OPEC, independence flag for countries in the South Extraordinary Meeting of the OPEC Ministerial Conference

OPEC, independence flag for countries in the South Opening speech at the 141st Extraordinary Meeting of the OPEC Ministerial Conference

The 141st Extraordinary Meeting of the Ministerial Conference of the Organization of Petroleum Exporting Countries (OPEC) was held in , on June 1, 2006. This Meeting gathered 200 delegates, in- cluding ministers, OPEC governors, national representatives and their respective technical teams. Following are the opening speeches of Hugo Chavez, President of the Bolivarian , Edmund Maduabebe Daukoru, President of the Conference and State Minister for Petroleum Resources of Nigeria, and Rafael Ramirez Carreno, People’s Minister for Energy and Petroleum and President of PDVSA. SPEECHES SERIE Nº9 OPEC, independence flag for countries in the South

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Coordination and production: Public Affairs Corporate Management of Petroleos de Venezuela, S.A. Telephone Number: +58 (212) 7084021. Fax: +58 (212) 7084460. Caracas, Venezuela, June 2006 he current capitalist development Venezuela gave a special welcome to Tmodel, based on the irrational ex- the 141st Extraordinary Meeting of the ploitation of energy, is neither viable nor Ministerial Conference of OPEC, which sustainable. The world’s hydrocarbon was held in Caracas on June 1, 2006. resources are not enough to sustain the This publication included the opening current huge consumption of industria- speeches of Hugo Chavez, President lized countries or their future projected of the Bolivarian Republic of Venezuela, consumption. Rafael Ramirez, People’s Minister for In view of such enormous energy vo- Energy and Petroleum and President racity, the Bolivarian Government of of PDVSA, and Edmund Maduabebe Venezuela is implementing a Full Oil Daukoru, President of the OPEC Sovereignty policy that is promoting, Conference and State Minister for within the Organization of Petroleum Petroleum Resources of Nigeria, in the Exporting Countries (OPEC), the ratio- framework of the 141st Extraordinary nal management of the exploitation rate Meeting, with the purpose of increasing of this natural non-renewable resource, the propagation of the strategic role pla- the maximum value of oil resources, a yed by OPEC in the international con- worldwide energy equilibrium, and the text. strategic use of hydrocarbons for inte- I welcome you brothers from Saudi gration, social justice, solidarity, and the Arabia, Algeria, United Arab Emirates, fight against poverty and against social Indonesia, Iran, Iraq, Kuwait, Libya, exclusion. Nigeria and Qatar.

Saudi Algeria United Arab Iraq Libya Arabia Emirates

ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES SPEECHES SERIE Nº 9

4 Extraordinary Meeting of the OPEC Ministerial Conference Speech of the President of the Bolivarian Republic of Venezuela

OPEC is a liberating organisation for the development of our peoples of the South

Good morning: Your Excellencies and State companies, general directors Ministers of Energy of non-OPEC of the Ministry of Energy and Petroleum, petroleum producing countries here with members of the Board of Directors of us, Egypt, , and Angola; honoura- Petroleos de Venezuela, special guests, ble gentleman Mohammed Barkindo, ladies and gentlemen from national and Secretary General of the Organisation of international media. All of you friends: Petroleum Exporting Countries (OPEC); 45 years ago, around this time of the your Royal Highness, Abdelaziz Bin year in 1961, the Statute that gave birth Salman, Prince of the Kingdom of Saudi and support to this date, and will always Arabia; Your Excellencies Ambassadors, continue to support the Organisation Extraordinary and Plenipotentiary ac- of Petroleum Exporting Countries, our credited before the national govern- Organisation, were being approved ment; Honourable Governors, National here in Caracas. While I evoke this, mis- Representatives before the OPEC; ter president, ministers and governors, José Vicente Rangel, Executive Vice I would like to pay my respects to the President of the Republic; Foreign founders of OPEC, the countries and Affairs Minister Ali Rodriguez Araque; leaders that undertook that responsibili- Rafael Ramirez Carreño, Minister of ty with an extraordinary vision. The sole Energy and Petroleum and President creation of OPEC, we can say, was a re- of Petroleos de Venezuela (PDVSA); volution that shocked the world. and other Ministers from the Executive Cabinet; Ivan Orellana, Governor of the I would also like to remember the his- Bolivarian Republic of Venezuela befo- torical Summit we celebrated here re the OPEC, presidents of autonomous in Caracas almost six years ago, in

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September of 2000, exactly when a ries the harshest colonialism, countries century was ending and a new cen- that were condemned by the powerful tury began. We can say without exag- of the earth. gerations of any kind that in the 2000 When I speak about these things I Summit, similar to how OPEC was being always remember, and you know I born in 1960 in Baghdad, twenty five speak from the heart and soul, I remem- years later here in Caracas OPEC was ber Frantz Fanon and his great book being reborn, because the life, course “The Wretched of the Earth” that helped and path of our Organisation has not awake our conscience when we were been easy. youngsters and even children. I wanted to go back to those histori- So, through you, brothers and sisters, cal events that took place here. Today we send greetings to the forgotten we warmly welcome the President, the peoples of Africa. Through you we send Secretary General, the Ministers, your greetings to this great world, great for its Royal Highness Prince of Saudi Arabia, geographical extension, great for how the Ministers of non-OPEC oil produ- extended throughout time the Persian- cing countries, and all members from Arab Gulf is, those legendary lands, African delegations, because beyond deep and full of infinite knowledge. The OPEC there is Africa, Asia, the Middle Arab peoples, the Persian people, plea- East, the Persian-Arab Gulf and Latin se receive our warm greetings, our wel- America. Let’s see then who is part of come, our affection, and even more, our OPEC, countries from the third world, love. Salam Alekum! countries that were imposed for centu-

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To the Asian peoples here represented, water he had, and he kept on bles- we send our greetings, we express our sing and blessing, but the devil never admiration, and in particular our sorrow stopped erupting. This was the way oil feelings to the Indonesian people who appeared in Venezuela. And as early as are currently experiencing a great tra- the beginning of the 20th century, in this gedy, another one of the tragedies the border region with our sister , world is undergoing. An earthquake there already was an oil production, re- has devastated entire populations, en- fining, distribution and commercializa- ded thousands of lives, and caused tion industry. Venezuela exported some hundreds of thousands of victims. Our refined products, such as kerosene, to sorrow feelings go to the people of Colombia and some Caribbean coun- Indonesia and our willingness to provi- tries. It was an industry with little scien- de all possible support, and I am sure I tific and technological skills, but it was a speak for all OPEC countries to our bro- national industry, with domestic capital thers the people of Indonesia. and directed by Venezuelans, managed by Venezuelans, called La Petrolia del This past May 31, we gathered at the Tachira, which is something very impor- Military Circle and we commented on a tant for us Venezuelans. few things I would like to mention now in the inauguration of our Summit. Then, the eyes of the developed coun- tries of the world, and especially the You know dear friends that oil appeared imperialist eyes of the United States in Venezuela over a century ago. Our of America started to carefully watch indigenous communities used it to build Venezuela. And it was then when, along their ships, to lighten their houses and with the beginning of the 20th century, a for other purposes. But petroleum as new era in the political, economic and it is nowadays appeared in Venezuela social history of our country began, as the product of an earthquake in the Andean mountains. The story tells that the earth opened up and the black, “We are members of the Organization of Petroleum thick liquid started to flow. Some -far Exporting Countries, and not only petroleum, but mers from the area saw that running also peace and progress. We want to guarantee adequate and fair supply for the development substance and thought it was the devil of the world. We want to preserve our natural coming out of the earth, they looked for resources and have the appropriate to a priest in the nearest town and it seems develop our nations”. that the priest used up all the wholly

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Edmund Maduabebe Daukoru, State Minister for Petroleum Resources of Nigeria and President of the OPEC Conference, along with Hugo Chavez, President of the Bolivarian Republic of Venezuela, and Rafael Ramirez, People’s Minister for Energy and Petroleum and President of PDVSA.

heavily defined by the oil factor, by oil dear visiting brothers, workmates of geopolitics, and by the United States OPEC, here in South America a new imperialist geopolitics that started civilization was being born, resulting counting the oil reserves that appea- from the mix and crossbreeding of the red and appeared and appeared here indigenous peoples of this land with in Venezuela, incessantly, as its own oil the blacks brought from our sister and reserves to feed its capitalist, imperialist beloved Africa. And it was the mix of development model. European, African and Indo-American blood that resulted into our civilization, Something happened here as well, but the great native land of South America, about 500 years ago, when war-torn as our Liberator Simon Bolivar used to Europe arrived here and started the call it. lootings here in Indo-American lands. Gold, silver, precious stones, minerals, With the 20th century Venezuelan began spices and products of all kinds. And to turn into an oil producing country with this was nevertheless how we were large reserves, and companies from born as a civilization. Because here, the northern countries began to arrive.

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And it was close to 1917, when the First Exactly one hundred years ago Cipriano World War was ending, that the first ship Castro governed Venezuela around this loaded with Venezuelan oil sailed from time of the year, and he was beginning to the San Lorenzo port in Zulia state. “I dream of the day when Venezuela will not Now, to have an idea of the unfair model be the only Latin American country member of OPEC”. of production and distribution of that re- source and the benefits that this natural resource, petroleum, yielded and yields put order in the country, a country rava- to this date, I would like to comment or ged by internal wars, a destroyed coun- refer to a figure I read in one of those try with one century of violence, war, books written by a Venezuelan author first independence and then destructi- who we still remember very much, and ve internal wars. Castro faced internal today I would like to pay my respects conspiracy, the blockade of Venezuelan to his memory, one of the most active coasts by European powers, the criollo men in the foundation process of OPEC, oligarchy, stateless and anti-national, I am talking about Juan Pablo Perez and the imperialist desires of the United Alfonzo. States of America. Castro passed the first petroleum or mineral law that we In one of these books Perez Alfonzo know about after the Bolivar Decree, a makes a historical, economic, social, decree that was never complied with. mathematic and even financial analysis Let’s remember he was overthrown. And of the oil production model imposed on how was the government of Cipriano Venezuela. One hundred years ago, a Castro overthrown? Who was behind that patriot governed Venezuela. After the overthrowing? It is not very hard to find tragedy experienced by Venezuela du- that out. Just a few days after the coup ring the last seven decades of the 19th d’état against General , century, after the violent jolt of indepen- who happened to be out of the coun- dence, after Simon Bolivar’s tragedy try due to sickness, several war ships and the dismembering and collapse of from the United States Navy arrived to the Bolivarian dream of the 19th cen- the La Guaira port to support the new tury, a government arose in Venezuela government. And a few months later a claiming a restoring revolution, and at dictatorship was installed in Venezuela the front was a man that came precisely supported by the United States impe- from those mountains where the devil rialism, and this dictatorship started showed up: Cipriano Castro. granting concessions, the sadly renow-

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government of Juan Vicente Gomez, the tyrant, to a United States company created around that time: the Caribbean Petroleum Company. And hence the North American empire became the ow- ner of our country.

To have an idea, and I quote figures from Perez Alfonzo, from 1917 to 1928, during this first decade of massive and industrial production and export of Venezuelan petroleum, almost 300 mi- llion crude barrels were exported. The price of the crude barrel was less than one dollar. And do you know what was the benefit that Venezuela obtained from that huge mass of oil? Eight million dollars, that was what the Treasury re- ceived, and it is entered in the records of the government of those years. It was a real looting.

I do not know which one was more ma- licious; I do not know which looting was “President Chavez has led the Full Oil more harmful and brutal, if the one ca- Sovereignty policy that is currently rried out by the Spaniard conquerors knocking down the foundations of from 1498 to 1700 and beyond, or the the anti-national strategy called oil opening”, Ramirez indicated. oil looting on Venezuela during the first decades of the 20th century. Because the was certainly very harmful, but they built cities, roads, and ned oil concessions. Max Valladares, an although in an imperialist and cruel way, infamous Venezuelan, received almost there was a crossbreeding of races, po- the entire country under a concession pulations started to settle down, and without paying a penny for it. And just a civilization was born. But in the 20th a few days later Max Valladares trans- century, what cities were born? On the ferred the concession granted by the

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contrary, cities and estates were destro- yed because of the imperialist desires “OPEC is an independence flag for countries in the South, one of the most important achievements in of oil production. the third world. Latin American peoples are willing to be free”. Well, eight million dollars out of a volu- me of 300 million barrels, if we round up the price of the oil barrel for ten years lism wave, in the midst of a true world to one dollar, not even 3% of the benefit revolution, that the proper conditions for that goes to the owner of the natural re- the birth of our Organisation of Petroleum source. And that did not change much Exporting Countries emerged. in the 30s or 40s. And at the end of the Last night our friend, the Minister of 40s a government that wanted to reco- Petroleum of the Kingdom of Saudi ver control of the raw material arrived, Arabia, was remembering that when and the President of the Military of OPEC was being born the price of pe- that government was assassinated, his troleum was still one dollar. A while ago name was . I talked about the price of oil in 1915, And then the 60s arrived and the world 1917 and 1920, which was close to one started to change with a wave of in- dollar, or maybe a bit less. And 1960 dependence movements that swept arrived and oil was still one dollar, and Africa, the Caribbean and Asia, the the big industrial powers were taken same thing that had happened here in oil away from Latin America, Asia, the South America and Central America at Middle East and Africa to quench their the start of the 19th century started to thirst, to feed a non-viable development powerfully occur in the middle of the model. OPEC is born that way and it 20th century in Africa and Asia. Great starts to change the panorama progres- leaders and popular movements began sively, it starts to change the market to emerge vigorously. softly and progressively, our countries take sovereign control over their natural We have to remember that back in those resource, our countries then take over years a Summit took place in Indonesia the power to decide on something that with renewed ideas, with independence was not new, a quota system. ideas. Arab nationalism raised its victo- rious flag, especially from Cairo with the The quota system that OPEC started infinite force of Nasserism. The world to establish was nothing new. What ha- started to change during those years ppened was that the quota system was and it was in the middle of the nationa- being controlled by the seven sisters

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and the countries that owned the natu- ce supply and demand based on con- ral resource did not participate at all in servative tenets. It was acknowledged setting those quotas that the big multi- that the efficient production of this de- national oil companies controlled in res- pletable non-renewable natural resour- ponse to the mandates of their parent ce was only possible in an environment companies and dominant countries, of stable prices, and so did the United always at really low prices. Of course, States courts acknowledge it as well. It not as low as to cause losses to the se- was not a matter of a cartel or produ- ven sisters, but very low prices with the cers that might be considered illegal; it propose of benefiting large consumers. was definitely a matter of rationally pro- ducing a depletable non-renewable na- The quota system to regulate the world’s tural resource. It was a matter of ending oil market dates back to the second de- and preventing its greedy and destruc- cade of the past century. At that time, ting production, which resulted from the the United States was by far the largest unrestricted capitalist competition that producer worldwide, besides currently had taken place the first 50 years of the being, until 1947, a net exporting coun- United States oil production. In other try. And it was the United States gover- words, it was exactly in the United States nment, with its federal structure, the one of America where the quota system was that controlled a quota system to balan-

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born, and then the seven sisters impo- “Some day we hope to have (in Latin America) a sed such quota system worldwide. But strong currency that might be called Sucre, so that I insist, we did not have anything to do we would do away with the dollar dictatorship”, with it, we were being exploited in a bru- asserted President Chavez, who proposed this tal way. topic for a next debate.

Since the time of its birth in 1961 OPEC and of the market, the theory of the end has been the only authentic revolution, of history, when the evil, irrational and which indicates that the great Victor colonialist theory covered Hugo was right when he said the phra- the world as a gloomy cloud, specially se: there is nothing more powerful than in the 90s OPEC was in the brink of dea- the idea which time has arrived. Hence, th. And one of the countries in particular it was possible in the 60s, due to global whose government acted as a Trojan circumstances, for global changes to horse within OPEC was Venezuela and occur, some of which I have referred to the governments it had during the 90s. previously. PDVSA was taken over by anti-natio- Now we always remember that phrase nal interests, a technocratic PDVSA of a president of the United States that that started to put into action not the said: we will put OPEC on its knees, plans created by any government be- because OPEC started to be sanitized cause we really had no government in by global powers, because OPEC has Venezuela; instead, big international always represented an independence interests that dominated the continent flag, independence particularly for us, governed Venezuela at that time, a kid- countries of the third world, countries napped PDVSA, acting as a Trojan hor- of the South. One of the largest revolu- se against itself and the brother coun- tionary acts, in my perspective, in the tries of OPEC. history of the countries of the third world At the end of the 90s, the Minister was the birth of OPEC. That president of of Energy, at that time Minister of the United States that hollered and said: Hydrocarbons, said a phrase that was we will put OPEC on its knees. They did repeated many times on radio and tele- it. OPEC started to weaken during the vision to Venezuelans, they were prepa- 80s, to weaken, divide, and specia- ring Venezuela’s exit from OPEC, it was lly during the 90s, after the fall of the an already made decision, they were Soviet Union and the Berlin Wall, when only preparing the path to take that de- the irrational theory of the invisible hand cision, or better to execute it: OPEC is a

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chatting with His Holiness Benedict XVI and I remember that as soon as we sat down the first thing he asked me was: “President, Venezuela, so much richness and poverty. What a contrast, right?” He gave me the opportunity to explain to him my thoughts in that re- gard, of how a country that started pro- ducing oil before the turn of the 20th President Chavez restated the century, a country that for several de- idea of considering the Euro as a cades was the first oil exporter of the reference currency when setting oil world, a country that fed a good part of prices, since the dollar is becoming weaker. the Western industrial machine with its oil, ended up in the 20th century with enormous poverty and misery extended club of Pinocchios. This was one of the everywhere. most repeated phrases here. There was never a drop of oil for the I remember when I was a presiden- Venezuelan people, the criollo oligarchy tial candidate in 1997; the Bolivarian and particularly the North American em- Revolutionary Movement that powerfu- pire sucked up the oil. Now oil belongs lly emerged in Venezuela at the end of to the Venezuelan people and oil will be the 80s and the beginning of the 90s as for justice, equality and the development a result of the historical crisis that our of our people. That is the very truth. country was undergoing at that time, It takes a bit to achieve it. If Paris is worth burst in, dragged us, and it still does, a mass, our country is worth many more and here we go. We are not the cause; masses. This is what it is really happe- we are the result of history, of a ruptu- ning in Venezuela, and this is the essen- re, of an emergency, of a volcano, that ce of the permanent aggression that the is simply what we are. There is an on- North American empire has inflicted on going revolution here, a revolution that Venezuela for the past seven years, that has to do a lot with the oil production is the fundamental cause for the coup model imposed on Venezuela in the d’état that occurred on April 11, 2002, 20th century. that is the fundamental cause by which Just a few weeks ago we were in Rome, the United States is now saying that we

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support terrorism and that we are a des- tabilizing factor in the American conti- “In Venezuela we decided that the purpose of nent, because now we are free, that is that price band is to regulate and avoid ups and downs and market volatility. OPEC became and will what we are and we could not care less continue to be a powerful regulating entity”. about what the North American empire says. We are decided to be free, and as I would like to thank the many people José de San Martin said: “We are free, that worked first unnoticeably and af- everything else does not matter at all”. terwards publicly in the development of Now dear brothers and sisters, OPEC OPEC’s re-launching plan, or better yet, was put at the brink of death, and it was OPEC’s rebirth plan. We even went to Venezuela who was stabbing it from wi- Baghdad and we did not go there for thin following the imperialist game. What us, we went there for OPEC. I remember was the price of the oil barrel in 1998? and I pay my respects today to a bro- Close to 10 dollars per barrel. If we go ther that gave me much advice and is back in time to make a mathematic- not physically here with us, I am talking historic equivalence and we compare it about King Fahd of Saudi Arabia, who to 1917 is very likely that by 1998 the despite his age and difficulties did not price of the oil barrel was comparatively stop hosting me and chatting with me. less than its value of one dollar in 1915 I remember prince Abdul, nowadays or 1917. In other words, a century went the sovereign king of Saudi Arabia. by and we gave away oil for a century I remember the conversations with to quench the thirst of the developed Abdelaziz Bouteflika in Algeria, with countries. And the peoples of Africa, Muhamar Khadafi in Tripoli. How much our peoples in Asia, our peoples in did ex President Muhammad Jatami of Latin America were sinking in underde- Iran helped us, from the point of view of velopment, misery and backwardness. knowledge, the reality that OPEC and the Colonialism, that is called colonialism. Arab and Persian worlds were living tho- Imperialism, that is called imperialism. se years, so we could jump in and take That is why OPEC is an anti-imperialist a chance. Some used to ask me, “are organisation, OPEC is an anti-imperia- you crazy? This is a crazy thing!” Well, list organisation, OPEC is a liberating and how could we not remember Emir organisation for the development of our Ahmed of Kuwait and his good sense of peoples of Latin America, Africa and humour when facing the harshest and Asia. toughest situations? Also Kuwait, Qatar, the United Arab Emirates. How could

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important role in our organisation. All “We cannot have external stability without the roles being played are important. having internal stability, and I am referring Our role is important too. And they know to the stability of our nations in economic, about our absolute decision for OPEC political and social terms. This stability is nowadays threatened by the shadow of not only to continue to exist, but also to interventionism and State terrorism, resulting continue to strengthen and grow. The from the desire of some nations to allot 2002 coup d’état happened. And that themselves reserves by force”. pro-imperialist government arrived, that dictatorship installed itself here in we forget our brother General Olosegun Venezuela, once our government fell Obasanyo, President of Nigeria? Or the at the crack of dawn that terrible day Indonesian President at that time. Or of April 12, 2002. And what were the the conversations with then President statements, which are recorded, of that Saddam Hussein to assure Iraq’s atten- government that did not even last 48 dance, as it happened, to the Caracas hours, that was swept by the Venezuelan Summit. Then the aggressions and people and the soldiers of the Mother threats from the United States. I remem- Land, as we will sweep any attempt of ber Washington said that Chavez could dictatorship in Venezuela or any ag- not go to Baghdad and they were irri- gression against Venezuela. But those tated when we were in Teheran. From statements are part of history now and Teheran we went to Baghdad. They said they demonstrate that the coup d’état that we could not fly because there was was directed straight to the heart of a non-flying zone, but we did arrive to OPEC. That government declared that Baghdad. Venezuela would not follow OPEC quo- tas. You remember that we had decided In 2000 we celebrated the successful in OPEC a price band of a minimum of Summit of Presidents, Sovereigns, and 22 dollars and a maximum of 28 dollars. Heads of State of OPEC countries here And that if the price rose over the 28- in Caracas. The history of Venezuela dollar ceiling and continued to be so for after that is well known. The imperialist a certain number of consecutive days, aggression was not only being inflic- then OPEC would automatically increa- ted against Venezuela but also against se production, I believe to 500 thousand OPEC. It attempted to stop the streng- barrels, to measure the impact. Similar thening of OPEC and the North, the he- actions would be taken if the price went gemonic power centres knew, and still below 22 dollars. Production would be know, that Venezuela modestly plays an

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automatically trimmed down to 500 attacks against the Iraqi people and a thousand barrels. It was a wise decision halt to the threats against the Iranian from OPEC. And at the end it was even people. Both of them are peoples who accepted by industrialized countries, are brothers and peoples of OPEC. Let the big consumers. us build ourselves in peace.

I remember the last conversation with a OPEC does not want war. OPEC does not president of the United States, former want backwardness; elaborating, you President Bill Clinton. This was a gentle- may even say that the acronym OPEC man with whom you could have a con- could be spiritually extended. I mean, versation, or rather you still probably Organisation of Petroleum Exporting can. The same is not applicable to the Countries could also be Organisation current president of the United States. of Peace Exporting Countries, or I think he is a threat to the world. He is Organisation of Progress Exporting a real threat. By the way, I take this op- Countries. That is our Organisation. We portunity to demand the withdrawal of want peace. We want to guarantee an United States troops from Iraq and to let adequate and fair supply to achieve a that people live in peace. We strongly balanced development of the world. We demand before the world a halt to the want to preserve our natural resources

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and we want to have only the resources Of course this was the plan prepared necessary for the development of our and being executed through the so-ca- countries, for the development of our lled Oil Opening, which we have already peoples. closed and buried with the application of this new , of the new That dictatorial government installed for Hydrocarbons Law and with the plan 47 hours also declared that Venezuela we have called Full Oil Sovereignty. We was no longer a member of OPEC, that have buried the Oil Opening plan, which OPEC quotas would not be followed, was a plan to give away the country and that PDVSA would retake the so called to murder OPEC. Venezuela, according volumetric strategy. Opinions, newspa- to this plan, should be producing 6 mi- per articles and television programs ta- llion oil barrels at this point. Almost twi- lking about OPEC, oil and PDVSA have ce as much of what we are producing widely increased in the last few days nowadays. In this type of scenario the before this Summit. And one of these price of the oil barrel would be much days I was watching a Venezuelan oil lower than 10 dollars. Had Venezuela expert, previously a PDVSA senior exe- followed this plan, we would have rea- cutive, talking on a television program, ched a nominal value of one dollar, the wondering only two days ago how it was same price we had one hundred years possible for Venezuela to be producing ago. 3 million oil barrels at this point –they say we are producing below 3 million– We re-launched OPEC. OPEC was re- that Venezuela should be already pro- born and six years later we are here ducing 6 million oil barrels. in this 141st Meeting of Ministers and

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Governors, to continue to adjust our de- Iranian people, and the threats against cisions. The market currently has an ade- Venezuela. Geopolitical factors greatly quate oil supply, as the Organisation’s affect expectations on futures market. president stated. There is no need to Speculation of the so-called futures increase oil production. Some countries markets also impact prices. The lack of of the developed North insist for us to investments for refining and the low pro- increase oil production. It is not neces- cessing and refining capacity is another sary. There is enough oil in the market. cause, as well as the increase of the We even think there is a surplus of oil world’s consumption that will continue in the market. We have to pay attention. in a sustained manner in countries such OPEC became a powerful regulator for as China, India, in Europe, Africa and stability and balance. The price band Latin America. We all need to consume that established a minimum of $22 and a bit more. We need more energy. The a maximum of $28 became history. We world’s population is growing. Entire re- will have to record it in the oil history of gions are emerging from darkness. the beginning of the 21st century. Large oil reservoirs tend to decline. I believe the current floor of the price There are many structural factors that band, if we are going to talk about a affect and trigger prices upwards. price band, should be 50 dollars per barrel. It could evolve in the future. Everything evolves. The ceiling of the price band is infinity. Infinity does not need a ceiling. Let’s put a floor: 50 do- llars. And let’s always look for balance. Let’s always advance towards balance. Now, as our Minister used to say and as our experts know it as well, no one in OPEC looks for the cause for the in- crease of oil prices in OPEC. On the contrary, OPEC continues and will con- Daukoru thanked the welcome tinue to act as a price regulating me- given by the Bolivarian Government, as well as the chanism. But there are other factors that excellent organisation and trigger prices. Geopolitical tensions, for support provided to carry out the example, the aggression against the Conference in Venezuelan territory, one of OPEC’s main foundations. Iraqi people, the threats against the

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Another factor is taxes on the consump- going as low as a turtle and consuming tion of gas and oil by-products charged gas. That is the capitalist craziness. It in Europe and the United States. I would is not sustainable. We have to make a like to make a call to reflection to the call to reflection to the ones that have countries that are large consumers. The imposed that model over the world. It consumer model that wastes energy in has been demonstrated. I am going a torrent, without any type of conscien- to repeat it. I have said it many times ce, without taking into consideration but I will never become tired of saying that we are dealing with non-renewable it because it is about the world assu- natural resources, such as oil, that will ming this topic fully consciously or the be depleted one day. world entering large political, economic and environmental unbalances that will Not very long ago we were in Europe threaten the survival of the human race and I mentioned to the Presidents with in this planet in centuries to come. The whom I shared a discussion table, United States has 5% of the world’s po- some Europeans and others from Latin pulation and consumes almost 25% of America, I mentioned that in Vienna, in the energy produced in the planet –we the streets of Vienna, and it is the same would need seven Earths to sustain this in New York, the same in Washington, life style. Topics for reflection, which are over 90% of the vehicles have only one very adequate in this Summit Meeting passenger: the driver. Individualism is of OPEC. extreme. Each vehicle is almost 3 me- ters long. Vehicles made for six people Here in Venezuela the profile has chan- that take up a space of 3 meters x 2 me- ged. 20 years ago in Caracas, accor- ters. One after another, in an endless line ding to recently published studies, 80% kilometres long. Thousands of vehicles of the users of internal roads, avenues

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and highways were private vehicles (this is important information). Currently, “What is at risk is very important, both for rich and this percentage has decreased from poor countries, and we should take advantage of 80% to 60%. In other words, the use of every opportunity that is given to us to guarantee public transportation in Caracas has in- the oil market will evolve in a way that is consistent with the regular growth of the global creased. And it will continue to increa- economy, sustainable development and poverty se. We will soon open other Metro lines eradication”. in the capital, as well as in the cities of Los Teques, and Valencia. We are building the Caracas-Tuy Medio especially because of the political and train and thousands of kilometres of rai- economic irresponsibility of the gover- lroad tracks, and we are bringing mass nment of the United States. The fiscal transportation busses to renovate the deficit of the United States is the largest existing fleet. one that ever existed in the history of nations. Military expenditure is increa- OPEC continues its walk towards this sing. They issue commercial papers new stage of its existence in an ever- without any collateral. The economy of changing world. OPEC guarantees oil the United States is a real bubble that supply, but OPEC also guarantees its threatens the world, a speculative and peoples a fair price for their oil. 50 do- artificial economy. llars? Fair price as a floor. Resources for social and integral economic deve- Over 30 years ago the United States lopment of our peoples. Furthermore, decided to put aside the gold standard, resources also to cooperate with poorer which was the regulating mechanism countries within our geopolitical milieu. of international currency, and now that they arbitrarily freed themselves from Is OPEC going to increase production? the gold standard without consulting No. OPEC currently considers that pro- with any country of the world, they duction does not need to be increased. started to create a speculative bubble We will have to continue evaluating the that threatens the world economy and different indicators. There are some the stability of the world. If this bubble OPEC countries that are evaluating ta- bursts, the planet will shake. There is no king as a reference the dollar, instead conscience of this in the United States, of the euro, for oil prices and internatio- in the government of the United States. nal commerce. The dollar is weakening, It is an economy that weakens and the dollar loses positions in the world, and I

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open. The day will come to bury it for the benefit of the world and the hope for a world of equals, peace and fair people. A balanced world. This is an important topic for debate.

Another important topic is the incorpo- OPEC delegates expressed their ration of new countries to OPEC. A to- support to the Full Oil Sovereignty pic that has been publicly proposed. policy led by President Chavez’s Countries in Africa and Asia want to Bolivarian Government. become members of OPEC. They could also be Latin American countries that are starting to free themselves from the imperialist yoke. Truly sovereign new go- believe it will continue to lose positions vernments are starting to be born here, against currencies like the euro. governments that are making decisions We hope that one day Latin America will similar to the ones made by OPEC in have a common currency. Yesterday the 60s and 70s to recover control over we remembered in that the the natural resource, control over poli- Ecuadorian currency was called Sucre. cies and strategies. Governments such Sunday June 4 will mark another anni- as the one of Bolivian President Evo versary of the assassination of Marshal Morales, who courageously has deci- Sucre, the famous Liberator Antonio ded to recover control over the hydro- José de Sucre. Can you imagine if the- carbon natural resource. I believe more re were a strong currency in Asia, the Latin American nationalist governments Middle East, Africa and we could shake will continue to arrive, willing to be free. away the dollar dictatorship, which is And why more governments willing to part of the international dictatorship of be free will continue to arrive? Because the United States empire. That empire the Latin American peoples continue will fall this century. I am certain. The to awake and are desirous to be free. tomb of the North American empire is

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Members of PDVSA’s Board of Directors, managers and PDVSA workers attended the inauguration ceremony held in the Simon Bolivar Room in the headquarters of the Ministry for Energy and Petroleum and PDVSA, located in La Campina, Caracas.

And the peoples are the only ones who born 45 years ago. OPEC was put on its make history. The voice of the people knees. OPEC stood up. OPEC will live is the voice of God. When the peoples successfully ever after. Let it be so. I wake up, nothing and no one can avoid formally declare this 141st Assembly of profound changes in societies. And this Ministers and Governors inaugurated. is happening in Latin America. That is Thank you very much. why I say it is impossible to avoid that from happening today, tomorrow or the day after tomorrow, as much as oligar- chies from these countries, as much as the imperialist power tries to avoid it, today, tomorrow or the day after tomo- rrow, governments that decide to take control over their hydrocarbon natural resource will continue to arrive. These governments could be interested in be- coming members of our Organisation of Petroleum Exporting Countries.

I dream of the day when Venezuela will not be alone in Latin America as a mem- ber of OPEC. Let’s not let Venezuela be the only Latin American country mem- ber of OPEC. I dream of that day and I believe it will come sooner than later, as well as for other countries in Asia, Africa and the Middle East. OPEC was

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24 Extraordinary Meeting of the OPEC Ministerial Conference

Speech of His Excellency Edmund Maduabebe Daukoru, President of the OPEC Conference and State Minister for Petroleum Resources of Nigeria

President Chavez’s leadership has promoted the identity of the energy sector

Your Excellencies, Ladies and arrival. I would like to also thank the or- Gentlemen, Welcome to Caracas ganizers of the Conference for all their to this 141st Meeting (Extraordinary) of great efforts. the OPEC Conference. We have gathe- The meeting taking place today is held red here upon the pleasant invitation in the capital city of one of the Founding made by the Bolivarian Government of Members of OPEC, Venezuela, a coun- Venezuela. Let me take this opportunity try that has always proudly participa- to thank, on behalf of Your Excellencies, ted actively and in a key manner in our H.E. Rafael Ramirez, Minister of Energy Organization’s businesses. In the last and Petroleum and head of his dele- years, President Chavez’s leadership gation –and, through him, the govern- has strengthened the Venezuelan oil ment and the people of the Bolivarian industry, and has promoted a stronger Republic of Venezuela– for their gene- sense of collective identity and purpose rous invitation to hold the meeting that beyond the Latin American energy sec- is taking place today, for the excellent tor. Staff from OPEC’s Secretariat holds facilities they have provided us, and for great memories of the two Secretary the warm welcome given to us since our Generals sent by President Chavez to

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Over 130 national and international news agencies covered the 141st Extraordinary Meeting of the Ministerial Conference of OPEC. Over 200 delegates, including ministers, OPEC governors, national representatives and their respective technical teams, attended the Conference.

Vienna in 2001-03 -Dr. Ali Rodriguez mitment established with other causes Araque and Dr. Alvaro Silva Calderon-, that would help improve humanity’s wel- and have entrusted me to transmit their fare, such as sustainable development, personal greetings to such warm and poverty eradication, and environmental respected persons. protection.

Venezuela’s participation in OPEC rea- Before today’s debate begins, I invi- lly began a long time ago, before the te you to join me in the sad task of gi- Organization was created, when this ving our deepest condolences to the nation went to Iran, Iraq, Kuwait and Indonesian government and people Saudi Arabia in 1949 and proposed to for the terrible lost they suffered due to these countries the idea of exchanging the disastrous earthquake that hit that points of view and exploring opportuni- country last week. Our deepest con- ties to achieve more regular and closer dolences to those who lost loved ones communication. Only six years ago, in this tragic natural disaster. We pray when OPEC celebrated its 40th anniver- to the Almighty God that He will give sary, Venezuela was the host country of them courage to endure their loss. May the Second Summit of Heads of State the souls that went away rest in peace, and Government of OPEC Member Amen. Countries, which concluded with a so- Moving on to something more cheerful, I lemn declaration including the reaffir- now ask you to join me in congratulating mation of our Organization’s principles the people of the Republic of Iraq for and objectives, directly related to the the recent inauguration of its new go- stability of the oil market, and the com- vernment, as well as His Excellency Dr.

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Hussein Al-Shahristani, who was named We are not comfortable with those pri- Minister of Petroleum for the Republic of ces because they are not supported by Iraq. Unfortunately, His Excellency Dr. fundamental aspects and they contain Hussein Al Shahristani could not attend the seed for new volatility. Ultimately, this Conference, but we greet him from they will be detrimental to all actors in here and we hope he will attend our the market. Nevertheless, we shall con- next meeting. Our thoughts are with His template the current situation keeping Excellency Dr. Hussein Al Shahristani a broader perspective, and notice that, and his country –another Founding in real terms, prices are still bellow the Member of OPEC– at this time when this levels observed at the beginning of the nation is trying to develop its oil industry 1980s, when the reference basket rea- and emerge as one of the main actors in ched 85 dollars per barrel at today’s the world arena. prices.

Please allow me to take some time to Also, we cannot forget that in the last give a special welcome to a dear colle- four years prices for non-energy basic ague of mine who is attending an OPEC products have largely increased, some- Conference for the first time as chief of times at rates higher than oil prices. For his country’s delegation, His Excellency example, the price of copper increased Dr. Shokri M. Ghanem, President of the 75% between the beginning of this year People’s Committee of the National and mid May. These trends are usually Petroleum Corporation of Libya’s neglected, but they are very important Popular Socialist Arab Jamahiriya. He is when considering the overall global not a stranger to OPEC. He served ho- scenario. As we have already mentio- norably as Director of the Secretariat’s ned several times, market volatility is Research Division in Vienna for eight caused by a combination of factors. years, until 2001. We eagerly wait to Increase in oil demand has been ex- listen to his wise advices and benefit traordinary in the past two years, with from his vast knowledge regarding our growth rates in 2004 not seen since the Organization’s work. Since the time beginning of the 1970s. North America when the Conference last met in Vienna, and developing countries, China in par- in March, oil prices have once again ticular, have been at the center of this break records, with OPEC’s reference remarkable sudden increase, which le- basket amounting to over 65 dollars per veled off to some extent in 2005. Also, barrel, which means its price has do- the expansion rate of supply coming ubled in only two years.

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from non-OPEC countries has decrea- stability. Our Member Countries have sed after a period of solid increase in lately increased production levels over this sector, sometimes at rates higher their 5-year average. And, when possi- than expected. ble, our Member Countries have expe- dited their plans to incorporate new pro- Subsequently, certain stiffness has duction capacity and be able to meet been observed downstream. Refineries ever-growing increase in demand and in three key regions of the world –Asia, reestablish a comfortable idle capacity Europe and the Unites States– have “cushion”. It is not necessary to remind been working at 90% of their capa- you that in September of last year, du- city and beyond for most of the time. ring our 137th Conference, we agreed Moreover, there is a lack of capacity to that, if needed, we would make availa- process the heaviest acid crude, which ble to the market our Member Countries’ causes prices of the sweet, lightest cru- idle capacity of around two million ba- de to decrease, and differences bet- rrels per day. We have not received any ween crude degrees to increase. specific request for that, thus far. Finally, future market activity has increa- OPEC’s upstream capacity is increasing sed, and a new influx of capital move- and should reach 3 mb/d by the end of ments coming from pension and cove- this year, with regards to an average rage funds has taken place. In fact, last expected production of 28.6 mb/d per April NYMEX open interest agreements year, our idle capacity should exceed exceeded the 1-million benchmark for ten per cent, a level proven to be ac- the first time ever. Approximations show ceptable for the market based on past that total assets managed by coverage experience. However, OPEC’s produc- funds are in the 1.5-trillion dollar range. tion policy has ensured that this broad If we add to this equation natural di- production trend and sufficient idle ca- sasters and uncertainties derived from pacity will continue for many years to geopolitical events and other destructi- come to benefit consumers throughout ve occurrences taking place throughout the world. For this purpose, over 100 the planet, we can understand why vo- projects are now being implemented latility is so high nowadays. or planned by Member Countries, and OPEC has responded to the need for they amount to a total of over 11 mb/d more oil as and when necessary, empha- of crude oil and other liquids. sizing, once again, our Organization’s All of this proves, once again, OPEC’s commitment to always achieve market

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commitment to ensure that consumers Your Excellencies, Ladies and receive oil in an orderly, efficient and ti- Gentlemen, this has been our messa- mely way, how and when they need it, ge for a long time and continues to be, both now and in the future, at fair and today, more valid than ever. - for your reasonable prices. Yet, we cannot act attention. on our own in this endeavor. For this rea- son, we gladly welcome any progress made in the past years regarding dia- logue and cooperation among the main actors in the market, mainly through an institution like the International Forum for Energy, which last ministerial mee- ting was held in Doha at the end of April of this year, and provided the opportu- nity to hold formal and informal conver- sations on market topics.

Additionally, the fact that high-level re- presentatives from some leading oil- producing countries that do not belong to OPEC –Angola, Egypt and Syria– are attending this Conference as observers, is consistent with the need for broader understanding among all the parties on the great challenges the market is cu- rrently facing, and the collective willing- ness of meeting them. What is at risk is very important, both for rich and poor countries, and we should take advanta- ge of this opportunity that is being gi- ven to us to guarantee the oil market will evolve in a way that is consistent with the regular growth of the global eco- nomy, sustainable development, and poverty eradication.

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30 Extraordinary Meeting of the OPEC Ministerial Conference

Speech of the People´s Minister of Energy and Petroleum, Rafael Ramírez Carreño, during the Inauguration of the 141st Extraordinary Meeting of the Ministerial Conference of the OPEC

Part of the sovereign reaffirmation is the deep conviction that our reserves should turn into better quality of life for our people

Ladies and Gentlemen: please ne as a milestone in the history of the receive a warm welcome from Organisation; and thirdly because we the people and the government of the are experiencing great changes in this Bolivarian Republic of Venezuela. We context that could have unforeseeable are very happy and proud to host you mid-term consequences. in the 141st Extraordinary Ministerial

Conference of the Organisation of “Part of the sovereign reaffirmation is the deep Petroleum Exporting Countries (OPEC), conviction that our reserves should turn into and we sincerely hope your stay in our better quality of life for our people”. country will be pleasant and productive for everyone. We also believe that the Second Summit We believe that this occasion is an ex- in Caracas served as a platform for the traordinary one in several ways. First of “rebirth” of the sole cooperation and co- all because it will allow us to ratify the hesion purpose during the hard times commitments and agreements of the the Organization was experiencing, and Caracas Declaration issued on OPEC’s that it allowed the recovery of the capa- 2000 Second Summit; secondly be- city to balance the market under the cri- cause some fundamentals of the oil terion of fair prices for our resources. We market show conditions similar to the now hope that the 141st Extraordinary ones present when this Summit was Ministerial Conference will serve as a held, a Summit remembered by everyo- platform to carry out strategic evalua-

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huge “paper” crude volumes negotia- ted in futures markets are new variables that grow alarmingly. A large portion of the current prices is caused by these factors, factors that will not disappear, that we are just starting to understand, and that are almost beyond our control.

The cost of inputs and services has “Venezuela serves as a shockingly increased, and the crude reference regarding the average world basket is increasingly implementation of a very solid being composed by more heavy cru- and successful policy to defend our main resource: oil. This des, thereby increasing processing conviction has a social nature costs. Even worse, driven by nominal and is expressed by how oil levels of “high” prices, dozens of explo- profits are distributed among ration, production and refining projects the population”. that will allow a considerable increa- se in the offer inside and outside our Organisation have been undertaken tions that will allow us to overcome the worldwide, thereby increasing prices obstacles and threats that hover over even more and creating a scarcity of our countries as ghosts. human and material resources never The success our Organization has seen before. We are in the middle of a had in the past six years arises from circle that will have, without a doubt, a the cohesion of a common policy and hard-to-predict outcome. strategy for our countries, swiftness of The next years will define the strength of action, and the technical capacities of the judicial and tax framework, and the our teams. We have performed accor- coordination of public policies among ding to the strategic orientations of our member countries. The use of the word Heads of State, and we have been able ‘public’ carries the implicit message that to successfully defend the principles on we care for the welfare of our peoples. which our Organisation was founded. There is no other possible way when Our current challenges are different, but dealing with a non-renewable natural not easier. Geopolitical tensions, parti- resource on which the lives and future cipation in speculative markets and the of millions of people depend on.

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Part of our sovereign reaffirmation is the Conference that begins today should profound conviction that our reserves constitute a new platform of criteria for should turn into a better quality of live our Organisation, defined by sovereign for our people. In our case, this convic- reaffirmation over the resources, and tion has evolved into productive social the absolute conviction that sovereign development, support to cooperatives, people should receive the benefits of and a change in the way companies the applied strategies that translate distribute their profits among their parti- into better quality of life, thank you very cipants based on the Social Production much. Company model.

We have been successful, I repeat, in stabilizing the market, but there cannot be external stability without internal sta- bility, and I am referring to economic, political and social stability in our coun- tries. This stability is nowadays threate- ned by the shadow of interventionism and State terrorism resulting from the desire of some nations to take over oil reserves by force. Internal social stabi- lity in our nations is an essential requi- rement for integral stability, which inclu- des market and income stability.

Under current conditions we cannot be victims of double standards or be subject to pressures of the media that observes and disseminates only what helps it to convert, with one stroke of the pen, rumours and suppositions into facts. It is sad to be a hero of what one says and victims of what others omit.

Following the best spirit of the foun- ders of our Organisation, we cannot be satisfied with our achievements. The

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OPEC, independence flag for countries in the South