OPEC may lose $600b due to carbon tax

OPEC may lose $600b due to carbon tax

JAKARTA (JP): The secretary general of the Organization of
Petroleum Exporting Countries (OPEC), Rilwanu Lukman, said here
yesterday OPEC could lose US$600 billion in potential revenues by
2020 due to the carbon tax imposed by OECD.

Lukman said the carbon tax imposed in the Organization of
Economic Cooperation Development (OECD) countries would cut
worldwide demand for crude oil to between 85 million and 87
million barrels per day (bpd) by that year.

According to an OPEC forecast, the world demand for crude oil
would increase by 37 percent to more than 95 million bpd by 2020
with OPEC accounting for 52 percent of the world's oil market, up
from roughly 40 percent at present.

World demand for crude oil stood at 73.48 million bpd last
year, 23.033 bpd of which were supplied by OPEC members.

"OPEC could lose around $600 million in cumulative revenues
over the 25 years from 1995 to 2020," Lukman said in his speech
at the ASEAN Council on Petroleum (ASCOPE) Conference and
Exhibition '97.

The four-day conference and exhibition at the Jakarta
Convention Center, South Jakarta, was opened yesterday by Vice
President Try Sutrisno.

OPEC groups Saudi Arabia, Kuwait, the United Arab Emirates,
Qatar, Iran, Indonesia, Nigeria, Libya, Algeria and Iraq.

The loss in potential revenue would considerably impact OPEC
economies and would reduce the capability to expand their oil
production, he said.

This, in turn, would result in oil supply shortages and price
volatility as OPEC has roughly three-quarters of the world's
proven crude oil reserves, Lukman warned.

Lukman emphasized that OPEC was concerned about the
environment but the organization believed that rather than
adopting negative policies to suppress the use of fossil fuels,
developed countries should concentrate on encouraging the
production of cleaner fuels and energy use efficiency through the
application of improved technologies and processes.

Lukman called on the international community to give due
recognition to the needs of OPEC members, which were mostly
developing countries, to derive revenue from oil in formulating
environmental regulation.

Lukman arrived here Sunday to attend OPEC's 103rd ministerial
meeting from Nov. 26 to Dec. 1 at the Dharmawangsa Hotel, South
Jakarta.

The meeting will discuss several topics, including Saudi
Arabia's proposal to raise OPEC oil-supply quotas and the
restructuring of OPEC's organization. The ministers will also
elect a new OPEC secretary general.

Lukman refused to comment on the raising of the quota
yesterday, saying the issue would be decided on during the
meeting.

Saudi Arabia has proposed that OPEC anticipate the growth in
world oil demand by increasing the quota at least 2.32 million
bpd next year, but most OPEC member countries have thus far
disagreed with the proposal.

Lukman also refused to talk about his prospect of being
reelected as OPEC's secretary general for the next three-year
term, but he said he was ready to do the job if the ministers
reelected him. (jsk)