September 2006 — A special month for OPEC

OPEC Bulletin Commentary July-August 2006

September 2006 was a special and a not-so-special month for OPEC.

Especially the second week.

This began with the 142nd Meeting of our Conference on the Monday, at our Secretariat in Vienna, where the focus, at least as far as the outside world was concerned, was on the near-term outlook for the market. In the light of the substantial moderation in oil prices in the preceding weeks, the Conference adopted a cautious, watchful approach, by agreeing that “Member Countries would take the necessary steps to ensure that supply and demand remained in balance, with prices at reasonable levels, supplying to the market the needed volumes.” At the same time, it “stressed its determination to ensure that crude oil prices remain at acceptable levels and Member Countries recorded their preparedness to respond rapidly to any developments which might jeopardize their interests.” Otherwise, the Conference would wait until December’s Extraordinary Meeting in Nigeria, before taking any market-related decisions that might then be considered necessary.

Tuesday saw the opening of the Third OPEC International Seminar at the historic Hofburg Palace in Vienna, and here the emphasis was on longer-term issues, as was clear from its title, ‘OPEC in a New Energy Era: Challenges and Opportunities’. As OPEC Conference President, Dr Edmund Maduabebe Daukoru, said in his welcoming address: “This theme has been chosen … to reflect the fact that there have been fundamental changes to both the character and the dynamics of the world energy industry since the turn of the century, and that this may, in turn, affect the way the industry addresses the challenges that lie before it.” The participants included Ministers from OPEC’s 11 Member Countries and other oil-producing and oil-consuming nations, top officials from intergovernmental bodies, chief executives of national and international oil companies, and renowned academics.

Around 40 presentations later, Dr Daukoru concluded the two-day event on the Wednesday with the overriding message that “fossil fuels during the so-called new energy era will continue to dominate the global energy mix and will continue to be vital for supporting the forecast expansion in global economic growth, which, under normal conditions should stay robust.”

Full details of both the Conference and the Seminar can be found in this issue of the OPEC Bulletin.

It is clear from these two important events how much OPEC cares about the welfare of the international oil market, for both now and the future, and the lengths to which it will go to ensure order and stability at all times, to the benefit of producers and consumers alike.

But the story does not end here! OPEC goes even further than this.

For a less-heralded, but, in its own way, equally significant event occurred at the Secretariat on the Thursday. This was the first meeting of the newly constituted Editorial Board of the Organization’s specialist quarterly academic journal, the OPEC Review. As many readers know, OPEC has been producing this subscriber journal for 30 years and, during this period, it has established itself as a respected scholarly publication, offering its global readership high-quality papers on energy economics. Next year, it will be relaunched, to enhance its effectiveness as a channel for academic discourse, and the Editorial Board, together with a newly designated General Academic Editor, the renowned energy specialist Professor Sadek Boussena, is part of the revamped administrative structure. OPEC considers it extremely important to have its own acclaimed academic journal, to demonstrate to the world at large how seriously it takes the need to access the very latest high-quality research to provide an intellectual base to its actions in the market and elsewhere.

And the Friday? Well, everyone needs time to recover!

But even more was to come in the third week of September. This saw top OPEC officials participate in two high-level meetings in Saudi Arabia on an issue which is gripping the global consciousness more than almost any other at the present time — climate change. One was the First International Conference on the Clean Development Mechanism and the other a Roundtable on Carbon Capture and Storage organised jointly by the European Union and OPEC as part of the wide-ranging energy dialogue they established last year. This demonstrated the importance OPEC attached to multilateral issues which relate to the provision of modern energy services, with particular emphasis on the needs of developing countries, sustainable development, and the eradication of poverty.

Clearly, with all of this happening, September 2006 was a special month for OPEC.

But was it really so special?

After all, OPEC was merely doing what it has been doing for decades — actively caring for the welfare of the oil market. The only difference to normal was that all this was happening within the space of one very hectic month.

This Commentary is taken from the September-October 2006 edition of the OPEC Bulletin, which can be downloaded free of charge in PDF format from the OPEC website.

OPEC Bulletin (September-October 2006)

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