Excellencies, ladies and gentlemen,

I should like to thank Your Highness for inaugurating and sponsoring this 138th Extraordinary Meeting of the OPEC Conference, and to welcome all Heads of Delegation and participants today. It is a great honour for the State of Kuwait to host this meeting and to invite Your Excellencies and the other distinguished guests to our beloved country. I hope we succeed in making everything as comfortable as possible for today’s meeting.

2005 witnessed many incidents and challenges that called for continuous, hard work from us all. OPEC and non-OPEC producers took a series of measures, amongst which was raising current production and expediting plans to increase future production capacity. These actions had a positive impact on the oil market, restoring balance and at the same time reducing price fluctuations, gradually bringing the OPEC Reference Basket back to below $50 a barrel. Prices increased again last week, however, due to the cold front that hit the Northern Hemisphere.

Today, we shall discuss current developments in the international oil market, as well as the outlook for next year, to help us reach our objective of providing sufficient supplies to consumers at all times.

I should like to assure consumers that there will be sufficient spare production capacity available to meet rising demand this winter and well into the future. OPEC’s spare capacity will reach the comfortable level of around 2.5 million barrels a day by the end of this year, and we expect to add another million barrels per day capacity in 2006; much of this will come in the form of light and medium crudes, which are heavily in demand. OPEC is ready to bring this capacity on-stream at short notice, should the market require it. With additional supplies of 1.2–1.4 mb/d expected from non-OPEC, this means that the total growth in capacity next year will far exceed the forecast rise in world demand, of around 1.5 mb/d.

The picture is expected to improve in the medium term, so that by the year 2010 the cumulative growth in capacity — from OPEC and non-OPEC and including OPEC natural gas liquids — will be around 12 mb/d, or even more, which is well above the expected cumulative rise in demand over the same period, of 7–8 mb/d.

Downstream, the situation, however, is different. The products market remains under pressure from the downstream bottlenecks with which we have now become familiar, especially in major consuming regions. Urgent attention is required in this area, to avoid creating upward pressure on light sweet crudes, which, in turn, drives up prices of other crudes. While the need for spare capacity upstream is well recognised, we feel that consuming countries should pay more attention to relieving the constraints in the refining industry.

Although OPEC believes that solving problems in the downstream sector is essentially the responsibility of consumer countries, many of our Members have nevertheless taken it upon themselves to build additional refineries, both domestically and abroad, for the overall good of the industry.

Let me at this point repeat OPEC’s longstanding calls to consumer governments to review their fuel taxation policies, especially during this period where prices are very high.

All of this brings me to a subject with which we have now been familiar for some time — dialogue and cooperation. During recent decades we have seen steady improvements being made in this very important area, involving producers, consumers, the international oil companies and other influential parties in the industry, and these have already brought many benefits throughout the supply chain.

Indeed, I am pleased to welcome to today’s Extraordinary Meeting distinguished representatives from four non-OPEC oil-producing countries — Egypt, Oman, Sudan and Syria. Once again, their presence underlines the importance their Governments attach to constructive dialogue and cooperation with OPEC and its Member Countries.

I am also pleased to say that 2005 saw some major advances in dialogue. It began with the First Round Table of Asian Oil and Gas Ministers in New Delhi, aimed directly at the heart of the world’s fastest-growing region. We then witnessed the establishment of a formal Energy Dialogue between the recently expanded European Union and OPEC. Two Ministerial meetings have already taken place within this Dialogue, as well as a joint Round Table on oil market developments. Furthermore, next week, at the invitation of the Chinese authorities, I shall begin an Energy Dialogue with China, at a time when China is experiencing rapid growth in energy demand. A similar agreement may soon be reached with the APEC Asia-Pacific group of economies, while, for some years now, energy experts from OPEC have been in regular consultations with their counterparts in Russia.

Developments were also seen in another area. 2005 witnessed the inauguration of the headquarters of the Secretariat of the International Energy Forum, in Saudi Arabia. One of the Forum’s key programmes, the Joint Oil Data Initiative (JODI), was launched at the same event, and OPEC is one of the six intergovernmental organisations which established this initiative, whose goal is to enhance oil market transparency through improved timeliness and accuracy of data.

Excellencies, ladies and gentlemen,

I am confident that the Organization is committed to executing its policies in line with its aim of keeping oil prices within a reasonable range, for both producers and consumers. This means that OPEC will continue to supply the market with sufficient quantities of crude oil. In addition, it will continue to invest heavily in expanding its production capabilities, while building an adequate cushion of spare capacity, which can be used to meet future challenges.

Once again, thank you.