Getting back to basics when the celebrations are over

OPEC Bulletin Commentary October 2010

It came and it went - OPEC's 50th Anniversary on September 14.

There was a special press conference by Secretary General, Abdalla Salem El-Badri (see page 4), and the Golden Jubilee Edition of the OPEC Bulletin appeared.

Otherwise it was a day like any other at the office. After all, the world does not stop because of an anniversary, especially during these difficult times for the world economy and the oil market.

But this is not to detract from the significance of that day for OPEC. It was a day of achievement - 50 years of OPEC.

It was a day that people back in the tail-end of the colonial era would have never expected to happen - a group of heavily exploited developing countries standing up to the established industrialized powers, asserting their sovereign rights to exploit their own indigenous natural resources, developing successful modern petroleum sectors, becoming voices of influence in the global energy sector, and then seeing in the historic day of celebration as it dawned on September 14, 2010.

OPEC has, of course, organized a fitting series of activities to mark this historic occasion, and these have been spread out across the year.

The most recent was OPEC's 50th Anniversary Exhibition (see page 18) in the Italian renaissance-style Kursalon in Vienna's city centre, where famous Austrian composer Johann Strauss used to charm his audiences with his melodic waltz music. The ten-day exhibition provided a showcase of Member Country culture, impressing upon visitors that there is more to these countries than just oil. They all have their rich, colourful traditions, with discernible threads of history extending back millennia in some cases, to the very birth of modern civilization.

At the same time, the celebrations have had an accent on youth, underlining the importance of attracting future generations to the oil industry. Young people were much in evidence in organized tours at the exhibition. The Secretariat ran an international children's quiz on OPEC and the oil industry. And work is well advanced on a special children's book about oil.

Other memorable markers of this festive year have included an eye-catching logo, a new Website, anniversary postage stamps in Austria and Member Countries, special publications and a host of souvenirs, including colourful ties, scarves and pins worn by staff at the anniversary events. More activities are planned before the year is out.

While all this provides a welcome feel-good factor for the Organization, its Member Countries, its decision-makers and its staff, it remains a case of 'business as usual' in the world at large. OPEC is ever-mindful of the need to address the challenges facing the oil market and further afield, such as the approaching round of climate change negotiations and the ever-present concern about sustainable development and poverty eradication.

As we approach the northern hemisphere winter, the outlook for the oil market remains uncertain. The September issue of OPEC's Monthly Oil Market Report commented thus: "Forecasting world economic growth in 2010 has proved to be a considerable challenge. The persisting impact of the recent global recession, as well as the ongoing effects of the unprecedented government-led stimulus, have created a significant amount of uncertainty in forecasting GDP growth and consequently oil demand growth." It continued: "Now that the current round of government stimuli appears to be winding down, demand growth in the second half of this year is likely to return to the initially projected growth levels, assuming that no further government support is forthcoming."

Such uncertainty will be taken into consideration when OPEC's Ministers carry out their routine review of the Organization's production agreement at the 157th Meeting of the Conference in Vienna on October 14. Indeed, in assessing the oil market outlook, more emphasis is likely to be placed on the rate, the size and the global spread of economic recovery than on the usual seasonal factors for this time of the year.

The Ministers will, as ever, focus on reaching an agreement which will be in the best interests of the market at large, with the accent on stable prices, secure supply and fair returns to investors.

Students of OPEC history, however, will be at pains to point out that these three objectives appeared in our Organization's very first resolution of September 14, 1960.

In other words, when you get down to basics with regard to oil market essentials, very little appears to have changed over the past 50 years!

OPEC Bulletin October 2010

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