02 Editorial Information 03 Commentary Oil and Politics Don't
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This month’s cover ... shows a close-up of the Iraqi Constitution after it was signed in Baghdad (Photo: Reuters/Peter Andrews). The back cover shows the OPEC Secretariat with the sculpture ‘Mano Mineral’ by Venezuelan sculptor Paul del Rio in the foreground (Photo: Vol XXXV, No 2 ISSN 0474-6279 March 2004 Reuters/Heinz-Peter Bader). 02 Editorial Information 03 Commentary Oil and politics don’t mix OPEC Conference confirms cut (p4) 04 Conference Notes 130th OPEC Conference confirms 1m b/d cut 8 Interviews Qatari Minister of Energy & Industry OPEC Fund Director-General (p10) 16 State visit Interviews with Al Attiyah and Al-Herbish (p8) Saudi Arabia’s Crown Prince Abdullah visits Austria 18 Forum Qatar plans to increase LNG exports to 60m t/y 20 Newsline Qatar’s gas export plans receive major boost State visit by Saudi Crown Prince (p16) Oil and gas news from OPEC (p22) 32 Market Review Covering January 50 Member Country Focus Development and economic news from OPEC Photo: Qatar Petroleum Qatar Photo: 55 Appointments Qatar inaugurates new LNG train (p20) 56 OPEC Fund News 60 Noticeboard 61 Secretariat Notes March 2004 1 COMMENTARY In a US election year, oil often becomes a political football There are, however, more co-operative alternatives Publishers Editorial policy OPEC The OPEC Bulletin is published by the Public Oil and politics don’t mix Organization of the Petroleum Exporting Relations & Information Department. The Countries, Obere Donaustrasse 93, contents do not necessarily reflect the official 1020 Vienna, Austria views of OPEC or its Mem ber Countries. Names Telephone: +43 1 211 12/0 and boundaries on any maps should not be Telefax: +43 1 216 4320 regarded as authoritative. No responsibility is Every time OPEC are affected by a number Public Relations & Information taken for claims or contents of advertisements. meets, there is no short- of factors unrelated to Department fax: +43 1 214 9827 Editorial material may be freely reproduced (un- age of pundits eager to the fundamentals of E-mail: [email protected] Secretariat officials less copyrighted), crediting the OPEC Bulletin advise the Organization crude oil supply and E-mail: OPEC News Agency: [email protected] as the source. A copy to the Editor would be what the correct course demand. There is a lack Web site: http://www.opec.org Secretary General appreciated. of action is (often one of domestic gasoline- Hard copy subscription: $70/year HE Dr Purnomo Yusgiantoro that our would-be producing capacity to Editorial staff advisers believe, rightly satisfy the steady demand Membership and aims Indonesian Governor for OPEC or wrongly, will growth, as many smaller Acting for the Secretary General Editor-in-Chief lower oil prices), and refineries have closed OPEC is a permanent, intergovernmental Or- Dr Maizar Rahman Dr Omar Farouk Ibrahim things were no down and no new gan i za tion, established in Baghdad, September Editor different in the run-up ones have been built. 10–14, 1960, by IR Iran, Iraq, Kuwait, Saudi Director, Research Division Graham Patterson to the 130th OPEC There is a patchwork of Arabia and Venezuela. Its objective is to co-ordi- Dr Adnan Shihab-Eldin Deputy Editor Conference at the end gasoline specifications nate and unify petroleum policies among Mem- Lizette Kilian of March. With that vary greatly from ber Countries, in order to secure fair and stable Head, Data Services Department Philippa Webb-Muegge (maternity leave) prices having remained state to state, making the prices for petroleum producers; an efficient, Dr Muhammad A Al Tayyeb Production firm in recent months, transfer of supplies in the economic and regular supply of petroleum to Diana Lavnick OPEC-watchers were event of a shortage (per- consuming nations; and a fair return on capital Head, Administration & Design keen to see whether the haps due to a refinery to those investing in the industry. Human Resources Department Elfi Plakolm one million barrels/ outage) impossible. The The Organization comprises the five Senussi J Senussi day cut announced recent introduction of Founding Members and six other Full Mem- Web site: www.opec.org in February would be stringent new specifica- bers: Qatar (joined in 1961); Indonesia (1962); Head, Energy Studies Department implemented, or perhaps tions for reformulated SP Libyan AJ (1962); United Arab Emirates Mohamed Hamel Visit the OPEC Web site for the latest news — as some were suggest- gasoline, mandating the (Abu Dhabi, 1967); Algeria (1969); and and in for ma tion about the Organization and its ing — delayed or even Photo: Reuters/Lou Dematteis reduction of sulphur Nigeria (1971). Ecuador joined the Organiza- Head, PR & Information Department Member Countries. Recent and back issues of abandoned altogether. levels and the elimination tion in 1973 and left in 1992; Gabon joined Dr Omar Farouk Ibrahim the OPEC Bulletin are available free of charge The decision, there- of MTBE, has only served in 1975 and left in 1995. on the site in PDF format. fore, to go ahead with the cuts as originally planned was doubtless to make a complex situation worse, and some states may need to Head, Petroleum Market Analysis not the one that some parties were hoping for but, seen objectively, it be granted exemptions from the new laws to enable them to meet Contributions Department was the right thing to do. It must be remembered that while there are gasoline demand this summer. Mohammad Alipour-Jeddi a great variety of factors — both fundamental and non-fundamental It is clear from the above that US gasoline price levels are influ- The OPEC Bulletin welcomes original contri- — that can affect oil prices, OPEC’s efforts to stabilize the market by enced by a wide variety of factors, and that the country’s oil industry butions on the technical, financial and en vi - Senior Legal Counsel adjusting production in order to balance supply and demand operate and government will need to work closely together in to order to ronmental aspects of all stages of the energy Dr Ibibia Lucky Worika strictly on the fundamental level. It would be risky at best and foolhardy seek solutions to these problems. OPEC, for its part, will do what industry, including letters for publication, at worst for the Organization to try and address problems caused by it has always done — to ensure that prices remain stable by seeking research reports and project descriptions with Head, Office of the Secretary General Indexed and abstracted in PAIS International other factors such as massive speculation, US gasoline specifications a balance between supply and demand. For the Organization to try supporting illustrations and photographs. Karin Chacin Printed in Austria by Ueberreuter Print and Digimedia and lack of refinery capacity, crude and product stock levels and so and use market fundamentals to dampen prices that are mainly driven on, which lie clearly outside its sphere of influence. by non-fundamentals would be, as the saying goes, like trying to put These factors are worth examining in more detail, since some of out the fire with gasoline. the loudest voices calling for OPEC to abandon its output cut have In this US election year, we expect oil to remain in the limelight been coming from the United States. It is, of course, an election year one way or another. It is surely not asking too much for all the par- Advertisements in the US, and with forecasts from the Energy Information Admin- ticipants in the campaign to abandon the simplistic finger-pointing istration showing that consumers will have to pay record prices for and recognize the US gasoline situation for what it is — a complex The OPEC Bulletin reaches the decision-makers in Member Countries. For details of its reasonable advertisement rates see the appropriate gasoline of around $1.76/gallon this summer, politicians are looking one requiring all parties to work together to find a solution. OPEC page at the end of the magazine. Orders from Member Countries should be sent directly to the Editor-in-Chief at the Secretariat address. for scapegoats. It therefore seems inevitable that oil will remain a politi- is concentrating on the fundamental issue of balancing supply and Otherwise, orders should be placed through the Advertising Representatives, whose contact details are at the end of the magazine. cal football in the US — at least until the election campaign is over. demand, as indicated by reported OPEC production levels of over However, while it may be convenient to blame OPEC for high 28m b/d. Let us hope that the US will seek a similar balance in its gasoline prices, it is also misguided. Gasoline price levels in the US complex gasoline market. 2 OPEC Bulletin March 2004 3 CONFERENCE NOTES CONFERENCE NOTES 130th OPEC Conference confirms production cut of 1.0 million The United Arab Emirates’ Minister of Petroleum and Mineral Resources, HE Obaid bin Saif Al-Nasseri (r) and barrels/day from April 1 Algeria’s Minister of Energy & Mines, HE Dr Chakib Khelil (c) greet Mexican delegate Raúl Cardoso. Qatar’s Second Deputy Prime Minister and Minister Indonesia’s Minister of Energy and Mineral Kuwait’s Minister of Energy, of Energy & Industry, HE Abdullah bin Hamad Al Resources, OPEC Conference President HE Sheikh Ahmad Fahad Attiyah (l), talks to Libya’s Secretary of the and Secretary General, Al-Ahmad Al-Sabah (r), welcomes People’s Committee for Energy, HE Dr Fathi Hamed HE Dr Purnomo Yusgiantoro (r), Oman’s Minister of Oil and Gas, Ben Shatwan (c), and Nigeria’s Presidential Adviser on listens to the Director of OPEC’s HE Dr Mohammed Bin Hamad Petroleum & Energy, HE Dr Edmund M Daukoru. Research Division, Dr Adnan Shihab-Eldin.