CARACAS, 2 June 2006 — OPEC oil producers yesterday held informal talks on admitting Angola, Sudan and possibly Ecuador into their ranks in a move that would tighten the cartel’s grip on world oil supply. The Organization of the Petroleum Exporting Countries has to weigh the added production of the countries against the political fallout of admitting some regimes cold-shouldered by the West, sources said.
An OPEC spokesman said that “enlargement is not on the agenda of the meeting” in Caracas, describing the discussions as more informal. “Several countries are considering returning to OPEC like Angola, Sudan and Ecuador,” Venezuelan Energy Minister Rafael Ramirez told state-run television. In fact, only Ecuador was previously a member of the group. It pulled out in 1992, after struggling to meet its official oil output quotas. Gabon withdrew for the same reason in 1995.
The last country to join OPEC was Nigeria, in 1971. The country is now sub-Saharan Africa’s biggest crude producer, but recent unrest has swiped 20 percent off its normal output. Ramirez said it was necessary to “reinforce OPEC in the face of pressure” from industrialized countries, attacking “aggressive” US policies against nations with big oil reserves such as Iran, Iraq and Venezuela.
Sources said the entry of Angola and Sudan was being taken more seriously by OPEC heavyweights such as Saudi Arabia than that of Ecuador, which appeared to be more a hobby horse for Venezuela, now OPEC’s only Latin American member.
The oil market has been convulsed for weeks by the threat of UN sanctions against Iran, which, after Saudi Arabia, is the second-biggest oil exporter in OPEC. Crude prices fell heavily on the US offer, before recovering ground on the Iranian remarks. Markets have also been reassured about OPEC’s intentions to keep output levels steady. “Our primary objective is to help stabilize the market. We would hate to do anything that exacerbates the current volatility,” said Nigerian Oil Minister Edmund Daukoru, who is OPEC’s current president. “We are doing all we can to stabilize prices, but the geopolitical situation continues to be a counter-factor to these efforts,” he said, also blaming refinery shortfalls in consuming nations.
OPEC has an official production quota of 28 million barrels per day, its highest level in a quarter century, but is under pressure from the Group of Seven club of rich nations to pump more to keep pace with booming demand. However, OPEC members argue that oil supplies are plentiful. They blame the tensions over Iran and unrest in Nigeria, sub-Saharan Africa’s biggest crude producer, for sparking a speculative frenzy on the markets.
Qatar’s Energy Minister, Abdullah bin Hamad Al-Attiyah, was more circumspect about prospects for a cut at OPEC’s next meeting, in Vienna on Sept. 11. “We’ll see. We are very dynamic,” he said, adding that for now, there is “no justification” for a cut with oil prices so high.
Venezuela’s leftist President Hugo Chavez, a major thorn in the side of the US government, has also been lobbying for OPEC observer status for Bolivia, which has minimal oil reserves but is a major producer of natural gas. Chavez late Wednesday accused the United States of turning Venezuela “into an oil colony” during the 20th century.
The Venezuelan leader instead praised presidents Evo Morales of Bolivia and Alfredo Palacios of Ecuador for “their dignified and brave decision to take over control of their crude oil” reserves from foreign oil companies. That decision prompted the US to abandon free trade talks with Ecuador, a decision that Quito labeled “unacceptable blackmail.” Sudan is even less savory a state for the United States and its European allies, after years of civil war in the region of Darfur where as many as 300,000 civilians have died of disease, hunger and militia attacks.
