Enhancing the old ... embracing the new

OPEC Bulletin Commentary November 2007

The holding of the Third OPEC Summit of Heads of State this month is the latest reminder of the Organization’s abiding commitment to its longstanding objectives, as well as its readiness to recognize the new challenges facing the oil market and to respond accordingly.

Not only are the challenges increasing in number, they are also growing in complexity.

It is no longer simply a case of representing the interests of Member Countries in the oil industry and seeking means of achieving market order and stability, as was the situation at the birth of the Organization in Baghdad in September 1960.

OPEC has advanced a long way in the half century since then and the challenges it recognizes and acts upon have broadened considerably. They span such areas as: the national oil companies, including their relationships with their international counterparts; the downstream, especially in the light of the shortcomings that have manifested themselves recently; manpower in the industry, with the present shortages of essential skills; energy matters generally, including oil’s close cousin, gas, and not overlooking renewables; relations with other members of the global energy community; the environment, covering both climate change and local pollution; economic development and growth, with special emphasis on the needs of the world’s poorer nations; and world trade, particularly in the context of the Doha talks.

The first two OPEC Summits highlighted many of the additional challenges. For example, the First Summit, in Algiers in 1975, expressed the need for a new, more just international economic order, and, in calling for greater help for other developing countries, led directly to the establishment of the OPEC Fund for International Development. And the Second Summit, in Caracas in 2000, addressed the need to enhance dialogue among producers and consumers, highlighted OPEC’s concern about the global environment, and, in anticipation of the World Summit on Sustainable Development two years later, maintained that economic and social development and the eradication of poverty should be the overriding global priority.

Clearly, it can be seen that, while the challenges themselves are more numerous and complex, there is a vast network of interlinkages among them and this adds to the overall self-assigned mandate of the Organization.

Furthermore, the means of handling the challenges effectively has been as important, in a sense, as the challenges themselves, since it is crucial to get this right. Accordingly, OPEC ensures that, in its decisions and actions, the required attention is given to such key elements as strategic vision, daily market monitoring, long-term analysis, realistic scenario-building, meaningful dialogue and cooperation, and the latest developments in technology. In this respect, OPEC is well-supported by the work carried out by its Vienna-based Secretariat.

The Third Summit, to be held in Riyadh on November 17–18, will build upon the achievements of the past and will focus on three primary themes: providing petroleum; promoting prosperity; and protecting the planet. More details on these subjects can be found in this issue of the OPEC Bulletin.

During the course of its history, OPEC has become an established, respected member of the global energy community, with a vast bank of experience covering almost every possible eventuality in the oil sector and related areas. It is widely consulted on industry matters by a plethora of interests, including government, business, the media and academia.

The Third Summit will enable OPEC to strengthen its already solid credentials with regard to oil matters, as the Heads of State review the outstanding challenges facing the industry today, address the strategic implications for Member Countries and readjust the focus of the Organization accordingly for the years ahead.

This Commentary is taken from the November 2007 edition of the OPEC Bulletin, which can be downloaded free of charge in PDF format from the OPEC website.

OPEC Bulletin (November 2007)

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