Keeping an eye on everything C o m m e n t a r y Wouldn’t it be great to have an accurate handle on the findings can be viewed in OPEC’s numerous publica- future? Yet even though the human brain is described by tions, including the Monthly Oil Market Report (MOMR), many as a miraculous and magical creation, it is not a the World Oil Outlook (WOO) and the Annual Statistical crystal ball and none of us have 20:20 vision. It means Bulletin (ASB). And on top of this, they also form an in- that we all require the best available information and data tegral part of the Organization’s decision-making proc- to make the most accurate judgments and decisions about ess and underscore that OPEC has, and will continue to any short-, medium-, and long-term futures. monitor global oil markets closely and remain vigilant to This is notably apparent in the oil industry, where data any changing circumstances. and information are the heartbeat of any decision-mak- It all points to the need to be flexible and adaptive ing process. All stakeholders need to take into account over all the various timeframes. From OPEC’s viewpoint, every facet of the industry and this is something OPEC the Organization’s commitment to ensuring order and sta- places much credence on. It’s not about keeping an eye bility in the international oil market, with secure supply, on some things; it’s about keeping an eye on everything. reasonable prices and fair returns to investors, is une- The focus is on maintaining a supply and demand quivocal. Alongside this, a broad, practiced commitment equilibrium. This is what OPEC’s actions, and its ac- from all players in working towards such stability is also tions throughout history, have aimed to achieve. This imperative. balancing act needs to take into account both upstream That is not to say that everyone will agree with every and downstream, including actual crude supply and de- decision made by the various stakeholders. We do not mand, oil inventories, economic growth, current and fu- live in a uniform society and the key term ‘energy secu- ture investments, prices, refining bottlenecks, available rity’ means different things to different people. Yet the spare capacity, speculation on futures exchanges, typical concept is so essential to life in the 21st century. It is im- seasonal differences and the various timeframes. All the portant that as an industry we all appreciate the role en- data and information pieces have to be fitted together ergy plays in the lives of many varied stakeholders: oil like a jigsaw, to elicit the best way forward. Though, as producers and consumers, oil exporters and importers, we have seen in recent years, unforeseen happenings, the people of developed and developing nations, and such as geopolitical events, can play a significant role too. present and future generations. For OPEC, this means utilizing the broad expertise Energy security impacts us all and any decisions of its Secretariat and the inputs from professionals in must take this global outlook into account. The concept OPEC Member Countries, leveraging the feedback from of energy independence is just that, a concept. It bears its Economic Commission Board, and helping develop little relation to the realities on the ground. It is energy various outside fora. The latter includes the Joint Oil Data interdependence that is the guiding light. Initiative (JODI), based at the International Energy Forum At OPEC we recognize the importance of a holistic (IEF) in Riyadh, Saudi Arabia, of which OPEC is extremely view and it is critical that as an industry we push forth proud to have played a significant development role. The inclusiveness and continue to develop and explore ex- initiative has quickly evolved into an internationally-re- isting and new avenues of cooperation with innovative spected initiative focused on advancing the transparen- thinking, collaboration, timely adaptation and swift ac- cy, quality, timeliness and flows of energy market data. tion. Clear, concise and timely information, covering all The analysis and evaluation provide indicators as to the various industry’s components, is the backbone of how the energy landscape may evolve and many of the any decision-making process. Energy Dialogue 4 EU-OPEC Energy Dialogue witnesses ‘significant’ developments EU closer to understanding how OPEC acts — Andris Piebalgs, EU Energy Commissioner (p15) Roundtable on petroleum policies looks at both sides of the energy coin (p18) C o n t e n t s Energy Security 22 Producers, consumers must work together on energy security Interview 26 Former Nigerian Head of State General Yakubu Gowon speaks on his country’s OPEC Membership Climate Change 28 Climate change negotiations: Remembering the original goals ASB 2006 34 cu m Iraq GDP 2005 OPEC Annual Statistical Bulletin 2006: a unique window into the oil industry Publishers Membership and aims OPEC OPEC is a permanent, intergovernmental Organization of the Petroleum Exporting Countries Organization, established in Baghdad, September Obere Donaustrasse 93 10–14, 1960, by IR Iran, Iraq, Kuwait, Saudi Arabia 1020 Vienna, Austria and Venezuela. Its objective is to coordinate and Telephone: +43 1 211 12/0 unify petroleum policies among Member Countries, OPEC bulletin Telefax: +43 1 216 4320 in order to secure fair and stable prices for Public Relations & Information petroleum producers; an efficient, economic and Department fax: +43 1 214 9827 regular supply of petroleum to consuming nations; E-mail: [email protected] and a fair return on capital to those investing in Cover Proudly wearing the colours ... a historic day for the industry. The Organization now comprises 12 Iraq (see pp52–57). Web site: www.opec.org Members: Qatar joined in 1961; Indonesia and SP Photo: Reuters Visit the OPEC Web site for the latest news and infor- Libyan AJ (1962); United Arab Emirates (Abu Dhabi, mation about the Organization and back issues of the 1967); Algeria (1969); Nigeria (1971); and Angola OPEC Bulletin which is also available free of charge (2007). Ecuador joined the Organization in 1973 in PDF format. and suspended its Membership in 1992; Gabon Vol XXXVIII, No 6, July/August 2007, ISSN 0474–6279 Hard copy subscription: $70/year joined in 1975 and left in 1995. Appointments 39 Kuwait Acting Oil Minister Angola National Representative Newsline 40 News update from OPEC Member Countries BP Statistical Review 42 BP: A year in review OPEC Fund News 46 Arts and Life 52 Azerbaijan: Small business sector thrives under oil boom OFID honoured (p50) Iraq celebrates historic victory in Asia’s premier soccer tournament Reuters Vienna’s Donauinselfest (p58) Market Review 62 Noticeboard 74 OPEC Publications 76 The OPEC Bulletin welcomes letters and comments on articles included in the Bulletin, as well as contributions on oil and energy issues in general. Please send your letters to: [email protected] Secretariat officials Contributions Editorial staff Secretary General The OPEC Bulletin welcomes original contributions on Editor-in-Chief Dr Omar Farouk Ibrahim Abdalla Salem El-Badri the technical, financial and environmental aspects Director, Research Division Senior Editorial Co-ordinator of all stages of the energy industry, research reports Ulunma Angela Agoawike Dr Hasan M Qabazard and project descriptions with supporting illustrations Editor Head, Energy Studies Department and photographs. Jerry Haylins Mohamed Hamel Associate Editors Head, PR & Information Department Keith Aylward-Marchant Dr Omar Farouk Ibrahim Editorial policy James Griffin Head, Petroleum Market Analysis Department The OPEC Bulletin is published by the PR & Informa- Production Mohammad Alipour-Jeddi tion Department. The contents do not necessarily Diana Lavnick and Andrea Birnbach Design Senior Legal Counsel reflect the official views of OPEC nor its Member Coun- Dr Ibibia Lucky Worika Elfi Plakolm tries. Names and boundaries on any maps should not Photographs (unless otherwise credited) Head, Data Services Department be regarded as authoritative. No responsibility is tak- Diana Golpashin Fuad Al-Zayer Head, Administration & Human Resources Department en for claims or contents of advertisements. Editorial Alejandro Rodriguez material may be freely reproduced (unless copyright- Head, Office of the Secretary General ed), crediting the OPEC Bulletin as the source. A copy Indexed and abstracted in PAIS International Abdullah Al-Shameri to the Editor would be appreciated. Printed in Austria by Ueberreuter Print and Digimedia EU-OPEC Energy Dialogue witnesses ‘significant’ developments By Jerry Haylins Energy Dialogue OPEC and the European Union (EU) held the 4th ministerial-level meeting of their Energy Dialogue at the OPEC Secretariat in Vienna towards the end of June, marking another year of significant developments towards the establishment of an enhanced and lasting understanding of the two sides’ views on major issues affecting energy supply and demand. OPEC OPEC bulletin 7—8/07 4 EU-OPEC Energy Dialogue witnesses ‘significant’ developments “The energy dialogue has helped strengthen key chan- Above: Dr Chakib Khelil (l), nels of communication across the two groups, and its Alternate President of the OPEC Conference and Minister of Energy accompanying joint roundtables, workshops and stud- and Mines of Algeria, and Abdalla ies provide the facility to take an in-depth look at spe- Salem El Badri (r), Secretary cific topics,” said a joint press release issued after the General of OPEC. one-day meeting. Delegates from the two sides again paid tribute to the progress made under the initiative, a process of cooperation that was only established in December 2004, yet has made considerable inroads in producer- consumer relations. They noted that since their third annual meeting in Brussels, in June 2006, EU and OPEC officials had staged several joint events, including a roundtable on carbon capture and storage, held in Riyadh, Saudi Arabia, in September 2006; a workshop on the impact of finan- cial markets on oil price and volatility, held in Vienna in December 2006; a roundtable on energy policies, held in Brussels in May 2006 (see page 18); the launch of a joint study on refining; and other meetings and dis- cussions.