It -- along with Russia,
\nMexico and Norway -- will attend the summit as observers, and
\nRussia is also expected to announce, possibly in Caracas, its
\nintentions to join soon, said summit organizer Jorge Valero,
\nVenezuela's deputy foreign minister.<\/p>\n
But Chavez's vision of an OPEC that remains politically
\npowerful through oil-price fluctuations might be more than
\nwishful thinking.<\/p>\n
Its share of world oil production has fallen from two-thirds
\nin the 1970s to 40 percent today, and conflicts between OPEC
\ncountries, like Iraq and Kuwait and Iraq and Iran, have received
\na lot of press.<\/p>\n
In addition, OPEC has to not only shake loose of its Pinocchio
\nimage but also of its \"bad boy\" stereotype left over from the
\n1970s, when it imposed embargoes and price increases -- some as
\nlarge as 70 percent and 130 percent -- aimed at Israel's Western
\nsupporters.<\/p>\n
OPEC has rejected the recent accusations, warnings and
\nprotests directed at it over rising oil prices. OPEC President
\nand Venezuelan Energy Minister Ali Rodriguez said recently that
\nit is the least responsible for price hikes that have driven oil
\nprices up from US$15 per barrel in mid-1999 to last week's 38
\ndollars a barrel.<\/p>\n
He said recent market speculation alone had increased the
\nprice by $8 per barrel. He also pointed his finger at high
\nnational taxes on petroleum, transportation and refinery
\nproblems.<\/p>\n
Rodriguez added, however, that OPEC couldn't rule out another
\nproduction increase of 500,000 barrels per day. That increase
\ncould be decided upon at OPEC's November meeting \"if the price
\ndoesn't sink within the wished-for range of $22 to $28 (per
\nbarrel) for at least 20 days in a row\", he said.<\/p>\n
He said OPEC wants to avoid a price war and that he was
\nconvinced that oil prices would drop in October, when an
\nadditional 800,000 barrels per day will hit the market as a
\nresult of OPEC's decision two weeks ago to increase its
\nproduction.<\/p>\n
However, the agenda for the nine heads of state at the summit
\n-- Iraq's Saddam Hussein and Libya's Muammar Qaddafi will not
\nattend on \"security grounds -- will not be current price
\ndevelopments, rather the laying of a cornerstone for \"long-term
\nstable and fair prices\", Valero said.<\/p>\n
OPEC has yet to produce any concrete suggestions for achieving
\nthat aim, along with Chavez's vision of OPEC's transformation
\ninto a global powerbroker. And unlike Pinocchio, it will to do
\nmore than wish upon a star.<\/p>",
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