November 2001 1 Printed in Austria by Ueberreuter Print and Digimedia Publishers Organization of the Petroleum Exporting Countries, Obere Donau- strasse 93, 1020 Vienna, Austria. Telephone: +43 1 211 12/0; Telefax: +43 1 216 4320; Public Relations & Information Department fax: +43 1 214 9827. E-mail: [email protected]E-mail: OPEC News Agency: [email protected]Web site: http://www.opec.org. Hard copy subscription: $70/12 issues. Membership and aims OPEC is a permanent, intergovernmental Or- ganization, established in Baghdad, September 10–14, 1960, by IR Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Its objective is to co- ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an effi- cient, economic and regular supply of petro- leum to consuming nations; and a fair return on capital to those investing in the industry. The Organization comprises the five Founding Members and six other Full Mem- bers: Qatar (joined in 1961); Indonesia (1962); SP Libyan AJ (1962); United Arab Emirates (Abu Dhabi, 1967); Algeria (1969); and Nigeria (1971). Ecuador joined the Organiza- tion in 1973 and left in 1992; Gabon joined in 1975 and left in 1995. Secretariat officials Secretary General Dr Alí Rodríguez Araque Director, Research Division Dr Adnan Shihab-Eldin Head, Energy Studies Department Dr Rezki Lounnas Head, Petroleum Market Analysis Department Javad Yarjani Head, Data Services Department Dr Muhammad A Al Tayyeb Head, PR & Information Department Farouk U Muhammed, mni Head, Administration & Human Resources Department Senussi J Senussi Head, Office of the Secretary General Karin Chacin Legal Officer Dolores Dobarro Web site Visit the OPEC Web site for the latest news and information about the Organization and its Member Countries. The URL is http://www.opec.org This month’s cover ... shows a well head at a gas field in Indonesia, which has just approved a new oil and gas law (see Newsline beginning on page 15). 2 NOTICEBOARD Forthcoming conferences and other events 3 COMMENTARY Strength in unity The attachment of conditionality by OPEC to its latest agreement to cut output by 1.5m b/d will help to promote market stability 4 FORUM Assessing today’s supplies to fuel tomorrow’s growth By Robert Priddle, Executive Director of the IEA 2 7 PRESS RELEASE Statement by Dr Alí Rodríguez Araque, Secretary General, OPEC to the 7 th Conference of the Parties to the UNFCCC 2 8 CONFERENCE NOTES 118 th (Extraordinary) OPEC Conference 15 NEWSLINE Energy stories concerning OPEC and the Third World 26 ENVIRONMENT NOTEBOOK Executive summary of COP6 (Part II) 28 MARKET REVIEW Oil market monitoring report for October 2001 46 MEMBER COUNTRY FOCUS Financial and development news about OPEC Countries 52 OPEC FUND NEWS Recent loans and grants made by the OPEC Fund 63 ADVERTISING RATES How to advertise in this magazine 64 ORDER FORM Publications: subscriptions and single orders 65 OPEC PUBLICATIONS Information available on the Organization Indexed and abstracted in PAIS International Vol XXXII, No 11 ISSN 0474-6279 November 2001
Transcript
November 2001 1
Printed in Austria by Ueberreuter Print and Digimedia
P u b l i s h e r sOrganization of the PetroleumExporting Countries, Obere Donau-strasse 93, 1020 Vienna, Austria.
M e m b e r s h i p a n d a i m sOPEC is a permanent, intergovernmental Or-ganization, established in Baghdad, September10–14, 1960, by IR Iran, Iraq, Kuwait, SaudiArabia and Venezuela. Its objective is to co-ordinate and unify petroleum policies amongMember Countries, in order to secure fair andstable prices for petroleum producers; an effi-cient, economic and regular supply of petro-leum to consuming nations; and a fair returnon capital to those investing in the industry.
The Organization comprises the fiveFounding Members and six other Full Mem-bers: Qatar (joined in 1961); Indonesia (1962);SP Libyan AJ (1962); United Arab Emirates(Abu Dhabi, 1967); Algeria (1969); andNigeria (1971). Ecuador joined the Organiza-tion in 1973 and left in 1992; Gabon joined in1975 and left in 1995.
S e c r e t a r i a t o f f i c i a l sSecretary General Dr Alí Rodríguez Araque
Director,Research Division Dr Adnan Shihab-Eldin
Head,Energy Studies Department Dr Rezki Lounnas
Head, Petroleum MarketAnalysis Department Javad Yarjani
Head, Data ServicesDepartment Dr Muhammad A Al Tayyeb
Head, PR & InformationDepartment Farouk U Muhammed, mni
Head, Administration &Human Resources Department Senussi J Senussi
Head, Office of theSecretary General Karin Chacin
Legal Officer Dolores Dobarro
W e b s i t eVisit the OPEC Web site for the latest news andinformation about the Organization and itsMember Countries. The URL is
http://www.opec.org
T h i s m o n t h ’ s c o v e r . . .shows a well head at a gas field in Indonesia, which hasjust approved a new oil and gas law (see Newslinebeginning on page 15).
2 N O T I C E B O A R DForthcoming conferences and other events
3 C O M M E N T A R YStrength in unityThe attachment of conditionality by OPEC to its latest agreementto cut output by 1.5m b/d will help to promote market stability
4 F O R U MAssessing today’s supplies to fuel tomorrow’s growthBy Robert Priddle, Executive Director of the IEA
27 P R E S S R E L E A S EStatement by Dr Alí Rodríguez Araque, Secretary General, OPECto the 7th Conference of the Parties to the UNFCCC
28 C O N F E R E N C E N O T E S118th (Extraordinary) OPEC Conference
15 N E W S L I N EEnergy stories concerning OPEC and the Third World
26 E N V I R O N M E N T N O T E B O O KExecutive summary of COP6 (Part II)
28 M A R K E T R E V I E WOil market monitoring report for October 2001
46 M E M B E R C O U N T R Y F O C U SFinancial and development news about OPEC Countries
52 O P E C F U N D N E W SRecent loans and grants made by the OPEC Fund
63 A D V E R T I S I N G R A T E SHow to advertise in this magazine
64 O R D E R F O R MPublications: subscriptions and single orders
65 O P E C P U B L I C A T I O N SInformation available on the Organization
Indexed and abstracted in PAIS International
Vol XXXII, No 11 ISSN 0474-6279 November 2001
2 OPEC Bulletin
N O T I C E B O A R D
Venezuela appoints Dr Gloria MirtHernández as new OPEC Governor
Venezuela hasappointed DrGloria MirtH e r n á n d e z(pictured) as thecountry’s newGovernor forOPEC. Aneconomist witha Masters De-gree in Interna-tional Businessin the USA, DrMirt joined the
Venezuelan Ministry of Energy and Mines in1970, and on receiving her degree in 1973,was transferred to the Department of OilEconomics.
In 1988 she was appointed Director ofHydrocarbon Economics at the Ministry, andalso became Venezuela’s National Representa-tive to OPEC’s Economic Commission Board.She became the country’s OPEC Governor inNovember 2001, when she was also pro-moted to the post of Director General ofHydrocarbons.
She has been part of the VenezuelanDelegation to OPEC Conferences and othermeetings since 1982, and is also a member ofvarious professional societies in Venezuela,including the Chamber of Economists, theFederation of Economists and the Associa-tion of Oil and Petrochemical Economists.
She has one son who is 23 years old, andlists reading and travelling as her main hobbies.
Forthcoming events
London, UK, February 11–12, 2002, E&PData & Information Management. Details:Smi Conferences Ltd, 1, New ConcordiaWharf, Mill Street, London, SE1 2BB, UK.Tel: +44 (0)870 9090 711; fax: +44 (0)8709090 712; e-mail: [email protected]; Web site: www.smi-online.co.uk/data1.asp.
Cape Town, South Africa, February 12–14,2002, INADABA 2002, Investing in AfricanMining Conference. Details: International In-vestment Conferences, Inc, 6310 SunsetDrive, Miami, FL, USA 33143-4823. Tel: +1305 669 1963 or +1 800 282 7469; fax: +1305 669 7350; e-mail: [email protected];Web site: www.iiconf.com.
London, UK, February 13–14, 2002, ChemSystems’ Annual European Chemicals and Pe-troleum Seminar on Restructuring and Recov-ery. Details: Nexant Ltd, Griffin House, 1stFloor South, 161 Hammersmith Road, Lon-don W6 8BS, UK. Tel: +44 (0)20 7950 1600;fax: +44 (0)20 7950 1550; e-mail:[email protected]; www.nexant.com.
Tehran, IR IranFebruary 16–18, 2002
15th Annual APS Conference:Middle East Energy Strategies
London, UK, February 13–15, 2002, Train-ing course on Financial Performance Manage-ment in the Oil Business. Details: The Instituteof Petroleum, 61 New Cavendish Street, Lon-don, W1G 7AR, UK. Tel: +44 (0)20 74677100l; fax: +44(0)20 7255 1472; e-mail:[email protected]; Web site:www.petroleum.co.uk.
Houston, Tx, USA, February 18–22, 2002,Training course on Drilling Practices I. Details:GSM Training Services, Inc, PO Box 50790,Amarillo, Tx 79159-0790, USA. Tel: +1 806358 6894; fax: +1 806 358 6800; e-mail:[email protected]; Web site: www.gsm-inc.com.
Amsterdam, The Netherlands, February 19–21, 2002, Effective Trading and Risk Strategiesfor the Online Energy Market and EmissionsTrading Europe 2002: Profitable EmissionsStrategies for a Sustainable Future. Details:Eyeforenergy, 3rd Floor, Black Lion House,45 Whitechapel Road, London E1 1DU,UK. Tel: +44 (0)20 7375 7575; fax: +44(0)20 73757576; e-mail: [email protected]; www.eyeforenergy.com.
Houston, Tx, USA, February 25–March 1,2002, Training course on Drilling Practices II.Details: GSM Training Services, Inc, PO Box50790, Amarillo, Tx 79159-0790, USA. Tel:+1 806 358 6894; fax: +1 806 358 6800; e-mail: [email protected]; Web site: www.gsm-inc.com.
Cambridge, UK, February 25–March 1,2002, Training course on Price Risk Manage-ment in the Traded Gas and Electricity Mar-kets. Details: Kate Wright, Alphatania,EconoMatters Ltd, Rodwell House, 100 Mid-dlesex Street, London E1 7HD, UK. Tel: +44(0)207 650 1430/1402; fax: +44 (0)20 76501431/1401; e-mail: [email protected];Web site: www.alphatania.com.
Houston, Tx, USA, March 4–8, 2002, Train-ing course on Horizontal & Directional Drill-ing. Details: GSM Training Services, Inc, POBox 50790, Amarillo, Tx 79159-0790, USA.Tel: +1 806 358 6894; fax: +1 806 358 6800;e-mail: [email protected]; Web site: www.gsm-inc.com.
November 2001 3
C O M M E N T A R Y
Strength in unityThe attachment of conditionality by OPEC to its latest agreementto cut output by 1.5m b/d will help to promote market stability
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Names and boundaries on any maps should not
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E d i t o r i a l s t a f fEditor-in-Chief Farouk U Muhammed, mni
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OPEC’s eternal quest — the searchfor oil market stability — is not,and will never be, an easy one.
There are so many different factors whichcan influence markets — the state of theglobal economy, variations in supply anddemand, crude and product stock levels,refinery and pipeline problems, the actionsof speculators, unexpected weather patternsand many more — that sometimes, anyattempt to bring order to something that,by its very nature, is subject to all mannerof fluctuations, can seem a task of Her-culean proportions. Nevertheless, this taskis precisely what the Organization attemptsto do: to stabilize the oil market at reason-able price levels, not just for the benefit ofall oil-producing nations (whether or notthey are Members of OPEC), but for con-sumers around the world, as well as forinvestors in the industry.
The mechanism which the Organiza-tion employs in its efforts to stabilize pricesis a simple one: to increase or decrease theoutput of its Member Countries and thusstrike a balance between supply and de-mand. OPEC believes that if market fun-damentals are in order, then thedestabilizing effect of other extraneous fac-tors on prices (some of which are listedabove) can be minimized, if not eliminatedentirely. Nevertheless, as OPEC itself hasacknowledged on numerous occasions, nosystem can ever be perfect, and the currentone is no exception.
Indeed, in recent months, one such flawhad become increasingly apparent: if thereis an excess of supply over demand, and oilprices begin to slide, the Organization seeksto restore stability by cutting output. Butwhat if — as has often happened in the past— non-OPEC nations, seeing that OPEChas cut production, rush to increase theirown output? The Organization’s Memberswould then be hit by a double whammy:firstly, the sought-after market stabilizationwould not be achieved, because the extranon-OPEC oil perpetuates the supply/de-mand imbalance, and secondly, the OPECnations, having cut their output, would
end up with a lower market share and hencelower revenues. The end result would bethat the OPEC Members, having acted forthe benefit of everyone, would only end upsuffering economically themselves.
This, essentially, was the situation fac-ing OPEC at its 118th Conference in No-vember: with a world economy which wasshowing signs of weakness even before theterrible events of September 11, oil priceshad already begun to fall and there was adanger of them going into freefall. Thus,OPEC was confronted by a critical situa-tion: a possible repeat of the price collapseof 1998-99 was on the cards if swift, deci-sive action was not taken. However, havingalready cut output by 3.5 million barrels/day in 2001, the Organization could notafford to continue with a strategy that hadnot borne fruit: to cut unilaterally, only tosee non-OPEC boost output.
Happily, there exists a concrete solutionto this dilemma: practical and effectiveOPEC/non-OPEC co-operation. Thus, atits 118th Conference in Vienna in Novem-ber, OPEC chose a course of action that ithad never before decided upon: to attachconditionality to its decision to cut output.The Organization agreed to reduce produc-tion by another 1.5m b/d, but only on thecondition that non-OPEC nations also con-tributed 500,000 b/d of cuts. OPEC hasoften made the point that it cannot stabilizethe market alone, and when circumstancesare extreme, the need for co-operation be-tween all parties becomes even more vital.
It is as yet still too early to say what theeffect of this latest OPEC decision will beon the market. However, with cuts pledgedfrom five nations: Angola, Mexico, Nor-way, Oman and Russia, the signs so far areextremely promising that genuine co-op-eration will be forthcoming. Only when alloil producers stand together can they realizetheir true potential. In the coming months,with the world economy facing a roughride, that strength in unity is likely to betested to the utmost. But we are confidentthat together, OPEC and non-OPEC willpass the test.
4 OPEC Bulletin
F O R U MF O R U M
Assessing today’s supplies to fuel tomorrow’sgrowth.*
Findings of the supply bookThe surge in energy prices during 2000
and most of 2001 has drawn attentiononce again to the availability and securityof energy resources. Assessing today’s sup-plies to fuel tomorrow’s growth is the mostdetailed analysis of energy-supply issuescurrently available anywhere. The studyidentifies and analyses the factors that willdetermine global energy production andsupply in the medium to long term. Thesefactors include the costs of developing re-sources and taking them to market, energyprices and government policies, especiallypolicies aimed at countering unwantedclimate change.
Until very recently it would have been hardto imagine an article by the Executive
Director of the International Energy Agency,Robert Priddle, appearing in the OPECBulletin. The publication of this article is
indicative of the new era of dialoguebetween producers and consumers.
* World Energy Outlook, 2001 Insights: As-sessing today’s supplies to fuel tomorrow’sgrowth (2001). International Energy Agency,Paris:OECD. Orders may be directed towww.iea.org/books.
OPEC producers hold nearly two-thirds of the world’s oil reserves.The International Energy Agency
(IEA) represents the major oil consumingnations. In the past, the relationship be-tween the two organizations has been con-frontational. Today, producers andconsumers openly communicate and shareinformation in a variety of ways. For ex-ample, the OPEC Secretariat providedvaluable oil supply information for theIEA’s World Energy Outlook, 2001 Insights:
The world has abundant reserves ofenergy. The supply study demonstratesthat proven reserves are adequate to meetdemand until 2020 and beyond. Figure 1illustrates one of the key findings of WEO:2001 Insights that more than 95 per centof the increase in energy production overthe next two decades will occur in coun-tries outside the OECD. The Middle Eastand the transition economies togetherwill account for 50 per cent of the in-crease. Securing investment to finance theprojected production increases present amajor challenge. This is particularly thecase for Middle East oil producers, whohave the resources to meet expected de-mand but who face stiff constraints inmobilising capital.
are also key factors in the global supplyoutlook. Natural gas supply costs are likelyto increase as near-to-market reserves aredepleted. Significant infrastructure addi-tions will be needed to bring distant gas tomarket and to burn coal more cleanly. Thecost of renewable energy sources must fallso that they can compete with fossil fuels.The development and deployment of newtechnologies will be crucial to moderatingsupply costs in the future.
Oil market supply outlookOil will retain its position as the single
largest source of primary energy overthe next two decades. In 2020, oil demandof 115 million barrels/day will repre-sent 40 per cent of the world’s energymix. Most of the expected growth willcome in the transport sector, where thepotential for replacing oil with other fuelsis very limited. International oil trade isexpected to double and consumers’ de-pendence on the Middle East will con-tinue to grow.
But, while global proven reserves of oilare ample, supply is not guaranteed. Pro-duction in ageing oil reservoirs is declin-ing. New capacity must be built andexploited to offset expected productiondeclines and to meet expected demandgrowth.
OPEC Member Countries hold some63 per cent of the world’s oil reserves. Over50 per cent is concentrated in the MiddleEast OPEC Member Countries. Russiaholds a further 14 per cent of world re-serves and OECD countries some 8 percent. OPEC’s share in global oil produc-tion will rise from 40 per cent today to 54per cent in 2020.
The major Middle East oil producershave an opportunity and a challenge toexploit their low-cost resources, but theirability to mobilise capital is uncertain.Their production and investment planswill be closely linked to their pricing poli-cies, and they will need to attract foreigninvestors where domestic sources of capi-tal are inadequate.
WEO: 2001 Insights analyses theimpact of oil prices on OPEC oil revenuesusing high- and low-price scenarios.The results of these scenarios, shown inFigure 2, were compared with the WorldEnergy Outlook 2000 reference scenario.The analysis suggests that neither very high
Figure 1: Increase in total world energy production
5,000
4,000
3,000
2,000
1,000
01980-2000 2000-2020
million toe
OECD non-OECD
nor very low oil prices would improvecumulative revenues for the major pro-ducers over what they would earn underthe moderate-price conditions envisagedin the reference scenario.
While a higher price may be profitablefor exporters in the short-term, it wouldyield lower revenues in the longer term. In
2020, OPEC’s annual revenues in thehigh price scenario would be about $110billion less than in the reference case, as theloss in production over the long termwould not be compensated by the highprice.
Importance of investmentFuture oil prices and production costs
will be critical factors in attracting timelyinvestment in new capacity. Advances intechnology now allow production fromnew reservoirs to peak higher and earlier,thereby improving investment returns. Butthis trend also leads to faster rates of de-cline. The average size of newly-discov-ered fields is declining, and giant fields arebeing discovered less frequently, so it isbecoming more difficult to replace re-serves.
61m b/d. The investment required to de-velop this production capacity in majorMiddle East OPEC Member Countrieswould be over $300bn in today’s money,at a cost of $5bn per 1m b/d. The averageinvestment required to add productioncapacity in non-OPEC countries is esti-mated to be four times higher.
Worldwide finding and developmentcosts per barrel of oil equivalent have de-clined sharply over the past twenty years.Advances in the development and deploy-ment of technology, including improvedgeophysical and geological interpretation,have also contributed to an increased suc-cess rate in drilling and a reduction in thetotal number of dry holes. The greatestnear-term potential for reducing supplycosts lies in technologies which aid in theidentification of reservoir characteristics,
The impact of declining productionon investment in new reserves is one of thekey findings of WEO: 2001 Insights. Anatural decline rate of only five per cent isassumed in Figure 3. Using this rate anddemand growth of 1.9 per cent per year,the additional production capacity thatneeds to be brought on stream by 2010 is
6 OPEC Bulletin
F O R U M
such as improved seismic techniques, andnew developments in drilling and produc-tion engineering.
Hundreds of billions of dollars of newinvestment will be required to produce theabundant oil of the Middle East. Hugesums will also be needed to develop oilresources in the former Soviet Union. Butforeign investment will be forthcomingonly if oil prices guarantee investors a fairreturn and if the business climate in host
countries is hospitable. The same is truefor the development of the vast reserves of‘unconventional oil’ resources in Ven-ezuela, Canada and elsewhere.
The real worldFinancing the development of energy
infrastructure will require major capitalinflows from industrialised countries.Growing international trade in energy,especially fossil fuels, will increase the in-terdependence of producing and consum-ing countries. Governments will play a keyrole in dealing with supply security, increating appropriate regulatory and mar-ket frameworks and in encouraging tech-nology development and deployment.Energy prices will play another major rolein determining the timing and the amountof investment that goes into expandingenergy supply capacity.
Figure 3: Impact of decline rate on investment
120
2010
m b/d
100
80
60
40
20
02008200620042002200019981996
cumulative new production required
natural production decline
global production
Figure 2: OPEC annual oil revenues
700
600
500
400
300
200
100
0
billion $
low price reference scenario high price
‘Growinginternationaltrade in energy,especially fossilfuels, willincrease theinterdependenceof producing andconsumingcountries.’
P R E S S R E L E A S E
November 2001 7
No 22/2001Marrakech, Morocco, November 8, 2001
Mr President, Excellencies, Ladies andGentlemen,
On behalf of OPEC’s Member Coun-tries, I should like to extend my sinceregratitude to the Government and peopleof Morocco for hosting the Seventh Ses-sion of the Conference of the Parties(COP7) in this splendid and historic cityof Marrakech.
Just over a year ago, on the occasion ofour 40th anniversary, the Second Summitof OPEC Heads of State and Governmentwas held in Caracas, Venezuela. The Sum-mit’s central theme was, quite understand-ably, oil and its role in meeting the projectedrising levels of world energy demand in theearly decades of the 21st century, therebylaying the basis for long-term sustainabledevelopment. The assembled leaders alsoexamined broader issues. In the conclud-ing Solemn Declaration, OPEC firmlyembraced the universal concern for thewell-being of the global environment anddeclared its continued readiness to partici-pate constructively in the climate changenegotiations, so as to ensure a balancedand comprehensive outcome. We specifi-
cally urged Annex I countries to minimisethe adverse social and economic impacts oftheir response measures on nations, whoseeconomies are highly dependent on theproduction and export of fossil fuels. Thisis a serious and genuine concern for oil-producing developing countries, whichneeds to be addressed clearly as this Con-ference reaches its conclusion.
The reconvened COP6 (6th Confer-ence of the Parties) in Bonn in July sawfinal agreement reached by many coun-tries on the implementation of the KyotoProtocol which increased the likelihood ofits ratification. The implementation costfor oil-producing developing countries ofthis agreement would still be vast. Notonly could this have serious and unjusteconomic, social and political repercus-sions for some of these countries, but itwould also go against the spirit of theFramework Convention. So it is essentialthat adequate arrangements are made, asan integral part of the negotiations, toaddress these concerns.
It was encouraging, therefore, to seethat the Bonn Agreement included theestablishment of a Special Climate ChangeFund, to assist with the diversification ofeconomies in countries which may sufferfrom the adverse effects of mitigation meas-
ures. However, we are concerned by thefact that this agreement failed to establishthe size of this fund or the strength ofcommitment to it. The outcome of thisConference, therefore, must include clearlanguage with regard to this commitment.
In addition, in seeking to minimise thecost of mitigation measures, the instru-ment of taxation is often seen as a key toolto be used for environmental objectives.But the track record in many consumingcountries is so far poor, with oil productsoften taxed at levels that have probablyalready reached a pain threshold. And,while oil is taxed so heavily, other fuels aretaxed at far lower levels and are sometimeseven subsidised. The time is ripe to recon-sider the entire philosophy of energy taxa-tion, by restructuring fiscal systems toaddress broader concerns than the finan-cial needs of governments, and to ensureconsistency with international trade rules.
Let me close by stressing to you that theclimate change negotiations over the pastdecade have obliged us to address a globalconcern in a balanced and equitable man-ner. At the same time, as we all recognisethat the world is facing so many complexproblems, we should not forget that thebiggest environmental tragedy confront-ing us is poverty.
Statement by HE Dr Alí Rodríguez AraqueSecretary General, OPEC
to the High-level Segment of the7th Conference of the Parties to the
UN Framework Convention on Climate Change
Marrakech, Morocco, October 29–November 9, 2001
P R E S S R E L E A S E
8 OPEC Bulletin
C O N F E R E N C E N O T E SC O N F E R E N C E N O T E S
118th Conference decides to reduce outputby 1.5m b/d subject to
production cuts from non-OPEC
No 23/2001Vienna, Austria, November 14, 2001
Opening address to the118th Extraordinary Meeting of the
OPEC Conference byHE Dr Chakib Khelil
President of the Conference andMinister of Energy and Mines, Algeria
Welcome to the 118th Meeting of theOPEC Conference.
It is with much sadness that I mustbegin this address with an expression ofthe deepest condolences from OPEC tothe people of Algeria — my own country— for the terrible loss they have suffered inthe worst flash floods to hit the country fornearly 40 years. Well over 500 people havebeen killed and tens of thousands lefthomeless in the capital city, Algiers, partsof which now lie devastated under a thicklayer of mud and grime. At the same time,however, on behalf of Algeria, I should liketo thank all those countries and interna-tional agencies that have promised to pro-vide swift humanitarian aid, in our time ofneed.
Let us now turn our attention to thisMeeting. The specific purpose of this Ex-traordinary Meeting is to review the cur-rent state of the international oil marketand to decide, according to our observa-tions, on the type of action that may berequired by oil-producing nations toachieve order and stability in the monthsahead. At our last Conference, on Septem-ber 26–27, we decided to leave OPEC’sexisting output levels unchanged, with atotal ceiling of 23.2 million barrels/day,
excluding Iraq. We did this at a time whenthe deteriorating global economic out-look, exacerbated by the tragic events ofSeptember 11 in the USA, was expected tohave a dampening effect on world oildemand. Our decision once again demon-strated OPEC’s commitment to itslongstanding role as a responsive and re-sponsible member of the world commu-nity, by saving the global economyhundreds of billions of US dollars as aresult of the Organization’s determinationto ensure stability in the international oilmarket. It also showed that, if OPEC did
not exist, the world would have had tocreate it, in order to bring about thismuch-needed stability.
As you may recall, the price of OPEC’sspot Reference Basket, at our last Meeting,had just fallen heavily to little more than$20/b, after averaging around $25/b dur-ing the first three quarters of this year.Since then, it has been fluctuating in arange of around $17.5–20.5/b, well belowour price band level of $22–28/b and ourtarget price of $25/b, which lies in themiddle of that range. The current situa-tion is especially discouraging to those
OPEC Secretary General, HE Dr Alí Rodríguez Araque (r), and the Chairman of the Boardof Governors, HE Abdulla H Salatt of Qatar (l), applaud the opening address by Algeria’sMinister of Energy & Mines and President of the Conference, HE Dr Chakib Khelil (c).
November 2001 9
C O N F E R E N C E N O T E S
producers — OPEC and non-OPEC —who have worked so hard in recent years toachieve stability in the market, with pricesthat constitute what has been widely re-garded as a reasonable balance betweenthe needs of producers and consumers.Much of the credit for that success must goto the efforts of OPEC, which has sacri-
The Ministers line up for a group photograph.
Saudi Arabia’s Minister of Petroleum andMineral Resources, HE Ali I Naimi (r), inconversation with Iran’s Minister of Petro-leum, HE Bijan Namdar Zangeneh.
ficed 3.5m b/d of its production this year,together with the resulting revenue, partlyto the benefit of non-OPEC producers.
As we set about our deliberations attoday’s Meeting, there is underlying con-cern about the near-term prospects for theoil market. The events of 1997–98 are stillfresh in our minds and recall the dangers of
letting matters get out of hand throughfailure to act soon enough and in theappropriate manner. In our deliberationsat this Conference, we will, therefore, befaced with a threefold task.
First, we will seek to ascertain the bestmeasures to adopt in the face of the globaleconomic downturn, with its depressing
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effect on the oil market, which, as thewinter months approach, is already ina state of over-supply with high stocklevels. At the same time, we are con-scious of the need to avoid adoptingany measures that will add to the cur-rent weakness facing many developedeconomies or impede the economicdevelopment of the long-sufferingpoorer nations. Let me say at thispoint, however, that the longer-termoutlook is more favourable, with up-turns already being forecast for lead-ing sectors of the global economy inthe second half of 2002, notably theUSA, Japan and Europe. Therefore,we must ensure that any actions wetake now will be consistent with theprovision of a viable and stable oilmarket, which will be essential forwhen the economic upturns manifestthemselves.
Secondly, we will endeavour tobuild upon the considerable progressthat has been made in the interna-tional oil market over the past coupleof years through the commitment andthe resolution of responsible produc-ers and other principal players. Thefact that the recent sustained period oforder and stability was underpinnedby the establishment and successfuloperation of a transparent, realisticand widely accepted pricing mecha-nism will be uppermost in our minds.It is important, however, that, duringthis period of tightness in the market,we strengthen our resolve to stick tothe letter of our agreements and ensurethat our production policies are instrict accordance with them. Our cred-ibility is only as good as the continua-tion of the effort among our MemberCountries to maintain cohesion, soli-darity and co-operation.
Also, we look forward to the con-tinued co-operation of fellow oil pro-ducers from outside our Organization,whose support for our agreements havedone so much to ensure their successin recent years. Non-OPEC producersand the governments of consumingcountries have a clear role to play in theprocess of achieving and maintaininga healthy global oil sector; this will, inturn, provide a sound base for worldeconomic growth. These governments
Venezuela’s Minister of Energy and Mines, HE Alvaro Silva Calderón (r) is seen here with thecountry’s new Governor for OPEC, Dr Gloria Mirt Hernández.
Kuwait’s Minister of Oil, HE Dr Adel K Al-Sabeeh, talks to the press.
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could help their domestic economiesby reviewing the excessive levels oftaxation they impose on oil products,thereby allowing consumers to moreproductively allocate their own re-sources and enhance economic growth.
The final part of our threefold taskis to ensure that any decision emanat-ing from the Meeting will be sensitiveto the feelings of peace-loving, virtu-ous members of the world commu-nity, whose principal concern at thepresent time is — understandably —greater international understandingand the cessation of hostilities. Theimportance of this was brought hometo us immediately after our last Meet-ing of the Conference, at the two-dayenergy seminar we held in Vienna.The general message that emerged fromthe eminent group of energy expertsgathered there was that oil supply ispart of a much grander matrix affect-ing mankind as a whole — sustainabledevelopment.
During the present period of inter-national conflict, despite all the fears,the stresses and the distractions thatthis involves, we must never lose sightof the fact that sound, secure energysupply is a vital ingredient in the proc-ess of developing the economies of thepoorer nations of the world. Securityof supply must, in turn, be matched bysecurity of demand. When the presentcrisis is over — soon, hopefully — it isup to the richer nations of the world torestore the issue of sustainable devel-opment to its proper place at the topof the international agenda, in a unitedeffort to eradicate poverty and hard-ship in developing nations and stimu-late their economies. OPEC willcontinue to play a progressive role insuch an environment, with the OPECFund for International Development,in particular, being an importantsource of assistance to the poorer de-veloping countries.
Finally, as you already know, thisis likely to be the final Meeting ofthe Conference during which I ambestowed with the honour of beingPresident. I have found this to be achallenging and stimulating assign-ment, from which I have learned manyvaluable lessons during the course of
Iraq’s Minister of Oil, HE Dr Amer Mohammed Rasheed (r) answers journalists’ questions,watched by the country’s OPEC Governor, Dr Mussab H Al-Dujayli (c).
Qatar’s Minister of Energy and Industry, HE Abdullah bin Hamad Al Attiyah (r), talks toLibya’s Secretary of the People’s Committee of the NOC, HE Dr Abdulhafid Mahmoud Zlitni.
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Indonesia’s Minister of Energy and Mineral Resources, HE Dr Purnomo Yusgiantoro, ponders another enquiry.
OPEC Secretary General, HE Dr Alí Rodríguez Araque (l), is surrounded by journalists and TV cameramen.
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the year. OPEC communicates andanticipates situations better, undertakesmore coherent and coordinated discourseand engages in more open and construc-tive dialogue with non-OPEC producersand consumers. Overall, the Organiza-tion has become a force to be reckonedwith, in the crucial area of oil marketstability, and this is highly beneficial for aglobalised economy, where sustainabledevelopment is taking on more and moreimportance.
Throughout this year, I have endeav-oured to serve OPEC to the best of myability in this post; as a result, I hope thatthis has helped the Organization moveforward as it settles into the 21st century.I should like to thank the many generous,committed and accomplished individualsand groups who have assisted me in carry-ing out my duties. My successor, HE DrRilwanu Lukman, is already well-knownto you and has unparalleled experience inthe senior hierarchy of our Organization,having previously served with distinctionfor many years as both President andSecretary General. I am sure you will alljoin me in wishing him every successwhen he takes up the post of Presidentagain in the New Year.
The United Arab Emirates’ Minister of Petroleum and MineralResources, HE Obaid bin Saif Al-Nasseri (l) listens to Nigeria’sPresidential Advisor on Petroleum and Energy, HE Dr RilwanuLukman.
The Secretary General gives an interview to selected journalists.
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No 24/2001Vienna, Austria, November 14, 2001
118th (Extraordinary)Meeting of the OPEC Conference
Vienna, Austria, November 14, 2001
The 118th (Extraordinary) Meeting of theConference of the Organization of thePetroleum Exporting Countries (OPEC)convened in Vienna, Austria, on Novem-ber 14, 2001, under the Chairmanship ofits President, HE Dr Chakib Khelil, Min-ister of Energy & Mines of Algeria andHead of its Delegation.
The Conference extended its deepestcondolences to the Government and peo-ple of Algeria for the terrible loss they havesuffered in the worst flash floods to hit thecountry for nearly forty years, killing wellover 500 persons and leaving tens of thou-sands homeless in the capital city, Algiers.
Having reviewed the oil market situa-tion and supply/demand expectations forthe forthcoming period, and recalling thefact that the Organization has been shoul-dering the full burden of maintaining oilmarket stability, the Conference notedthat the impact of the current global eco-nomic slowdown on the oil market re-quires firm and concrete co-operation
between OPEC and non-OPEC oil pro-ducing countries in the form of equitablesharing in further reductions, as was thecase in 1999.
The Conference further noted that, asa result of the global economic slowdownand the aftermath of the tragic events ofSeptember 11, 2001, in order to achieve abalance in the oil market, it will be neces-sary to reduce the supply from all oilproducers by a further 2.0m b/d, bringingthe total reduction in oil supply to 5.5mb/d from the levels of January 2001, in-cluding the 3.5m b/d reduction alreadyeffected by OPEC this year. In this con-nection, and reiterating its call on other oilexporters to co-operate so as to minimizeprice volatility and ensure market stability,the Conference decided to reduce an addi-tional volume of 1.5m b/d, effective Janu-ary 1, 2002, subject to a firm commitmentfrom non-OPEC oil producers to cut theirproduction by a volume of 500,000 b/dsimultaneously.
Re-emphasizing the importance of se-curing effective co-operation from non-OPEC oil producing countries to preservemarket stability, the Conference welcomedthe positive responses expressed by somenon-OPEC producers, especially Mexicoand Oman, to co-operate in balancing the
market, and decided that contacts withnon-OPEC producing countries continue.The Conference also expressed its satisfac-tion at the outcome of the senior ExpertsWorking Group of OPEC and invitednon-OPEC producers, held on October29, 2001. The Conference further agreedon future similar meetings being held pe-riodically.
The Conference confirmed the date ofMarch 12, 2002, for its next (Ordinary)Meeting.
Finally, the Conference expressed itsappreciation to the Government of theFederal Republic of Austria and the au-thorities of the City of Vienna for theirwarm hospitality and the excellent arrange-ments made for the Meeting.
The Head of OPEC’s PR & InformationDepartment, Farouk U Muhammed mni(second l) reads the final communiqué.Watching him are HE Dr Rodríguez (sec-ond r); HE Dr Khelil (c); the Director ofResearch Division, Dr Adnan Shihab-Eldin(l); and the Head of the SG’s Office, KarinChacin (r).
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N E W S L I N E f r o m t h e O P E C N A N e w s D e s k
akarta — The Indonesian Houseof Representatives passed the govern-
ment’s new oil and gas law in Octo-ber, preparing the way for the full liberali-zation of the domestic energy sector andending the monopoly of the state oil cor-poration, Pertamina.
The new law effectively endsPertamina’s regulatory and contract-approval roles, as well as its managementof foreign oil and gas contracts.
The government plans to set up a newexecutive body to manage Pertamina’sactivities, as well as a separate entity tooversee domestic fuel supplies and distri-bution.
The two bodies were expected to beset up within a year, while Pertaminawould be turned into a limited liabilitycompany in two years’ time.
However, Pertamina would continueto supply fuel in the domestic market forfour years, as part of a transition period toderegulate the downstream markets.
The new law provides for other typesof contractual schemes with investors, aslong as they are beneficial to the countryand maintain the present production con-tract system. It also allows contractors tochoose to pay taxes based on existing rules,or to apply the tax policy in force whenthey signed respective agreements, accord-ing to local media reports.
Just prior to the passing of the newlaw, legislator Emir Luis, who is also amember of the special team set up todebate the bill, was quoted by the JakartaPost newspaper as saying that the Housewas determined to pass it.
This was despite criticism from vari-ous parties, including the Consultative Fo-rum of Oil-Producing Regencies and someexecutives of foreign oil and gas compa-nies. Earlier, the Forum had threatened toblock the passage of the bill.
“Should the bill be passed into law, wewill consider holding a mass demonstra-tion in the oil and gas fields,” the EastLampung Regent and Regency ForumSecretary, Irfan N Djafar, was quoted assaying.
Indonesian House of Representativespasses new oil and gas law, paving way forfull liberalization of domestic energy sector
The Forum, which has sought a rolein formulating the national oil and gaspolicy and its implementation, had previ-ously sent out letters to PresidentMegawati Soekarnoputri, legislators andAssembly members in an attempt to delaythe law’s passage.
The Jakarta Post also quoted Vice-President of Conoco Indonesia, A RNatanegara, as pointing out that at leastfive articles had been identified in the billthat would cause problems for foreigninvestors.
Natanegara said these concerned tax,the establishment of a new executive bodyto manage the oil and gas sector, the ob-ligation to supply gas to the domesticmarket, the status of existing contracts, andthe licensing of operations.
However, Emir explained that, amongother things, that the new legislationwould require contractors to supply gasto the domestic market to guarantee a sus-tainable availability of the fuel locally.
“We must realize that gas will be widelyused in the future. We don’t want compa-nies to just export it — they must also meetlocal demand,” he said.
Also last month, Indonesian legislatorscommenced final debate on the new pe-troleum mining law, due to pass into lawin January or February 2002.
Senior legislator Julius Bobo said theneed to review the law had become nec-essary to give a clear focus to the peopleand investors.
He pointed out that the present lawhad legal problems, which had forcedmany investors to suspend new investmentin the sector.
The present petroleum mining lawgave the central government full author-ity over the mining sector, contradictingthe new regional autonomy law that al-lows local governments the right to issuemining licenses to investors, Bobo noted.
The central government tabled thenew mining bill in the House of Repre-sentatives in August, as well as the oil andgas bill and the power bill, designed to pavethe way for the privatization of the state-
owned energy companies, includingPertamina and PT PLN.
The new laws, when in effect, wouldassist in promoting investments in themining and petroleum sector and helpattract foreign investors and expertise toaid the development of the country’sdownstream petroleum refining and retail-ing sector.
NNPC says repairs torefineries won’t affectoil product suppliesAbuja — The Group Managing Direc-tor of the state-run Nigerian National Pe-troleum Corporation (NNPC), JacksonGaius-Obaseki, said last month that theCorporation had made adequate arrange-ments to ensure that petroleum productsupplies would not be affected because ofthe shutdown of two of the country’s fourrefineries.
The plants, in south-western Warri(125,000 barrels/day) and northern Kaduna(110,000 b/d), were shut down becausethe pipeline supplying crude oil to themwas vandalized and in need of repair.
Gaius-Obaseki said the NNPC hadprovided for at least 29 days of uninter-rupted supplies of petroleum products inthe country.
Speaking at a meeting between theNational Union of Petroleum and Natu-ral Gas Workers (Nupeng) and the Inde-pendent Petroleum Marketers Associationof Nigeria (Ipman), he said there was nocause for alarm.
“We have built stocks, which tooktime, and we do not have to worry aboutthe shutdown of the two refineries,” Gaius-Obaseki said.
“We are drawing from the stocks atPort Harcourt and imports are coming in,”he said, adding that between June andOctober of 2001, the pipeline linking therefineries with petroleum product depotswas vandalized three times.
He warned petroleum product dealersagainst hoarding products in anticipationof a price hike during the Christmas pe-riod.
“Even with the NNPC restructuring,nobody can get any increased price mar-gin,” he observed, pointing out that the
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“The operation is challenging and thecompressor itself is one of a kind, due toits huge capacity,” said Project Manager,Ayman Al Makawi.
He added that the natural gas fromUmm Shaif would be compressed anddelivered to an existing wellhead tower forinjection.
The multi-million dollar project, duefor completion by 2004, includes a year-long phase of engineering, design andprocurement, which is expected to dras-tically enhance oil recovery from theZakum field.
The implementation of the projectcoincides with plans by other United ArabEmirates (UAE) oil companies to expandexisting capacity, in line with the coun-try’s policy to ensure supplies to the glo-bal market.
The UAE has spent more than $15billion over the past 10 years to increaseits overall oil production capacity. Thecountry’s recoverable oil reserves are esti-mated at 98 billion barrels, nearly 10 percent of the global total.
Algeria’s Sonatrach signsfive exploration contractswith international firmsAlgiers — Algerian state oil and gas com-pany Sonatrach has signed five explora-tion contracts totalling more than $93million with international oil firms, it wasreported last month.
The contracts, related to blocksawarded at the beginning of the monthfollowing an open tender, have gone toBurlington Resources and Anadarko of theUS (402D, 406D), Spain’s Repsol-YPF(401D), Canadian firm Calgary Petroleum(405B), and France’s TotalFinaElf (432,444S, and 403N).
All the blocks awarded are located inthe Berkine basin of south-east Algeria.Under the terms of the agreements, theforeign contracting parties are committedto covering the costs related to the firststage of the schemes, including explora-tion, seismic research and the drilling ofthree or four wells on each block.
They are to invest, respectively, $17mfor Burlington Resources, $15m forAnadarko, $17m for Repsol-YPF,
$26.25m for Calgary Petroleum, and$18.5m for TotalFinaElf.
According to the country’s Energy andMines Minister, Dr Chakib Khelil, whoattended the signing ceremony, Sonatrachwould still sign two other hydrocarbonscontracts before the end of 2001.
With the three deals signed in the firsthalf of this year and the five contractssigned in October, Sonatrach would endthe year with the conclusion of 10 con-tracts, he noted.
Venezuela’s PDVSAlaunches PDV servicestations in ArgentinaCaracas — Petróleos de Venezuela(PDVSA) has launched its commercialbrand PDV on the Argentine fuels mar-ket, it was announced last month.
The move represents the first stage inthe registration of service stations underthe Venezuelan PDV trademark outsideVenezuela.
The launching ceremony was heldwithin the framework of the World En-ergy Congress, organized by the WorldEnergy Council, in Buenos Aires lastmonth.
“I have the pleasure to announce thatArgentina and Brazil will be the first twocountries to have service stations under thePDV flag outside Venezuela,” said PDVSAVice-President Vicenzo Paglione at a pressconference.
Through its PDV trademark in thefuels sector, PDVSA offered to the com-munity of Argentina in general, and inde-pendent distributor chains and owners ofservice stations in particular, a new optionfor quality, product availability, and com-petitive costs, he noted.
The launching of PDV in Argentinawas part of PDVSA’s strategy aimed atstrengthening its activities and presence inLatin America and the Caribbean, headded.
Through its commercial brands, thecompany added value and competitivenessto the regional market, derived from itswide range of resources in hydrocarbons,as well as financial, economic, technologi-cal, operational and human resources.
Paglione pointed out that PDVSA was
government was aware of the current trendin the oil industry, especially the drop inthe price of crude oil.
“Nobody envisaged that the price ofcrude would fall to below $20/b,” he said,and enjoined the leadership of Nupengand Ipman to put their differences asideand come to terms on the need to forgea common front.
“You must have a commitment to ourvision of effective and efficient servicedelivery, believe in our cause and work inharmony in the greater interest of thenation,” he said.
The NNPC invited the two bodies tothe meeting “to nip in the bud” a proposedfive-week strike and the withdrawal of serv-ices by petroleum product tanker drivers.
The tanker drivers have been at log-gerheads with their Ipman employers overtheir demand for a pay rise and betterconditions of service.
The meeting was attended by seniorofficials of the NNPC, Nupeng andIpman, as well as representatives of theFederal Ministry of Employment, Labourand Productivity, and the Chairman of theHouse of Representatives committee onpetroleum resources, West Idahosa.
UAE firm okays planto boost production atZakum offshore fieldAbu Dhabi — The Abu Dhabi MarineOperations Company (ADMA-OPCO)has given the green light for the award ofa major a gas injection project to expandthe output of the Zakum oil field, thecountry’s main offshore field.
The contract, signed by ADMA-OPCO management and representativesof the contractors, the National PetroleumConstruction Company and KelloggBrown & Root, involves a tie-up with thegiant Umm Shaif gas field, where the gaswill be collected for injection at the ZakumWest complex.
“It is one of the largest offshore opera-tions in the history of the company,” saidADMA-OPCO in a statement.
It added that a new compressor at thegas injection platform, with a capacity of200 million cubic feet/day of gas, wouldcarry out the operation.
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In briefpursuing new markets throughout LatinAmerica and the Caribbean, in support ofits mission to help meet the energy needsof the regional community.
“We are committed to energy integra-tion in the western hemisphere and all overthe world,” he affirmed.
A senior official of Citgo InternationalLatin America, which is responsible formarketing the PDV and Citgo brands inLatin America and the Caribbean, notedthat products and services of the PDV lineof lubricants could already be found in 10countries in the region.
Angel Arciniegas commented: “Citgohas begun this year to flag service stationsin Puerto Rico, the first time outside ofthe United States. All of these constituteimportant steps in PDVSA’s business planfor the continent.
“We are bringing to the fuels marketthe experience and best practices gatheredby the organization in the marketing ofPDV products and services in Venezuela,Latin America and the Caribbean, as wellas in the US, through our subsidiary CitgoPetroleum,” he continued.
“This expertise results in quality prod-ucts and services, as well as in harmoni-ous and productive relations with ourpartners and neighbours,” Arciniegasnoted.
QatarGas awards majorLNG plant contract toChiyoda and TechnipDoha — QatarGas announced lastmonth that it had awarded the engineer-ing, procurement and construction con-tract for the debottlenecking of its lique-fied natural gas (LNG) plant at Ras Laffanto a joint venture of the Chiyoda Corpo-ration and Technip.
The contract, worth about $90 mil-lion, formed part of the $200mdebottlenecking programme, QatarGassaid in a statement. It also included themanagement aspect of the otherdebottlenecking project contracts.
The debottlenecking scheme is anessential part of the development strategyof QatarGas. It is aimed at increasingmaximum LNG production from 7.7mtonnes/year to 9.2m t/y.
Installation work for the project willinvolve QatarGas personnel and Qatariconstruction contractors. Completion ofthe debottlenecking project is seen as amilestone in the company’s business planand will contribute towards the compa-ny’s vision of becoming the world’s lead-ing supplier of LNG, the statement said.
Debottlenecking is the process of in-creasing the capacity of a plant by makingrelatively minor modifications to indi-vidual systems.
Every large plant is made up of hun-dreds of smaller systems and equipmentpackages, such as turbines, coolers, pumps,piping and tanks.
When any new plant begins normaloperations, the actual capacity is generallya bit higher than planned, because manycomponents are oversized.
Additionally, the actual capacity isgenerally found to be limited only by avery few specific systems or pieces ofequipment, those that have capacities clos-est to the design capacity. These particu-lar systems are called bottlenecks as theyrestrict the total capacity or flow.
JGC-led consortiumin line for new Libyangas field developmentLondon — A consortium led by theJGC Corporation of Japan has emergedas the frontrunner for a contract to de-velop the onshore Wafa gas field in blockNC-169, in Libya.
The package, which is part of the $4.5billion Western Desert gas project for theexport of gas to Italy, includes the con-struction of a gas and oil-gathering net-work with associated treatment facilities.
JGC’s partners are Italy’s Tecnimont,with its French subsidiary Sofregaz. Thegroup was the lowest bidder for the con-tract at $1.2bn, according to a report inthe Middle East Economic Digest.
Two other groups bid for the contract.A consortium led by Italy’s Snamprogetti,with ABB Lummus Global, and theHyundai Engineering & ConstructionCompany and LG Engineering & Con-struction, both of South Korea, tenderedthe next-lowest amount of $1.6bn. An-other consortium, comprising France’s
September 11 hits US oil demandNEW YORK — The September 11 attacks onthe United States, coupled with a lacklustreeconomy, were among the principal causesfor a 3.7 per cent drop in domestic petro-leum product deliveries in September, com-pared with a year ago, according to theAmerican Petroleum Institute (API). Indus-try deliveries, a key measure of consumer de-mand, declined by 1.6 per cent in the thirdquarter, the first quarterly drop since 1997,the API’s monthly statistical report showed.With commercial airlines grounded for sev-eral days, along with hesitant passengers fora few weeks, kerosene jet fuel deliveries of 1.58million barrels/day were down by 9.7 percent, compared with September a year ago.Jet fuel production of 1.46m b/d was lowerby 11.1 per cent from a year ago.
US leaders seek energy bill passageNEW YORK — United States Energy Secre-tary, Spencer Abraham, and several senatorshave urged the Senate to act immediately onenergy legislation. They said it was impor-tant to show continued support for the im-mediate passage of a national energy bill thataddressed many national security and eco-nomic issues facing the United States. In apress conference held outside the US Capi-tol, senators said that the swift passage of anenergy bill, which included a provision to al-low for oil exploration and development inthe Arctic National Wildlife Refuge, wouldprovide a greater measure of national secu-rity and economic stimulus for the US.Abraham also reiterated President George WBush’s support for a comprehensive nationalenergy policy to be passed in the Senate thissession, despite recent attempts by Senatemajority leader Tom Daschle to push energylegislation further into the future.
Oman signs deal to boost oil outputMUSCAT — Oman has entered into a five-year agreement with PGS Geophysical as partof its campaign to increase domestic oil out-put. The accord, signed on behalf of theOmani government by Oil and Gas Minis-ter, Dr Mohammed Bin Hamad Al Rumhy,stipulates that “PGS Geophysical will carryout a seismic survey and interpret seismic dataavailable to assess the presence of oil in thearea,” which is offshore block no 41. Underthe agreement, PGS Geophysical will alsohave the right to market and promote theblock in the international market, as wellas sell the information under the supervisionof the Omani government, without addi-tional cost. The aim of the exercise is to helppromote a market for open blocks in thecountry.
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In briefBouygues, with Argentina’s Techint andthe Athens-based Joannou &Paraskevaides, bid just over $1.7bn.
The contract is for the turnkey con-struction of a gas and oil-gathering net-work linking 38 wells that have been ear-marked for development, located 550 kmsouth-west of Tripoli.
The selected contractor will also buildseparate gas, oil and condensate treatmentfacilities at the Wafa field. France’s TechnipGeoproduction, which did the front-endengineering and design for the project, isalso acting as project management consult-ant.
The same three bidders, plus a teamof South Korea’s Samsung Corporationand Germany’s Linde, were also due tosubmit proposals last month for a contractto build the Melitah gas treatment facili-ties.
This work includes the installation ofgas sweetening facilities, control units, andcondensate treatment and sulphur recov-ery units.
The plant will eventually process gas,oil and condensate for export to Italy, viathe planned 570-km, 32-inch diameterpipeline, from the offshore Bouri field inblock NC-41.
An award for both packages is expectedbefore the end of 2001 with work sched-uled to start in 2002. Italy’s ENI has al-ready signed off-take agreements for 8bncubic metres/year of gas, starting in 2004.
Attention is now shifting to the othermain contract packages. Six groups arecompeting for the work to install the 520-km twin gas and oil Wafa-Melitah onshoreexport pipeline.
Kuwait Petroleum Italiaannounces nine-monthpre-tax profit of Eur 49.8mRome — Kuwait Petroleum Italia (KPI)last month announced a pre-tax profit ofEur 49.8 million for the first nine monthsof the current financial year, according tothe Kuwait News Agency (KUNA).
The Director of KPI’s Finance andInvestment Department, Fawzi AlMkeimi, said the result was significantsince the profit for the whole of last yearamounted to only Eur 7.7m.
He said a very good result was realizedby KPI’s operations sector, with earningstotalling Eur 73.5m for the nine-monthperiod, compared with Eur 28.9m for allof 2000.
Mkeimi said the profit rise was due toKuwait’s drive to improve marketing per-formance and implement better retailoptions, KUNA reported.
Other reasons for the improved profitoriginated from the growth of the refin-ing capacity at the Milazzo plant in Sicily,which is 50 per cent owned by KPI and50 per cent by Italy’s Agip.
Indonesia’s Pertaminamay acquire BP stakein Singapore refineryJakarta — The Indonesian state oil andgas firm Pertamina is planning to acquireall or part of BP’s one-third share in theSingapore Refining Company, which hasa 285,000 barrels/day plant in the citystate.
Pertamina was open to the possibilityof buying the stake in the world-classrefinery and was in talks with BP, said theIndonesian firm’s President BaihakiHakim, adding that BP had offered to sellthe plant about a year ago, but Pertaminahad then declined.
Baihaki said the acquisition would bepart of plan to expand Pertamina’s busi-ness and make it an international com-pany. The enterprise is being privatizedunder a newly-passed law.
The Singapore refinery was strategi-cally located to supply products to Indo-nesia’s remote areas, according to indus-try observers.
It would give an edge to Pertamina insupplying products to those Indonesianprovinces which were closer to Singaporeand where refineries had not been built.
The Caltex Corporation (owned byChevronTexaco) and Singapore Petroleumeach hold a one-third share in the Singa-pore refinery. The $3 billion plant has notattracted buyers, due to very low refiningmargins for the past few years.
Baihaki also disclosed that Pertaminahad secured a $250 million foreign loanout of its $1bn plan, which would be usedto acquire the Indonesian oil and gas
Philippines mulls new naphtha crackerMANILA — The Philippines plans to finalizea joint-venture agreement with Malaysia andBrunei later this year for the establishmentof a $600 million domestic naphtha cracker.The President of the Philippines National OilCompany (PNOC), Thelmo Cunanan, saidthat the plant would be the first of its kind.“We are hoping to complete the joint-ven-ture agreement by the end of the year andsign it by January 2002,” he was quoted bythe Malaysian news agency, Bernama, as say-ing. Under the proposed plan, Malaysia’sPetronas would take a 20 per cent stake inthe venture, while the Brunei governmentwould hold a 35 per cent share. One ofPNOC’s subsidiaries, the Petrochemical De-velopment Corporation, would possess a 35per cent stake, with the remaining shares heldby Japanese investors. The plant, to be sitednorth-east of the capital, Manila, would pro-duce nearly 700,000 tonnes/year of poly-propylene and polyethylene.
BP moves to develop Clair fieldBRUSSELS — The British oil giant, BP, has an-nounced plans to develop what it describesas “the largest untapped oil field in UnitedKingdom waters” more than 25 years after itwas first discovered. The firm said it couldproduce up to 250 million barrels of oil inthe first phase of the development of the Clairfield in the North Sea, at a cost of around $1billion. BP’s North Sea Operations and De-velopment Manager, Doug Suttles, said:“There are some who thought that the fieldwould never be developed, but as technologyhas improved and smarter ways of workinghave been developed, we have moved stead-ily to the realization that the field could beeconomically and competitively developed.”The development of phase one of the opera-tion, which is planned to yield 60,000 b/d ofoil and 15m cubic feet/d of gas from 2004, isexpected to start as soon as the UK Depart-ment of Trade and Industry gives approval.
Petronas wins Bahrain oil contractsKUALA LUMPUR — Malaysia’s state-owned oilcompany, Petronas, has been awarded two ex-ploration blocks in Bahrain. The two blocks,numbers four and six, are to be explored un-der a production-sharing arrangement.Petronas said in a statement that the blocks,for which it was the operator, were located inthe eastern offshore area of the country. Theaward of the contracts by the government toPetronas followed the acceptance of the com-pany’s proposal in June 2001. The govern-ment had called for a tender in respect of theblocks in March 2001, which attracted sev-eral international oil companies.
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In briefoperations of the Spanish-Argentine oilgiant Repsol-YPF.
While waiting to sign the first loancontract, Pertamina was also in negotia-tion with the same lenders for another$400m loan to be used to build a gaspipeline from Sumatra to West Java, hesaid.
Pertamina had also proposed to thegovernment to change the status of the twoliquefied natural gas producing centres atAceh, in North Sumatra, and Badak, EastKalimantan, to generate more revenue, headded.
Pertamina owned major stakes in thetwo plants and should be allowed to raisemoney by increasing production, he main-tained.
Iran considers awardof new gas projectsfor offshore fieldsTehran — Iran is considering the awardof new gas development projects in theoffshore fields of Parsian, Bid-Boland, andSouth Pars, according to the country’sPetroleum Minister, Bijan NamdarZangeneh.
He said that some of the schemes,including phases nine and 11 of the SouthPars gas field, had already been tenderedand that his Ministry had received pro-posals by some bidders.
However, the Minister did not disclosethe interested parties, nor did he indicatewhen the tenders would be offered.
“The necessary documents for tender-ing other plans are being prepared,”Zangeneh was quoted as saying by theofficial Islamic Republic News Agency(IRNA) as saying.
He said earlier that the massive SouthPars gas field project, billed for August,would not commence until all relevantdocuments from the bidders had beenexamined.
Iran was said to be in negotiations withpotential partners to develop phases 11and 12 of South Pars. ENI of Italy andTotalFinaElf of France have been men-tioned as among the companies withstrong chances in those phases.
Each of the development phases 9-12of the South Pars field will require an
estimated investment of some $1 billion,said the Iranian News Agency.
Saudi Aramco boardrestructured and fournew directors appointedJeddah — The 12-member board ofSaudi Arabia’s state oil firm, Saudi Aramco,has been restructured with King Fahd BinAbdulaziz Al-Saud appointing four newdirectors, according to the Saudi PressAgency (SPA).
The Kingdom’s Minister of Petroleumand Mineral Resources, Ali I Naimi, re-tained his post as Chairman of the boardof directors for the next three years, effec-tive from November 30.
The Saudi Aramco board was last re-shuffled in 1998, when three new appoint-ments were made, reported SPA.
The four new members of the boardare Minister of State and President of theSaudi Seaports Authority, Abdul Aziz IbnIbrahim Al-Manie; the Secretary Generalof the Supreme Economic Council, AbdulRahman Ibn Abdul Aziz Al-Tuwaijri; theVice-President of King Abdul Aziz Cityfor Science and Technology, MuhammadIbn Ibrahim Al-Suwayel; and the formerHead of US firm Marathon Oil, VictorBeghini.
Citgo’s Lake Charlesrefinery back to fullcapacity following fireCaracas — The United States-basedCitgo Petroleum Corporation announcedlast month that its refinery at Lake Charlesin Louisiana has almost resumed full op-erating capacity, following a fire at theplant in September.
The 330,000 barrels/day plant hadbeen operating below installed capacitysince September 21, when the fire occurredin the Unicracker, which produces turbinefuel.
Citgo, a subsidiary of Venezuelan stateoil firm PDVSA, said repairs on theUnicracker unit were expected to be com-pleted in mid-November. No serious in-juries resulted from the fire.
US drilling activity up in 3Q01NEW YORK — The number of oil, natural gasand dry wells drilled in the United States inthe third quarter of 2001 increased by an es-timated 24 per cent, compared with the sameperiod of 2000, the American Petroleum In-stitute (API) has announced. The number ofoil wells drilled in the period rose by eightper cent, while those for natural gas increasedby 32 per cent, as opposed to the same quar-ter last year. According to the API’s latestquarterly well completion report, 9,901 oil,natural gas, and dry wells were drilled in thethird quarter. Of the total, the number of gaswells drilled stood at 7,987, oil wellsamounted to 2,444, while dry holes num-bered 914. Total exploration wells drilled inthe quarter were up by 41 per cent, whiledevelopment wells drilled were 23 per centmore than in the same quarter last year.
Global demand for LNG vessels upSEOUL — Global orders for liquefied naturalgas vessels hit a record high of 29 in 2001,compared with 21 in 2000, according to areport carried by the Korea Herald last month.Quoting industry sources, the report said theorder in 2001 was nearly five times more thanthe six vessels placed in 1999. It said interna-tional shipping companies were planning toplace additional orders for LNG tankers in thecoming year. Danish shipping group A PMoller, which traditionally transports lique-fied petroleum gas, joined the LNG trade whenit placed a vessel order with Samsung HeavyIndustries recently. The report added that thebrisk LNG tanker market was based forecastsof on LNG consumption reaching 2.05 billiontonnes in 2005 and 2.27bn t in 2010, com-pared with 1.8bn t in 2000. South Koreanshipbuilders were expected to benefit greatlyfrom the demand for new LNG vessels, hav-ing taken orders for 18 tankers this year, or70 per cent of the worldwide total.
Norway sees drop in oil revenuesBRUSSELS — The Norwegian government saidlast month that revenue from the country’spetroleum operations will fall to a projected$23.5 billion in 2002, some $4.5bn less thanthe expected figure for 2001. It said that thereason for the decline was the impending eco-nomic recession, coupled with the reductionin industrial demand for oil. The governmentestimate is based on an expected average oilprice of $22.86/b, down from an average of$26.29/b in 2001. Government officials havealso forecast a drop of some three per cent inthe total export value of the petroleum sectorin 2002. Average oil production from theNorwegian continental shelf is expected torise to 3.2 million barrels/day in 2002.
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In brief“Although none of the other refinery
units were damaged, we brought thoseunits back up slowly and deliberately toensure the safety of our employees,” saidCitgo Vice-President for Lake Charles, AlPrebula.
“We are very pleased to have the refin-ery back up at full capacity and are work-ing diligently to get the Unicracker backonstream,” he added.
The company also said that an inves-tigation into the cause of the incident hadrevealed that it occurred as a result of aninternal explosion in the Unicracker hy-drogen supply coalescer (filter system) inthe process of being replaced, following aroutine filter change.
Algeria’s Sonatrach holdsexploration talks overoil block in SudanAlgiers — Algerian state oil and gas com-pany Sonatrach is holding discussions withSudanese authorities for the explorationof block 15 in Sudan, it was reported lastmonth.
The talks were conducted on the side-lines of an official visit to Sudan by Alge-rian Energy and Mines Minister, HE DrChakib Khelil.
According to Sonatrach sources, thediscussions relating to block 15 started amonth ago and involved technical studiesto determine the potential of the block.
During his visit, Khelil, together withSudanese Industry and Investment Min-ister, Djalal Youcef Eddakir, co-chaired ameeting of businessmen from both coun-tries in Khartoum.
The Algerian Minister pointed out thatthe holding of these talks would contrib-ute to reinforcing bilateral relations be-tween the two countries, including in theenergy domain.
Khelil also indicated that the twocountries had already engaged in discus-sions on joint energy projects, stating thathe was optimistic about their outcome.
In a separate development, Sonatrachalso signed a contract with First CalgaryPetroleum covering block 405B, MenzelLejmat, located in eastern Algeria. The dealincreases First Calgary’s holdings in theprolific Berkine basin to over 2,000 sq km.
Work is proceeding rapidly on block406A, signed in June last year. An exten-sive 3-D seismic survey to detail severalstrong leads is projected to commencebefore December, with the first explora-tion well due to be drilled in mid-2002.
Block 405B is situated in the heart ofthe active Berkine trend and containsproven reserves of gas and liquids, togetherwith strong exploration leads over muchof the block.
Field work will commence early nextyear, focusing on the rapid appraisal of theMLE-1 discovery. This will be accompa-nied by an extensive seismic survey to de-fine the block’s key exploration prospects.
Shell Nigeria gatheringand exporting more gasto help curb flaringAbuja — The Shell Petroleum Devel-opment Company (SPDC) has begun ex-porting Nigerian gas, as part of a plan tostop gas flaring in the country by 2008.
The company said in the current edi-tion of its house journal Shell Bulletin thatthe firm began sending gas into theEscravos-Lagos pipeline towards the endof last month.
“Some 40 million cubic feet/day of gasis currently being exported,” the companysaid, adding that the associated gas beingexported was from the Odidi-1 flow sta-tion, which was one of five such facilitiesin its western division northern swampproduction area.
“A total of 80m cu ft/d of gas will begathered and converted to economic useby the time all of them are hooked up,”Shell said in the publication. It added thatthe Odidi project was awarded in 1988 ata cost of $300m.
“The Odidi project is based on a pre-fabricated modular concept which impactslittle on the environment. The projectinvolves the installation of booster com-pressors, central processing facilities, aswell as a general facilities upgrade andelectrification,” the company said.
It stressed that apart from the complexcompression and utilities modules, whichwere fabricated abroad, all the pipe rackand walkway work was done locally at theNigerian ports yard in Warri.
IMF says GCC needs income taxesDUBAI — The International Monetary Fund(IMF) has urged the six Gulf Co-operationCouncil (GCC) states to introduce incometaxes to increase their revenues and protecttheir economies against unpredictable oil ex-port earnings. The IMF said the GCC statesshould drop their reluctance to introduce suchtaxes, as crude oil sales alone would notachieve sustainable economic growth. It pro-posed five types of taxes for the 20-year-oldeconomic, defense and political group, in-cluding taxes on individual income, corpo-rate profits, consumption, fees and valueadded. “GCC states should start introducingsuch taxes, which will expand non-oil rev-enues,” said the IMF in a report on sustain-able development and economic stability inthe GCC, which comprises OPEC MembersKuwait, Qatar, Saudi Arabia, and the UnitedArab Emirates, in addition to non-OPECOman and Bahrain.
Gulf capacity expansion may slowDUBAI — Gulf countries will likely put abrake on their investments in oil output ca-pacity expansion as global crude demandgrowth is set to slow down, following theSeptember 11 attacks on the United States,according to the London-based Centre forGlobal Energy Studies (CGES). “Global oildemand growth will very likely slow downbecause of slower world economic perform-ance, following the attacks in the US,” CGESanalyst Julian Lee was quoted as saying bythe Dubai-based Gulf News. “I think this willencourage the big producers in the Gulf toscale down their expansion operations. At thesame time, we expect small producers withinOPEC … to continue such plans,” he said.
US stripper well production upNEW YORK — Reversing what was a long-term decline, the number of marginal oil wellsand production from marginal oil wells in theUS increased in 2000, according to figuresreleased by the Interstate Oil and Gas Com-pact Commission (IOGCC). In 2000, thenumber of marginal or stripper oil wells inthe US rose to 411,793, compared with410,680 in 1999. Production in 2000 in-creased to 326.21 million barrels, up from315.51m b in 1999, the first annual increasein production since 1984, according to theIOGCC’s national stripper oil well survey of28 oil-producing states. Although each indi-vidual well produces only small amounts ofcrude (an average of 2.16 barrels/day for2000), stripper wells account for 29 per centof US domestic oil. Arkansas Governor andIOGCC Head, Mike Huckabee, described itas “good news for America.”
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In brief“Implementation of the project has
gone on simultaneously with the execu-tion of a robust development plan for thehost communities, which comprised sandfilling at several locations, construction ofjetties, establishment of poultry farms, apig farm, a cassava processing mill, andceramic farms,” Shell added.
The company also said that it hadacquired a well control simulator costing$200,000 to train well engineers. Com-pany official Chima Ibeneche said themove to get the simulator was the rightthing to do for Shell.
“Producing oil from a well is a hazard-ous and difficult business and those whoengage in it need to be trained and re-trained,” he pointed out.
Final Dolphin gas dealdue to be signed soon,says Qatari MinisterDoha — Qatari Minister of Energy andIndustry, Abdullah Bin Hamad Al Attiyah,said last month that the final developmentand production-sharing agreement for theDolphin gas project would be signed soon.
Qatar and Dolphin Energy Ltd (DEL)were very much on track to ink the dealfor the $3.5 billion project to supply 2bncubic feet/day of Qatari gas to the UnitedArab Emirates (UAE), he noted. FirstQatari gas is expected to reach the UAEby late 2004.
The Minister said the deal wouldenable the Abu Dhabi-based UAE OffsetsGroup (UOG) to develop a tract of Qatar’sgiant North field and produce up to 2bncu ft/d of gas.
UOG launched DEL to execute thedeal. UOG holds a 51 per cent stake inDEL, with the remainder owned equallyby France’s TotalFinaElf and the US-basedEnron Corporation.
UOG would invest $2bn in develop-ing the upstream facilities for productionof gas from the Khuff formation in theNorth field, which would be transportedto a gas-gathering and processing plant atRas Laffan to strip out the condensate,ethane, liquefied petroleum gas, and sul-phur.
The remaining $1.5bn would be in-vested in laying a sub-sea pipeline and to
set up receiving terminals at Taweelah inAbu Dhabi and Jebel Ali in Dubai.
The first export-oriented pipelineproject in the Middle East, Dolphin wouldpave the way for the creation of a GulfCo-operation Council (GCC) grid origi-nating in Qatar.
A recent report from Abu Dhabi saidDEL had received technical and commer-cial bids from eight international firms forthe upstream and the midstream front-endengineering and design contracts for theproject.
Both the upstream and the midstreamcontracts were expected to be signed inearly December, the report noted.
Indonesia plans phasedhike in fuel prices assubsidy is reducedJakarta — The Indonesian governmentplans to raise domestic fuel prices by 30per cent from January 2002 to help sup-port the state budget, it was announcedlast month.
The House of Representatives ap-proved the government proposal to raisepump prices and reduce the subsidy.
However, the increases would be in-troduced gradually to avoid negative reac-tions from the public, said the Chairmanof the Budget Committee, legislator BennyPasaribu.
Fuel price increases had been politi-cally sensitive as they affected all sectorsof society and had led to riots and pro-tests in the past, he noted.
The steps taken by the government toremove the subsidy, as agreed with theInternational Monetary Fund (IMF),would help to restructure the nationaleconomy, he added.
With the latest proposed increase infuel prices, the government fuel subsidyfor 2002 would be down from this year’s53.77 trillion rupiahs ($5.33 billion). Ithad previously proposed a 32.92tr rupiahsfuel subsidy for 2002.
The government would subsidize52.77 million kilolitres of fuel during theyear, down from 55.79m kl, as proposedby the state oil and gas enterprise,Pertamina.
The budget committee also approved
Petrochems industry needs higher pricesLONDON — The higher the price of crude oil,the better placed Middle East petrochemicalproducers are to benefit from the compara-tive feedstock advantage that makes the re-gion a profitable location for such projects,according to a recent report in the Middle EastEconomic Digest (MEED). The lower thecrude oil price, the slimmer their profit mar-gins become, said the MEED report. “It mustbe said that if the crude oil price came downbelow $15/barrel, some of the competitiveadvantages would be diluted,” commentedDirector at industry consultants CMAI Eu-rope, Andrew Pettman. “When the price is$30/b, as it was in 2000, Middle East pro-ducers can enjoy a cash cost advantage ofabout $100/tonne for ethylene projects overEuropean schemes,” he added.
GCC oil income to fall to $107.6bnDUBAI — Gulf Co-operation Council (GCC)states are expected to earn around $107.6billion from oil exports in 2001, far belowlast year’s income, according to a report bythe London-based Centre for Global EnergyStudies (CGES). The decline in revenues ofthe six-nation GCC is a result of a drop inaverage crude prices in 2001 compared to2000, said the CGES. The GCC countries,which controlled 45 per cent of the world’sproven crude reserves, earned $130bn in2000 as a healthy global economy saw oilprices rise to their highest levels in 18 years.“Earnings by the GCC and OPEC as a wholewill be lower because prices are lower,” DrLeo Drollas of the CGES was quoted as say-ing by the Gulf News of Dubai.
ChevronTexaco marks first day of businessNEW YORK — The newly-merged Chevron-Texaco marked its first official day of busi-ness as shares of its stock begin trading onthe open market in October, according to acompany statement. The firm’s Chairman,David J O’Reilly, together with Vice-Chair-man, Glenn Tilton, and Chief Financial Of-ficer, John Watson, marked the occasion witha ceremony at the New York Stock Exchangewith the latter’s Chairman, Richard Grasso.ChevronTexaco enters the global marketplaceas the second-largest US-based energy com-pany and the fifth largest in the world, basedon a market capitalization of $97 billion.Among non-state oil firms, the new companyranks third in the world in oil reserves andfourth in oil and natural gas production, withexploration and production operations in allof the world’s most prolific and promisingregions. More than 53,000 ChevronTexacoemployees work in some 180 countriesaround the world.
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In briefthe revised 2002 budget assumptions andbased it on four per cent economic growth,nine per cent inflation, an exchange rateof 9,000 rupiahs to the US dollar, a BankIndonesia promissory note interest rateof 14 per cent, and an oil export price of$22/barrel.
Nigerian agency signsdeal with German firmcovering Niger DeltaAbuja — The Niger Delta DevelopmentCommission (NDDC) has signed anagreement with Germany’s Gesellschaft fürTechnische Zusammenarbeit (GTZ) forthe development of an integrated regionalmaster plan for the Niger Delta region.
The agreement was signed on behalfof the NDDC by its Chairman, OnyemaUgochukwu, and Managing Director,Godwin Omene, while GTZ Director,Heiner Wolter, and Chairman of WilbahiEngineering, Edmund Daukoro, signedon behalf of the German outfit.
Under the terms of the accord, GTZwill be a partner with the NDDC in thedevelopment of the sector, state and re-gional master plans.
The German firm will also co-ordi-nate, manage and administer the largenumber of predominantly indigenousconsulting companies that will implementthe plans.
Some of the sectoral plans will coverinfrastructure, including roads, waterways,airports and railways, water supply andsewage, electricity, telecommunications,education, agriculture, forestry, wildlifeand aquaculture (biodiversity conversa-tion); environmental, coastal dynamicsand hydrology, small and medium scaleindustries; and large scale industries.
Others are rural, urban and regionalplanning and housing, sanitation andwaste management, arts, culture, sportsand tourism, health and social welfare,solid minerals, women, youth develop-ment and empowerment, and demo-graphic and socio-economics.
The NDDC’s Executive Director, Fi-nance and Administration, Timi Alaibe,said in a statement: “The signing of thisagreement represents a significant mile-stone in the operations of the NDDC,
which is in tandem with the mission state-ment of the commission.”
The NDDC is expected “to facilitatethe rapid, even and sustainable develop-ment of the Niger Delta into a region thatis economically prosperous, socially stable,ecologically regenerated and politicallypeaceful.”
According to the Chairman of theNDDC, the master plan “represents thecore of our operations and will form thebasis for the development which theNDDC will bring to the Niger Delta.
“It will provide the NDDC with thecomprehensive framework for the imple-mentation of the programmes of the com-mission,” he added.
Petrolera Ameriven tobegin operations at itscrude converter facilityCaracas — Petrolera Ameriven, one offour strategic associations engaged in theproduction and upgrading of extra-heavycrudes from the Orinoco oil belt in Ven-ezuela, has announced plans to open itsproduction facilities at Bare, Anzoateguistate, in eastern Venezuela.
State oil corporation Petroleos de Ven-ezuela (PDVSA) and ChevronTexaco eachhold a 30 per cent stake in Ameriven,which is responsible for the Hamacaproject in the Orinoco oil belt. PhillipsPetroleum has the remaining 40 per cent.
“Petrolera Ameriven will begin itsoperations on November 20, 2001, fol-lowing the inauguration of productionfacilities,” commented company PresidentVictor Estrano.
“The synergy that we have withPDVSA and the concentration of theworking team on the fulfilment of the planhas allowed us to make accelerated stepsand quickly bring us up to the level of theother three projects,” he said.
The other three strategic heavy crudeprojects in the Orinoco oil belt arePetrozuata, Sincor and Cerro Negro.
The Hamaca project is designed toproduce some 190,000 barrels/day ofextra-heavy crude, which will be convertedinto a lighter synthetic crude of about 25-26° API at facilities located at Jose,Anzoategui state for export.
Drilling activity mixed in SeptemberNEW YORK — The worldwide rig count forSeptember stood at 2,276, down by 57 fromthe 2,333 counted in August, but up by 237from the 2,039 recorded in September 2000,according to the latest estimates from BakerHughes. The international rig count (worldexcept United States and Canada) for lastmonth was 766, up by 10 from the 756counted in August and higher by 52 than the714 counted in September 2000. The inter-national offshore rig count for September was226, up by seven from the 219 registered inAugust and 13 more than the 213 countedin September last year. The US rig count forlast month stood at 1,193, down by 59 from1,252 in August, but up by 182 from the1,011 recorded in September 2000.
Gas use up 4.8 per cent in 2000DOHA — Natural gas consumption world-wide increased by about 4.8 per cent to arecord 2.16 billion tonnes of oil equivalentlast year, according to energy expert Dr NajiAbi-Aad. World energy demand in 2000 roseby about 2.1 per cent, Dr Abi-Aad, who is aSenior Adviser at l’Observatoire Mediter-raneen de l’Energie in France, told an indus-try conference in the Qatari capital Doha.Natural gas had attained its highest ever glo-bal share, representing some 24.7 per cent ofworld primary energy demand, he said. Be-tween 1980 and 2000, demand for naturalgas had increased by an average annual rateof 2.7 per cent, compared with 0.8 per centfor oil. Natural gas had become a preferredsource of energy, due to many reasons, in-cluding the fact that it was considered to bethe cleanest of all fossil fuels.
US oil industry challenges diesel rulesNEW YORK — A broad coalition of trade as-sociations representing US refiners and mar-keters has filed a brief which asks the Courtof Appeal for the DC Circuit to send the En-vironmental Protection Agency’s new dieselsulphur rules back to the EPA for revision.The associations are concerned that the rule,as written, would lead to shortages of dieselfuel, beginning in 2006. Diesel fuel is Ameri-ca’s primary commercial fuel, and 70 per centof the nation’s goods are transported in die-sel-powered vehicles. An adverse impact ondiesel fuel supply could sharply increase fuelcosts, which would result in higher prices forconsumer goods, argue the petitioners, whoinclude the National Petrochemical & Refin-ers Association, the American Petroleum In-stitute, and the Society of IndependentGasoline Marketers of America. The newrules require a 97 per cent reduction in high-way diesel fuel sulphur levels by mid-2006.
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In briefWorld’s biggest ethanecracker to be built byTotalFinaElf in Qatar
Paris — French oil giant TotalFinaElfannounced last month that its chemicalunit, Atofina, and the Qatar Petrochemi-cal Company (Qapco), had signed amemorandum of understanding for theconstruction of a giant ethane crackerfacility.
Under the deal, which was signed withstate oil firm Qatar Petroleum and Chev-ron Phillips Chemical, the unit would bebuilt by the second half of 2006.
It said in a statement that the finalcontract, the details of which were notpublished, would be signed by the end ofthis year.
The cracker would have a start-upcapacity of 1 million tonnes/year and asecond phase would increase this to 1.5mt/y at an undisclosed date. That wouldmake it the largest such unit in the world.
TotalFinaElf said initial production offeedstock of 400,000 t/y would be sup-plied to the polyethylene plant atMessaied, in south-eastern Qatar, whileadditional feedstock would go to supplythe QVC plant opened in Qatar last June,in which Atofina had a 16 per cent stake.
Excess ethylene feedstock would beused to consolidate supply at both facili-ties. TotalFinaElf also has a 10 per centshare in Qapco.
Iranian official seeslower oil income thisyear as prices fallTehran — Iran’s crude oil revenues forthe current Iranian year (beginning March21, 2001) are likely to be lower than theprevious year, according to a senior offi-cial with the National Iranian Oil Com-pany (NIOC).
NIOC Deputy Head, HojjatollahGhanimi-Fard, pointed out that crude oilrevenues for the first half of the Iranianyear stood at $9.8 billion, a 12 per centdecline from the corresponding period lastyear, when the figure stood at $11.15bn.
The export of oil derivatives in the first
half of the year fetched $500 million,compared with $1.7bn in the same periodof 2000.
Ghanimi-Fard blamed the drop inIran’s crude oil revenues on falling oilprices and on a reduction in oil exportsby OPEC Members, as agreed upon bythe Organization.
He said the average price of Iranianoil in the first half of the year stoodat about $24/barrel, compared with$25.9/b in the same period last year.
Ghanimi-Fard noted that the price ofIranian crude oil had slumped to around$20/b since the September 11 attacks onthe United States.
The NIOC official also said Iran hadimported as much as 7 million litres/dayof petrol in the first half of the currentIranian year.
He estimated the import value of pet-rol and additives used to produce petrolat about $600m this year, showing a$100m increase over the previous year.
UAE firm’s businesslittle affected by dropin aviation fuel demandDubai — The drop in demand for avia-tion fuel following the September 11 at-tacks on the United States will not seri-ously affect the performance of the Emir-ates National Oil Company (ENOC),according to a top company official.
ENOC Chief Executive, Hussain Sul-tan, said that recent developments follow-ing the attacks would have little adverseimpact on business generally in the UnitedArab Emirates (UAE), or the performance.
Sultan pointed out that there wouldbe no need for ENOC to reshape its policyand strategy to fit the recent developments.
“We have a clear policy that fits allconditions,” he stressed, adding that thecompany was performing fairly well andwas expected to show a better financialperformance than the previous year.
Sultan said that ENOC was constantlysearching for new investment opportuni-ties, adding that it was exploring for moreoil deposits in Turkmenistan to increasethe output of the Dragon project, whichwas at present producing 2,000 barrels/day of oil, by end of this year.
Africa needs $10bn for power schemesABUJA — West African countries need about$10 billion to rehabilitate and construct newelectricity generating plants and update andbuild new high-voltage transmission linesover the next 15 years, according to a planapproved by Energy Ministers of the Eco-nomic Community of West African States(Ecowas). Under the plan, about $5.8bnwould be required in new investments for a10-fold increase in existing transmission ca-pacity and a six-fold rise in installed genera-tion capacity. Based on the expected electricitygrowth rate, the 16 Ecowas members neededmore than 28,000 megawatts of new gener-ating capacity to be added to available capac-ity in the region for the period 2001-20. Thereport added that West Africa’s power sectorwould be constrained by its inability to raisesignificant capital in the near future, in viewof its small size and investors’ perception ofthe region as a high-risk zone.
Thailand’s PTT mulls investment planBANGKOK — The Petroleum Authority ofThailand (PTT) will maintain an investmentbudget plan worth $2.24 billion over the nextfive years, despite the global economicslowdown. PTT, which became a public com-pany on October 1, with the Thai FinanceMinistry holding a 100 per cent interest andplanning to float about 30 per cent of its stakeon the local bourse in the coming months,plans to focus on the core businesses of gas,oil, petrochemicals and refining. However,PTT wants to limit investment in non-corebusinesses, such as chemical fertilizers, andreduce its stake in the firm’s refinery, said thefirm’s President, Viset Choopiban. PTT alsoplans to invest 80bn baht in natural gas de-velopment and reduce its consumption of oil,while indigenous gas and condensate reserveswould be developed for use in the petro-chemical and refining sector, said Viset.
Americans want more domestic energyNEW YORK — A nationwide poll in the UShas shown a dramatic increase in the numberof Americans who see increasing domesticenergy production as a key element in im-proving and protecting the country’s nationalsecurity. The poll, conducted by WirthlinWorldwide and released by Arctic Power,came in the wake of the September 11 at-tacks on New York and Washington. Some71 per cent of those polled said they favouredincreasing domestic supplies of traditionalenergy sources, including oil, natural gas, coal,and nuclear power. Another 38 per cent citedprotecting national security by ensuring a sta-ble supply of energy for the future as the mainreason for acting on a national energy plan.
N E W S L I N E
24 OPEC Bulletin
In brief Iran and Japan agreeon steps to promoteoil sector co-operation
Tokyo — The Iran-Japan joint energyconsultative commission agreed at a meet-ing last month on ways to promote theactive participation of Japanese companiesin Iranian oil projects.
Sources close to the meeting said com-mission officials had also agreed to collabo-rate on the expansion of gas-poweredvehicles and manpower training in Iran’soil sector.
In addition, they stressed the need forensuring oil price stability in internationalmarkets, the official Islamic RepublicNews Agency (IRNA) reported.
Iranian Deputy Petroleum Ministerand Deputy Head of the National IranianOil Company (NIOC), Mehdi Mir-Moeziheaded the seven-man delegation to thetalks. The first meeting of the commissionwas held in August.
The Japanese public-private consor-tium in June reached an agreement withthe Royal Dutch/Shell group to jointlydevelop the Azadegan oil field, in whatwould be Japan’s largest investment in thecountry since 1979.
Iran is currently the third largest crudeoil supplier to Japan, added the IRNAreport.
Anadarko oil finds inAlgeria estimated at2.8 billion barrelsAlgiers — United States oil companyAnadarko has discovered total oil reservesestimated at 2.8 billion barrels since be-ginning operations in Algeria, it was re-ported last month.
According to Anadarko’s Manager forAlgeria, Anthony Meyer, the company,which started exploration activities in thecountry at the end of the 1980s, was stillexpecting to make significant discoveries,“seeing that the country possesses one ofthe most appreciable hydrocarbonspotentials on the continent.”
Speaking after the signing of an explo-ration deal with the Algerian state oil and
gas company, Sonatrach, he also praisedthe new procedures set by Algeria forgranting hydrocarbons contracts.
He pointed out that these new proce-dures were based on total transparency andgreater speed of implementation.
Sonatrach recently announced in astatement that the duration for the nego-tiation of new contracts would be reducedto three months, instead of the previoustime-span of two years.
Foster Wheeler getsengineering deal forGTL plant in QatarNew York — The UK subsidiary of Fos-ter Wheeler has been awarded a front-endengineering and design contract for an$800 million gas-to-liquids (GTL) projectat Qatar’s Ras Laffan Industrial City.
The GTL facilities will provide fuel,naphtha and liquefied petroleum gas fordomestic consumption. The contract wasawarded by a joint venture of Sasol andQatar Petroleum.
Foster Wheeler Energy Ltd is the firstcontractor using Sasol GTL technology tobe involved in a Sasol GTL plant outsideSouth Africa.
The scope of Foster Wheeler’s workincludes preparation of the feed, selectionof long lead package vendors and a geo-technical survey, and preparation of theinvitation to bid.
It is also responsible for pre-qualify-ing engineering, procurement and con-struction (EPC) contractors and will assistin the selection of bidders, lender evalu-ation and the award of the EPC contract.
The project will provide 24,000 bar-rels/day of fuel, 9,000 b/d of naphtha and1,000 b/d of LPG from a supply of 330mcubic feet/d of lean natural gas.
The liquid fuels produced by the GTL
facility will have virtually no sulphur, ahigh octane number and a very low aro-matic content and will enable significantreductions in noxious emissions, such asparticulates, nitrous and sulphur oxide,carbon monoxide and hydrocarbons.
The complete project from contractaward to operation is on a fast-track sched-ule with commercial production expectedin the first quarter of 2005.
Canadian firm makes heavy oil findNEW YORK — Canadian company BlackrockVentures has made a significant oil discoveryat Seal, in northern Alberta. The firm indi-cated that, to date, it had drilled three suc-cessful horizontal wells at Seal, saying that theinitial well had been on a production test for130 days and was currently producing 300barrels/day of oil. The second well, tested for30 days, saw production reaching 375 b/d.The company said the third well had beencompleted and initial results were encourag-ing. It stressed that the three-well productionoptimization potential was impressive. Mean-while, the wells have been temporarily sus-pended, pending down-spacing approvalfrom regulatory authorities. Blackrock’s Vice-President of Exploration, Tim Kozmyk, com-mented: “This play has the potential to beone of the largest primary heavy oil discover-ies in western Canada in recent years.”
Norway hopeful of new oil findsBRUSSELS — Hopes have been raised in Nor-way of another major North Sea oil and gasdiscovery, following exploration of areas northof the existing Ormen Lange oil field. Nor-wegian firm TGS-NOPEC, which has beenconducting seismic exploration betweenOrmen Lange and the Helland Hansen fields,has called the area quite promising. The com-pany’s seismic studies indicate hydrocarbonsin an area as large as the Ormen Lange field,which has already proved to be one of thelargest gas fields in the Norwegian sector ofthe North Sea. However, Jarn Christiansen,of TGS-NOPEC, admitted that there was noway of judging the quality of the oil and gasuntil drilling took place.
Shell starts gas output from MalampayaMANILA — Shell Philippines Exploration(SPEX) said last month that it has com-menced the production of natural gas fromthe Malampaya field in the Palawan Sea, thelargest part of the country’s gas to power gen-erating project. A government official saidthat the $4.5 billion project would save thegovernment as much as $670 million in oilimport bills. The gas was delivered through a504-km pipeline from the Malampaya plat-form to an onshore plant capable of process-ing 500m cubic feet/day and then transmittedto the electricity generating complex. The gasfield is being exploited under a 20-year con-tract involving SPEX and its partners, TexacoPhilippines and the Philippines National OilCorporation. SPEX, as the field operator,spent three-and-a-half-years on designing andbuilding the project before the start of gasproduction from the fields. The project willgenerate $8bn–10bn in revenue.
November 2001 25
M E M B E R C O U N T R Y F O C U SAvailable exclusively from OPEC:
The 2000 edition of the OPEC Annual Statistical Bulletin, which has established
itself as the standard reference work on the oil and gas industries of OPEC Member Countries, is now
available exclusively from the Secretariat. Compiled by a team of statistical experts, the ASB contains
an unrivalled wealth of data covering the period until end-2000 on the oil and gas sectors of OPEC's
11 Member Countries, as well as comprehensive coverage of the rest of the world.
For ease of reference, the ASB is divided into five sections, which are:
Packaged with the ASB is a 3.5-inch computer diskette (for Microsoft Windows only) containing all the data in the book and more. Many of the time series in the summary tables in Section 1 are extended back to 1960, the year of OPEC's founding, while much of the data in Sections 2-5 extends back to 1980. The application is simple to install and easy to manipulate and query. The data can also be exported to Microsoft Excel or other spreadsheets.
The OPEC Annual Statistical Bulletin 2000 book plus diskette package costs $85.To order your copy, just fill in the form at the back of the issue, and fax it to OPEC's PR & Information Department
at (+43 1) 214 98 27.
1 Summary tables and basic indicatorsBasic economic indicators in OPEC Member Countries (GDP, population, trade, etc) from 1980-2000. Side-by-side comparisons of
the same period.
EC and non-OPEC
n and production,
ucts, exports and
0.
tione of the oil tanker
er (LPG and LNG)
Member Countries
the world, as well
s for 1996-2000.
ata on all oil, gas
pelines in OPEC
s.
s of the OPEC
nd its components
es for 1991-2000,
on-OPEC) for the
breakdown of the
evron and Texaco.
Tables show revenue, operating costs, taxation, net income and much more.
26 OPEC Bulletin
E N V I R O N M E N T N O T E B O O KE N V I R O N M E N T N O T E B O O K
he resumed Sixth Session of theConference of the Parties (COP6
Part II) to the United NationsFramework Convention on ClimateChange (UNFCCC) was held in Bonn,Germany, from July 18–27, 2001. COP6was expected to complete the implemen-tation of the Buenos Aires Plan of Action(BAPA) adopted by COP4 in 1998 inBuenos Aires, Argentina.
COP6 Part II eventually produced the‘Bonn Agreement’ on a set of issues aimedat ensuring the survival of the Kyoto Pro-tocol. Central to the debate on land usewas the issue of the provision of credit forsinks, seen as the key to ratification byseveral countries, in particular the RussianFederation, Japan, Canada and Australia.
The EU, desperate to reach a compromise,eventually agreed to the demands of thisgroup of countries, although this wasapparently a trade-off for removing nu-clear energy from the Clean DevelopmentMechanism. Additional funding for cli-mate change activities for developing coun-tries was also pledged, with three newfunding mechanisms to be established.
Of these, the proposed ‘Special Cli-mate Change Fund’ is of relevance to theconcerns of the oil-producing developingcountries, since it includes the objective ofassisting with the diversification of econo-mies in countries which may suffer fromthe adverse affects of mitigation measures.The agreement does not identify fundinglevels, nor is it legally binding, but it paves
the way for further negotiation whichshould to some extent address OPECMember Countries’ concerns. The finalagreement on land use, as well as theabsence of a formal ceiling for the use ofthe Kyoto mechanisms, may lead to lessdownward pressure on the demand forenergy in general, and oil in particular.
It has been estimated that the BonnAgreement, together with the absence ofthe USA from any emissions reductionarrangement, could lead to very littlechange in Annex I emissions compared toBusiness as Usual (BAU). The key to theproblem lies in the so-called ‘hot air’ whicharises due to both the FSU and the coun-tries of Eastern Europe having emissionstargets for the year 2010 well beyond what
The OPEC Secretariat established its own Environmen-tal Task Force (ETF) in 1994 to monitor developmentsin the field of energy use and the environment. Itsprincipal objective is to keep OPEC’s Ministers continu-ously informed about the status of the energy/environ-mental debate, as it affects the Organization and itsMember Countries. The ETF’s work is also seen asadding impetus and authority to the discusssions at high-level meetings involving OPEC.
A Quarterly Environmental Report (QER) is circu-lated to Member Countries, in which the ETF reviewsrecent activities in the various international environ-
mental fora, monitors changes in energy taxation, andprovides background information on relevant forth-coming events, etc. Although this is an internalOPEC document, selected extracts from the publicationappear regularly in the OPEC Bulletin for the benefitof a wider readership.
This month’s selection comes from the QER publishedat the end of the third quarter of 2001. It features anextract from the Executive Summary (below), whichcovers the outcome of the resumption of the Sixth Sessionof the Conference of the Parties (COP6 Part II) in Bonnin July 2001.
Sixth Session of the Conferenceof the Parties (COP6 Part II) concludes in
former German capital Bonn
Executive Summary
T
November 2001 27
E N V I R O N M E N T N O T E B O O K
they are expected to reach even with theBAU paths. This would mean that the priceof permits would be driven exceedinglylow. The Kyoto Protocol’s potential im-pact on global greenhouse gas (GHG) emis-sions will be considerably weakened if theUnited States does not participate, be-cause the Protocol would have requiredthe United States to have taken on a rela-tively large share of the abatement com-mitments. A recent study shows that, if theUS was also involved in emission abate-ment and trading, the permit price wouldbe $15 per tonne of carbon dioxide (CO
2)
equivalent, while without the US the pricewould be one third less at only $5/t. Thefall in the permit price in these results isthus somewhat less dramatic than thatpresented in a recent International EnergyAgency (IEA) assessment entitled Whathappened in Bonn? which suggested a per-mit price of $100/t of carbon ($27/t CO
2)
with the USA, falling to only one-tenth ofthat, at $10/t of carbon (below $3/t CO
2)
March 13–15, 2002GLOBE 2002Vancouver Convention and Exhibition Centre, Vancou-ver, BC, Canada. Topics include: atmosphere/climate;ecology; energy; environmental chemistry; global changepolicy; hydrology/oceanography. Contact: Bree Stanlake,504, 999 Canada Place, Vancouver, BC, V6E 3E1, Canada.Tel: +1 604 775 7300; fax: +1 604 666 8321; Web site:www.globe.ca/
March 18–19, 2002Energy: New Era, New GovernanceChatham House, London, England. Contact: The RoyalInstitute of International Affairs, Chatham House 10 StJames’s Square, London SW1Y 4LE, UK. Tel: +44 (0)207957 5754/00; fax: +44 (0)20 721 2045/7957 5710; e-mail: [email protected]; Web site: www.riia.org.
June 3–14, 2002Sessions of the Subsidiary BodiesBonn, Germany. For more information, contact the FCCC
without the USA. Preliminary OPECassessments also suggest the IEA figures tobe rather extreme, with initial estimatessuggesting the fall in the permit price asa result of the USA dropping Kyoto to beto something like 40 per cent of the pricethat would prevail if the USA were in-cluded in trading.
In developments in the science of cli-mate change, it has been estimated that theglobal mean temperature is 90 per centlikely to rise by 3.1–8.8° Fahrenheit (1.7–4.9º C) during the next 100 years, accord-ing to a new analysis that determines theprobability of warming within any speci-fied range based on projections made bythe Third Assessment Report of the Inter-governmental Panel on Climate Change(IPCC).
The IPCC report, recently published,projects that the world will warm by 2.5–10.4° Fahrenheit (1.4–5.8° C) by 2100,but the report does not indicate where inthat broad range the warming is most
likely to occur. Researchers have foundthat the probability of warming at the lowand high ends of the IPCC’s projectedrange is low, but that the rate of warmingis still likely to be ‘very large’ comparedwith that of the past century.
Meanwhile, the US Department ofEnergy announced in July that it will co-fund eight new exploratory projects tostudy ways to capture and store green-house gases. The projects involve a rangeof techniques, including capturing CO
2from the exhaust of power plants, creatingsaleable by-products from captured CO
2,
sequestering CO2 in geological formations
such as coal seams, sequestering CO2 in
forests, and capturing methane fromlandfills. The Energy Department’s Of-fice of Fossil Energy, which will overseethe research, has set a goal of developingsequestration approaches that cost $10 orless per tonne of carbon, equivalent toadding 0.2 cents per kilowatt-hour to theaverage cost of electricity.
August 26–September 4, 2002World Summit on Sustainable Development (Rio +10)Johannesburg, South Africa. The World Summit onSustainable Development for the ten-year review of pro-gress in implementing the outcome of the UN Conferenceon Environment and Development held in Rio in 1992will take place in 2002. The exact dates are yet tobe determined. The Summit will aim to reinvigoratethe global commitment to sustainable development at thehighest level. More information is available at: www.johannesburgsummit.org.
October 23–November 1, 2002Eighth Session of the Conference of the PartiesNew Delhi, India. For more information, contact theFCCC Secretariat. Tel: +49 228 815 1000; fax: +49 228815 1999; e-mail: [email protected]; Web site:www.unfccc.de.
Calendar of meetings
28 OPEC Bulletin
M A R K E T R E V I E W
Table A: Monthly average spot quotations of OPEC Reference Basket and selectedcrudes including differentials $/b
Year-to-date averageSeptember 01 October 01 2000 2001
The monthly price of OPEC’s spot Ref-erence Basket2 plummeted by $4.65/bduring October, losing almost 20 per centof its value during the month. On a year-on-year basis, the value of the Basket wasless than two-thirds of what it was inOctober 2000. Obviously, all theBasket’s components registered consider-able losses. Leading the decline were theBrent-related crudes Saharan Blend andBonny Light, which dipped by $5.48/band $5.38/b, followed by Minas andArabian Light, which fell by $5.06/b and$4.57/b, while Isthmus and Dubai were$4.55/b and $4.44/b lower than in Sep-tember. Tia Juana Light posted the small-est loss of $3.06/b (see Table A).
On a weekly basis, the Basket contin-ued to weaken progressively; however, thedecline was more moderate than the oneseen in the previous month, after the tragicevents of September 11. World marketsremained concerned about faltering de-mand for crude and petroleum products,as a result of the slowdown in the globaleconomy. Early in the month, prices slidon worries of dwindling oil consumption,combined with ample supply. Prices cameunder mounting pressure on the release ofthe US Energy Information Administra-
tion’s monthly Short-Term Energy Out-look, in which the Department of Energy’sstatistical unit slashed its world oil de-mand forecast for the remainder of theyear and the first quarter of 2002. Risinggasoline stocks, reported by the AmericanPetroleum Institute (API), were interpretedby the market as a sign of the slowdownin driving and economic activity. Thedownward path extended to the secondhalf of the month, with benchmark crudeslosing more than $2/b in the week endingOctober 19. Markets came under renewedpressure on concern over the global eco-nomic slowdown, which had been furtherexacerbated by falling consumer confi-dence in the USA and dwindling oil de-mand.
Meanwhile, a mixed API stock report,which showed a large drop in crude oilinventories for the week ending October12 and a slight decline in gasoline stocks,failed to boost prices. The prevailing bear-ish market psychology focused more on areported rise in distillate stocks, which hada more sensitive demand outlook for thecoming heating oil season. Prices contin-ued to deteriorate towards the month-end, amid negative US macroeconomicdata and mild weather. News that the USAdministration was considering expand-ing the Strategic Petroleum Reserve to onebillion barrels and growing expectations
October1
1. This section is based on the OPEC MonthlyOil Market Report prepared by the ResearchDivision of the Secretariat — published inmid-month and containing up-to-date analy-sis, additional information, graphs andtables. Researchers and other readers maydownload the publication in PDF formatfrom our Web site (www.opec.org), providedOPEC is credited as source for any usage.
2. An average of Saharan Blend, Minas, BonnyLight, Arabian Light, Dubai, Tia JuanaLight and Isthmus.
that some action would be taken to re-move excess supply from the market failedto change market sentiment.
US and European marketsUS crude stocks continued to rise
during the month, with oil being addedto storage at a discount of prompt valuesto forward prices. By the end of October,crude oil inventories had reached 304.64mb, almost 23m b higher than in the sameperiod last year. Reduced demand for jetfuel and lower-than-expected consump-tion of gasoline depressed sweet crudeprices. Falling demand for light crudes inthe USA left the transatlantic arbitrage forEuropean grades barely open. On the otherside of the Atlantic, refiners’ demand wasbuoyant, as refineries came out of main-tenance, on good margins as crude pricessoftened. With the exception of gasoline-rich crudes, all North Sea grades foundoutlets trading at premiums to dated Brent.West African grades found an acceptablelevel of demand in the Mediterraneanarea, where refiners’ margins were strong.Russian crudes, especially Urals, met withhealthy demand in North-West Europe,amid higher freight rates for North Seagrades and a lack of Flotta from the UK.
Far Eastern marketsDemand for Middle East sour grades
November 2001 29
M A R K E T R E V I E W
in the Asia-Pacific firmed slightly on theback of improving refiners’ margins dur-ing the first half of the month. Murbancrude gained some 20¢/b relative to itsofficial selling price; nonetheless, it tradedwell into discount territory. However, sen-timent deteriorated when China resumedselling part of its medium-sour crude stocks(Oman).
Towards the end of the month, Omancargoes for December delivery came underpressure, falling to considerable discountsto its official selling price as the overhangof remaining November cargoes kept end-users (refiners) holding back in anticipa-tion of weaker prices. Meanwhile,sentiment about Abu Dhabi grades foundsome support at the end of the month,following cuts of up to seven per cent inDecember term allocations.
Product markets andrefinery operations
Product prices were sharply lower inOctober, driven more than anything elseby tumbling crude markets amid thegloomy world economy and, with it, loweroil demand. Gasoil, however, retained itsseasonal premium over gasoline. Refiners’margins were healthy in Rotterdam, turnednegative in the US Gulf and fluctuatedfrom break-even to moderate gains in Sin-gapore. Consequently, refinery through-put fell slightly in the USA, while itincreased in Europe (see Table B).
US Gulf marketUS Gulf product markets plummeted
in October, driven mainly by the sizeablelosses in crude markets in the wake ofconcern over oil demand, which had fallenas consequence of the world economicslowdown and prevailing light productstock-builds, most notably during the pasttwo months.
Gasoline, for example, lost heavily,falling by $7.38/b amid plentiful supply,as a result of refiners boosting production,together with sustained strong importflows, while the monthly growth, as wellas the yearly difference, in demand forgasoline, based on preliminary govern-mental data on a four-week moving aver-age, were marginally up. Continuouslyrising distillate stocks and a 2.7 per cent
Rotterdam marketIn October, the collapsing US gasoline
price weighed heavily on European mar-kets, which experienced a considerableloss of $6.26/b, as a reflection of fallingcrude markets and persistently saggingregional demand. Demand for distillateswas relatively strong, led by two drivingforces: first, Germany’s switch to cleanerdiesel specifications on November 1; and,secondly, robust European demand forheating oil to replenish inventories aheadof the winter season, induced by lowerprices, with the gasoil price declining by$3.46/b. Fuel oil dropped by $4.20/b, ona number of depressing factors, includingweak refinery demand for alternativefeedstocks, as a consequence of tumblingcrude prices, and lower exports to the
Table C: Refinery operations in selected OECD countries
1. Refinery capacities used are in barrels per calendar day. na Not available.2. European Union plus Norway. R Revised since last issue.Sources: OPEC Statistics, Argus, Euroilstock Inventory Report/IEA.
retreat in demand, compared with theprevious month’s level, were the mainreasons for the sharp decline of $4.72/b inthe gasoil price. Fuel oil tracked the sharpfall in the crude market and hence fell bya significant $4.20/b, amid fairly mildweather and easing natural gas prices,which, in turn, stifled utility-buying.
Refiners’ margins in the US Gulfswitched to negative territory, as the steepfalls in product prices, most importantlygasoline, outpaced the declines in the crudeprice (see Table B).
US refinery throughput was down, bya marginal 28,000 b/d, to around 15.33mb/d. The corresponding utilization ratewas 92.7 per cent, which was one percent-age point lower than the year-earlier figure(see Table C).
also led to a sell-off in the gasoline marketthe next day, thereby removing most ofthe previous day’s gains.
The tanker market
OPEC area spot-chartering decreased by550,000 b/d to a monthly average of11.66m b/d in October, affected by lowoil demand and high stock levels, whichweighed on prices and encouraged OPECMember Countries to improve their com-pliance to prevent further price falls.Compared with the previous year’s level,the current volume of OPEC fixtures waseven lower, by 3.14m b/d. Meanwhile,non-OPEC fixtures compensated forOPEC’s reduction, rising by 480,000 b/dto 7.83m b/d. Consequently, global spot-chartering moved slightly lower, by 70,000b/d, to a monthly average of 19.49m b/d;however, this volume was 4.00m b/d belowlast year’s level, reflecting the current glo-bal economic weakness. The OPEC area’sshare of global spot-chartering declined by2.60 percentage points to 59.82 per cent,which was 3.18 percentage points belowthe previous year’s share. Spot fixturesfrom the Middle East on the eastboundlong-haul route fell by 1.14m b/d to 3.10mb/d on dwindling Asian demand, while,on the westbound route, fixtures declinedby 190,000 b/d to 1.99m b/d.
Therefore, the Middle East eastboundand westbound shares of total OPEC fix-tures worsened by 8.11 percentage pointsto 26.56 per cent and by 0.70 percentagepoints to 17.04 per cent, respectively;together, they accounted for 43.60 percent of total chartering in the OPEC area,which was 8.89 percentage points lowerthan in the previous month. Preliminaryestimates of sailings from the OPEC arearose by 1.18m b/d, or 5.29 per cent, to amonthly average of 23.45m b/d. Sailingsfrom the Middle East improved by 1.20mb/d to a monthly average of 16.93m b/d,which was about 72.20 per cent of totalOPEC sailings. Arrivals in the US GulfCoast, the East Coast and the Caribbeandeclined in October by 1.12m b/d to amonthly average of 7.29m b/d. Arrivals inNorth-West Europe also decreased, by570,000 b/d to 6.08m b/d, while, toEuromed, they rose by 940,000 b/d to5.61m b/d. The estimated oil-at-sea on
Asian market for the second consecutivemonth. The relative weakness of Brentprices, combined with less steep falls inEuropean distillate prices, compared withother world distillate markets, were citedas the main reasons for a gain in refiners’margins (see Table B).
Responding to healthy margins, refin-ery throughput in the Eur-16 (EU +Norway) rose by 380,000 b/d to 12.21mb/d. Therefore, the utilization rate rose to89.5 per cent, which was nearly threepercentage points above the previousmonth’s level, yet about three percentagepoints less than that of the preceding year(see Table C).
Singapore marketAfter gains in the previous two months,
product markets in Singapore fell heavilyin October. Gasoline was hit the most,with a loss of $7.24/b, undermined bysluggish regional demand. Indonesia hadlower-than-usual monthly requirementsand Vietnam covered its needs until theend of the year, both countries being themain two buyers. The distillate marketwas characterized by ample supply, at atime of waning regional demand. Further-more, an influx of Middle East cargoes,following the closure of European desti-nations, exacerbated the fall in the gasoilprice, which lost $3.91/b. Fuel oil plungedby $3.13/b, tracking a slumping bench-mark crude. Reduced imports by China,which recently switched its favourite sup-plier, South Korea, added to the bearishsentiment (see Table C).
Unlike its impact on US refiners’margins, the enormous decline in thegasoline price had a minor effect on Dubaimargins in Singapore, due to the crude’slower yield of gasoline and regional hydro-skimming refineries, with their high yieldof fuel oil, whose price in Singapore re-mained above that of the rest of the world.This, together with another steeper fall inthe marker crude price, constituted themain factors for Dubai’s increasing margin.
In Japan, refinery throughput reversedthe uptrend it had sustained during theprevious two months, falling by 88,000b/d to 4.05m b/d, reflecting discretionaryrun cuts because of weak refiners’ margins.Thus, the equivalent utilization rate alsodipped, to 81.7 per cent, which was 1.74percentage points below the August level,
but 1.5 percentage points higher than inthe corresponding period last year.
The oil futures market
NYMEX WTI remained in contango formost of October, while the outer month(12th) was near the value of the frontmonth. After an initial rise at the begin-ning of the month, as war premiums werebuilt in and short-covering was staged,WTI experienced a continuous price de-cline throughout the first week. The de-cline was caused by, first, increasingcertainty that demand would be lower anddecreasing certainty of supply losses, andsecondly, an increase in US crude oil stocks.
WTI started the second week with adrop of 29¢/b to $22.93/b, due to fund-selling, as confusion regarding the possi-bility of another OPEC Meeting wasovershadowed by the bad economic out-look. Prices then started a slight climb,helped by a draw on US inventories anduncertainty about the scope of US militaryaction in Afghanistan. However, the rallywas capped by pressure from weak prod-uct prices. A big jump of 81¢/b at the endof the week came in response to reportsthat Saudi Arabia was cutting crude allo-cations to European customers.
The third week witnessed a continu-ous decline that took WTI from $22.50/bto $21.31/b, a level not seen since October1999. Two factors contributed to thedownslide: first, an International EnergyAgency report, which cut the demandforecast for the rest of this year by 400,000b/d; and, secondly, US economic data,which showed the four-week moving av-erage of unemployment rising. However,the main sentiment in the market wasbearish, since it was clear that there wouldbe over-supply unless producers acted.
After pre-weekend short-covering earlyin the fourth week, triggered by uncer-tainty over OPEC’s action, WTI re-sponded mainly to the US product marketand API data. A build in US crude oilstocks caused a continuation of an earliersell-off in the crude market. Data showedthat refiners were still producing moregasoline than distillates, thereby prevent-ing the seasonal build of heating oil, andthis triggered a rally in heating oil thatpulled crude higher with it. However, this
November 2001 31
M A R K E T R E V I E W
October 21 was 476m b, which was 31mb above the level observed at the end of lastmonth.
The VLCC tanker market retreated inOctober, after enjoying a positive trendlast month, influenced by thin loadingvolumes of crude oil combined with sur-plus tonnage in the Middle East, whichpushed rates down. Furthermore, themarket remained in uncertainty, as the oiltrade was undermined by the global eco-nomic slowdown and an expected OPECproduction cut at its November 14 Con-ference. Thus, VLCC freight rates onMiddle East eastbound and westboundlong-haul routes declined steadily, achiev-ing monthly averages of Worldscale 62and W54, respectively, 13 points and 15points below the respective levels of theprevious month. During the first half ofthe month, Suezmax markets in WestAfrica and North-West Europe were ac-tive, boosted by reasonable levels of en-quiry, which enabled tanker owners toraise rates. However, in the second half ofthe month, rates retreated significantly tocorrect the wide gaps between VLCC andSuezmax freight rates, as charterers triedto combine cargoes on cheaper VLCCtankers. The monthly average Suezmaxfreight rates for crude shipped from WestAfrica and North-West Europe to the USGulf Coast rose by ten points to W103and by eight points to W102, respectively.The Aframax market displayed mixedtrends, remaining weaker in the Mediter-ranean, but picking up in the Caribbean.Freight rates on the short-haul route acrossthe Mediterranean and from the Mediter-ranean to North-West Europe declinedfurther, by five points to W136 and bythree points to W133, respectively. Mean-while, rates surged by 42 points to W211on the route from the Caribbean to the USEast Coast. Rates for 70–100,000 dwttankers on the Indonesia-US West Coastroute declined for the third consecutivemonth, by seven points to W111.
Seasonal winter demand for producttankers in the Asian market picked up inOctober and freight rates for cargoes fromthe Middle East and Singapore to the FarEast rose by 37 points to W240 and 41points to W246, respectively. On the routeacross the Mediterranean, clean tankerfreight rates edged seven points higher toW236, while, on the route from the
Mediterranean to North-West Europe,they softened by eight points to W230, asmost European countries consideredswitching to ultra-low sulphur fuel. Ratesalso softened on the route from North-West Europe to the US Gulf Coast, de-clining by six points to W229. Producttanker markets in the Caribbean stabi-lized, as freight rates to the US Gulf Coastnearly maintained the previous month’slevel of W224, being only one point lower.
World oil demand
Projections for 2001
WorldFor the present year, the projection for
world oil demand has undergone minoradjustment, compared with what waspresented in the last report. Consumptionis now estimated to rise by 230,000 b/d,or 0.30 per cent, to average 75.94m b/d.This very low year-on-year increment iscomparable to that of 1998, when thedemand growth was only 210,000 b/d,equivalent to 0.30 per cent. On a regionalbasis, demand is projected to decrease by160,000 b/d in the OECD, but to increaseby 190,000 b/d in developing countriesand by 200,000 b/d in the ‘other regions’(former CPEs).
On a quarterly basis, compared withthe year-earlier figure, world demand grewby 0.74 per cent, or 560,000 b/d, toaverage 76.24m b/d in 1Q. It is estimatedto have grown by 1.34 per cent, or 990,000b/d, to average 74.99m b/d in 2Q. Thefinal two quarters, however, are expectedto experience negative growth. The rea-sons are decelerating economic growth in3Q and 4Q and declining jet fuel con-sumption in 4Q. 3Q demand is now es-timated at 75.94m b/d, about 220,000b/d, or 0.29 per cent, less than that of3Q00. Likewise, 4Q demand is expectedto be 76.59m b/d, nearly 410,000 b/d, or0.54 per cent, less than that of 2000.
OECDHaving grown by as little as 0.3 per
cent last year, OECD product deliveriesare projected to post a decline of 160,000b/d, or 0.3 per cent, to 47.67m b/d in2001. This drop would be the sum of a40,000 b/d, a 80,000 b/d and another
40,000 b/d decline in North America,Western Europe and OECD Pacific, re-spectively. In addition to the weakeningGDP growth rate prospects in all threeOECD regions, especially the OECDPacific, the estimated lower jet fuel con-sumption, particularly in the USA, will beresponsible for the overall lower demandin the region. Our estimated GDP growthrates for North America, Western Europeand the OECD Pacific were revised downby 0.24 per cent, 0.14 per cent and 0.18per cent, respectively last month. BothOECD Europe and OECD Pacific GDP
growth rates have again been revised downby 0.1 per cent. These estimated growthrates now stand at 1.7 per cent and –0.2per cent, respectively.
Inland delivery of petroleum productsin North America during the first eightmonths of the current year, according tothe latest figures, grew by 0.54 per cent,or 120,000 b/d, to average 22.39m b/d.Demand in Western Europe inched up,posting a rise of 0.81 per cent, or 122,000b/d, during the same period. However,OECD Pacific demand displayed a 0.85per cent decline, or 740,000 b/d, duringJanuary-August.
Developing countriesOil demand in developing countries
has again been revised down slightly for2001. It is now expected to rise by 190,000b/d, or 1.0 per cent, to average 18.85mb/d for the year. The estimated growth ratein consumption has been lowered for theAsian group of countries from the previ-ous 0.3 per cent to 0.2 per cent. Thefundamental factor behind the lower de-mand outlook is that Asian regional GDP
is projected to grow at a substantiallylower-than-anticipated rate. These econo-mies are highly export-dependent and areextremely reliant upon the health of theirtrading partners. The demand growth ratesfor Latin America and Africa have alsobeen revised down.
Other regionsApparent demand in the former CPEs
is projected to grow by 200,000 b/d, or2.2 per cent, to average 9.42m b/d for2001. Revisions to the trade and produc-tion data for 1Q show that apparent FSUdemand grew by 7.4 per cent, or 270,000b/d, compared with the year-earlier figure.
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The latest assessments indicate that therehas been growth of 2.8 per cent, or 100,000b/d, in 2Q. We anticipate a negligible risein apparent consumption in 3Q, coupledwith a minor decline of 0.7 per cent, or30,000 b/d, in 4Q, due to a rise in the levelof exports that will outpace any gain inproduction. During 1Q and 2Q, net ex-ports were 320,000 b/d and 510,000b/d higher than in the corresponding quar-ters of 2000. 3Q could register a 310,000b/d gain. High international oil prices, theneed for more revenue, in order to serviceinternational loans, and the switch tonatural gas continue to undermine inter-nal consumption. Indigenous productionand trade data for the first three monthsof the year shows a considerable drop inChinese apparent consumption. Accord-ing to the latest figures, apparent demanddeclined by 7.5 per cent during 1Q. Eventhough the decline seems huge, one shouldnot forget that this comparison is madewith 1Q00, when demand surged by 17per cent to reach a 1Q record level. 2Qapparent demand, however, demonstrateda significant rise of 12.3 per cent. This isin line with the considerable recovery intotal imports, which registered an impres-sive 44.4 per cent rise in 2Q. 3Q and 4Qconsumption are expected to registerhealthy gains of 2.30 per cent and 4.35 percent, respectively. Due to the size and theimportance of China in the overall de-mand picture, we shall continue to moni-tor closely further developments.
Forecasts for 2002Due to a further downward revision to
the world economic growth rate, all quar-terly forecasts have been revised down.However, the anticipated lower jet fuelconsumption has been applied only to 1Qfigures. As a result, the 2002 world de-
mand forecast has been revised downslightly to 76.45m b/d, compared with theprevious forecast of 76.52m b/d. Theaverage yearly increment now stands at510,000 b/d, or 0.7 per cent, comparedwith 580,000 b/d, equivalent to 0.8 percent, as noted in the previous report.
The estimated 2002 growth level iscomparable to the 600,000 b/d (equiva-lent to 0.8 per cent) experienced in 2000,but it is significantly higher than that of2001. However, this assessment might besubject to further adjustment, as moreinformation becomes available on majorfactors, such as the economic growth out-look, the trend in air travel and jet fuelconsumption, prices and the weather.
World oil supply
Non-OPEC
Figures for 2001The 2001 non-OPEC supply figure
has been revised up by 50,000 b/d to46.40m b/d, the quarterly distributionfigures for 1Q and 2Q remain unchangedat 46.28m b/d and 46.02m b/d, while 3Qand 4Q have been revised up by 70,000b/d and 120,000 b/d to 46.43m b/d and46.89m b/d, respectively, compared withthe last report’s figures. The yearly averageincrease is estimated at 620,000 b/d, com-pared with the 2000 figure.
Expectations for 2002Our 2002 non-OPEC supply forecast
has been revised up by 50,000 b/d sincethe last report, compared with the figureestimated for 2001. It now shows an in-crease of 1.00m b/d to 47.41m b/d, witha quarterly distribution of 47.27m b/d,47.02m b/d, 47.43m b/d and 47.90mb/d, respectively.
The FSU’s net oil export forecast for2001 has been revised down by 10,000b/d to 4.55m b/d, compared with the lastreport, while that for 2002 has been re-vised up by 30,000 b/d to 4.97m b/d.
OPEC natural gas liquidsThe OPEC NGL figures for 1998–2001
remain unchanged at 2.78m b/d, 2.86mb/d, 2.98m b/d and 3.01m b/d, respec-tively, compared with the last report, whilethe forecast for 2002 stays at 3.04m b/d.
that, in October, OPEC output was26.82m b/d, which was 140,000 b/d lowerthan the revised September level of 26.96mb/d. Table E shows OPEC production, asreported by selected secondary sources.
Stock movements
USAUS commercial onland oil stocks wit-
nessed a marginal draw of 3.9m b, or140,000 b/d, to 1,023.5m b during Oc-tober 5–November 2. This draw was largelyconfined to a substantial decrease of 13.7mb to 206.0m b in ‘other oils’, while jet fueldeclined by 3.5m b to 40.5m b on reducedoutput. However, crude oil, which rose by4.5m b to 311.9m b, followed by othermajor product inventories, especially dis-tillates, which increased by 3.6m b to128.2m b, diminished the overall draw.Lower refinery runs, due to poor refiners’margins, were mainly behind the build incrude oil stocks, while stagnant demandpushed up distillates. Gasoline and fuel oilalso registered minor builds of 800,000 bto 206.9m b and 2.1m b to 38.8m b,respectively. Total stocks were 80.8m b,or about nine per cent, higher than lastyear’s level.
During the same period, the US Stra-tegic Petroleum Reserve (SPR) moved up
Table I: Estimated stock movements in OECD1 in 3Q01 m b
Change Sept 01/June 01June 01 Sept 01 m b m b/d
USA 1,012.4 1,027.4 15.0 0.16Eur-16 1,072.8 1,051.6 –21.2 –0.23Japan 195.1 197.5 2.4 0.03OECD total 2,280.3 2,276.5 –3.8 –0.04
1. Includes USA, Eur-16 and Japan only. Data as at end of month.
overall stock level was 20.6m b, or about12 per cent, above last year’s figure (seeTable H).
OECDIn 3Q, OECD commercial onland oil
stocks (the USA, Eur-16 and Japan) areestimated to have registered a minor con-tra-seasonal draw of 3.8m b, or 40,000b/d, to 2,276.5m b, compared with 2Q.This slight draw was confined to Eur-16stocks, as they fell by 21.2m b, or 230,000b/d, to 1,051.6m b, while the build in USstocks of 15.0m b, or 160,000 b/d, to1,027.4m b and, to a lesser degree, inJapanese stocks of 2.4m b, or 30,000b/d, to 197.5m b, counterbalanced thisdraw, as shown in Table I.
Balance of supply/demand
No revisions have been made to the figurefor world oil demand in 2001 since lastmonth, while non-OPEC oil supply hasbeen revised up by less than 100,000 b/d,and these two figures are now put at 75.9mb/d and 49.4m b/d, respectively. The yearlyaverage difference has been revised downby less than 100,000 b/d to 26.5m b/d,with quarterly distributions of 27.0m b/d,26.0m b/d, 26.5m b/d and 26.7m b/d,respectively. The balances for 1Q and 2Qremain unchanged at 1.1m b/d each, while3Q has been revised up by around 100,000b/d to 700,000 b/d. The 2000 balanceremains unchanged at 1.0m b/d, com-pared with last month.
Table I shows a downward revision tothe world oil demand forecast for 2002 ofaround 100,000 b/d to 76.4m b/d, whiletotal non-OPEC supply has been revisedup by around 100,000 b/d to 50.4mb/d. The expected annual difference isaround 26.0m b/d, which is down byaround 100,000 b/d, compared with thelast report, with a quarterly distribution of26.2m b/d, 25.2m b/d, 25.9m b/d and26.8m b/d, respectively.
marginally, by 400,000 b to 545.2m b (seeTable F).
Western EuropeCommercial onland oil stocks in Eur-
16 in October rose by just 600,000 b, or20,000 b/d, to stand at 1,052.2m b. Thisrise resulted mainly from a build in dis-tillates of 4.7m b to 328.1m b, due tosluggish jet fuel demand. Fuel oil alsocontributed marginally to this build, ris-ing by 1.3m b to 122.3m b on closedarbitrage to Asia and the USA. Draws oncrude oil of 2.5m b to 434.1m b, onincreasing refinery runs, and on gasolineof 2.4m b to 142.2m b, as the openedarbitrage started to attract traders to moveEuropean gasoline cargoes to US markets,nearly counterbalanced the build in distil-lates and fuel oil. The overall level was14.1m b, or about one per cent, lower thanthe year-ago figure (see Table G).
JapanIn September, commercial onland oil
stocks in Japan continued to show a build,as they rose by 6.8m b, or 230,000 b/d,to 197.5m b. A build in crude oil stocksof 3.0m b to 118.0m b, as refinery through-put fell due to weak refiners’ margins, and,to a lesser degree, in middle distillates of2.6m b to 45.7m b, followed by 1.1m bto 19.9m b in fuel oil, contributed mainlyto this build, while gasoline declinedslightly by 100,000 b to 13.8m b. The
November 2001 35
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Table J: World crude oil demand/supply balance m b/d
Note: Totals may not add up due to independent rounding.1. Secondary sources.2. Stock change and miscellaneous.
Table J above, prepared by the Secretariat’s Energy Studies Department, shows OPEC’s current forecast of world supply and demand foroil and natural gas liquids.
The monthly evolution of spot prices for selected OPEC and non-OPEC crudes is presented in Tables One and Two on page 40, whileGraphs One and Two (on pages 39 and 41) show the evolution on a weekly basis. Tables Three to Eight, and the corresponding graphson pages 42–47, show the evolution of monthly average spot prices for important products in six major markets. (Data for Tables 1–8 isprovided by courtesy of Platt’s Energy Services).
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Graph 1:Evolution of spot prices for selected OPEC crudes,
1. Tia Juana Light spot price = (TJL netback/Isthmus netback) x Isthmus spot price. na not available2. OPEC Basket: an average of Saharan Blend, Minas, Bonny Light, Arabian Light, Dubai, Tia Juana Light and Isthmus.Kirkuk ex Ceyhan; Brent for dated cargoes; Urals cif Mediterranean. All others fob loading port.Sources: The netback values for TJL price calculations are taken from RVM; Platt’s Oilgram Price Report; Reuters; Secretariat’s calculations.
2000 2001Member Country/ Nov Dec Jan Feb Mar Apr May June July Aug Sept Octobertype of crude (API°) 4Wav 4Wav 5Wav 4Wav 4Wav 4Wav 5Wav 4Wav 5Wav 4Wav 4Wav 1W 2W 3W 4W 5W 5Wav
2000 2001Country/ Nov Dec Jan Feb Mar Apr May June July Aug Sept Octobertype of crude (API°) 4Wav 4Wav 5Wav 4Wav 4Wav 4Wav 5Wav 4Wav 5Wav 4Wav 4Wav 1W 2W 3W 4W 5W 5Wav
M E M B E R C O U N T R Y F O C U SM E M B E R C O U N T R Y F O C U S
opecna news desk ... from the opecna news desk ... from the opecna
UAE’s $1.2 billion petrochemicalproject at Ruwais nears completion
Abu Dhabi — The $1.2 billion petrochemical project atRuwais, near Abu Dhabi, is on schedule, with commercialproduction due to start in December and exports to follow inJanuary 2002, a top official confirmed last month.
The Chief Executive Officer of the Abu Dhabi PolymersCompany (known as Borouge), Joost Schrevens, said the pet-rochemical complex was almost ready to start producing.
“First products will come out of the units in December andexports are scheduled to start in January 2002,” he was quotedby Dubai’s English-language newspaper, Gulf News, as saying.
The complex consists of a 600,000 tonnes/year ethylenecracker unit and two Borstar bimodal polyethylene plants,which will have a combined production of 450,000 t/y.
At a recent board meeting held recently, the companydecided that Middle Eastern markets would be better served interms of exports than had been originally planned.
“We discovered the Middle Eastern markets have becomemore important and one-third of the production will go to thesemarkets,” Schrevens said, adding that the rest would be mainlyexported to Asia and a small portion to Europe.
“By having our own plant in the Middle East, Borouge willbe in a better position to sell directly to customers in the MiddleEast, the Indian sub-continent, China, south-east Asia, andAustralia,” added the CEO of the Singapore office of Borougeresponsible for marketing, Teuvo Kulmala.
The plant at Ruwais will specialize in producing high-end,high-performance bimodal polyethylene using Borealis’ propri-etary Borstar process to meet the exacting needs of the pipeindustry.
Borouge was set up in 1998 as a joint venture between theAbu Dhabi National Oil Company (ADNOC), with a 60 percent stake, and the Copenhagen-based Borealis (40 per cent),Europe’s second largest producer of polyolefins.
The complex at Ruwais is the UAE’s first significant down-stream petrochemical investment project and is the only Borstarbimodal polyethylene facility in the Middle East and AsiaPacific.
Norwegian delegation visitsNigeria for co-operation talks
Abuja — A four-member delegation from the NorwegianAgency for Development Co-operation (NORAD) held talkswith Nigerian government officials in Abuja last month.
They discussed areas of co-operation and assistance thatNorway could give to Nigeria, especially in the elimination ofgas flaring.
The Nigerian Minister of State for the Environment, DrImeh Okopido, said the visit was a follow-up to the memoran-dum of understanding (MOU) signed in February last yearbetween the two countries, when the Nigerian President,Olusegun Obasanjo, made a state visit to Oslo.
He noted that an international seminar on gas flaring,organized this year by the Royal Norwegian Ministry of Inter-national Development, was aimed at supporting efforts to endgas flaring and to maximize the benefits for poverty eradication.
The seminar selected Nigeria as a key beneficiary for pilotprojects on natural gas utilization.
“Today, we are happy to note that the World Bank hasaccepted to take the global initiative on the flaring of gas … inclose co-operation with the Norwegian Government and allinterested parties,” Okopido remarked, adding that Nigeria andNorway would also collaborate on air pollution control.
“The Ministry is seeking collaboration and support from theGovernment of Norway in organizing a national air qualitytraining workshop,” he observed.
The leader of the Norwegian delegation and Ambassador toNigeria, Dag Nissien, said the MOU signed between the twocountries addressed possible co-operation in good governance,industrial development, oil and gas, and technology transfer, aswell as the environment, particularly related to the petroleumand oil and gas sectors.
He added that the memorandum had also been extended toencompass co-operation in the health sector.
Norway would soon sign an agreement with the UnitedNations Children’s Fund (UNICEF) to assist in Nigeria’s nationalimmunization programme, Nissien said.
Iran sees 32 per cent rise invalue of petrochemical exports
Tehran — Iran’s exports of various petrochemical productsduring the first seven months of the current Iranian year (startingon March 21, 2001) fetched the country $530 million, accord-ing to a senior petrochemical industry official.
Quoted by the daily newspaper Jomhouri-e Eslami, theofficial, who declined to be named, commented: “The figureindicates an increase of 32 per cent, compared with the corre-sponding period the previous year.”
He said the petrochemicals were mainly exported to Italy,Spain, the United Arab Emirates, Singapore, Japan, India,China, Turkey and Egypt.
The official predicted that by the end of the current Iranianyear in March 2002, the country’s exports of petrochemicalproducts would be worth $900m.
He noted that cheap labour, as well as an abundant amountof raw materials, had provided the country with an opportunityto export various petrochemical products.
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Algerian foreign exchangereserves reach $17.7bn
Algiers — Algeria’s foreign exchange reserves reached $17.7billion in October 2001, compared with $15.24bn in June and$11.70bn at the end of 2000, it was disclosed in the country’scapital.
The country’s Minister of Finance, Mourad Medelci, re-vealed the figures in a speech to Parliament on the maineconomic results realized by the country so far in 2001.
He said there had been a noticeable decline in Algeria’sexternal debt, which stood at $22.5bn in 2001, compared with$25.2bn in 2000.
The government’s budgetary objectives would be reachedwith a reduction in the deficit to about $325 million, insteadof the $620m that was expected in the 2001 bill, he observed.
However, Medelci noted that, in spite of these positiveresults, estimates for 2001 indicated a rate of growth below theobjective of 3.5 per cent set for the year.
The country’s rate of inflation was also expected to risebeyond expectations, since it was moving upwards by about 3.1per cent, compared with one per cent in 2000.
Medelci also outlined the 2002 finance bill, which wascounting on a rise in budgetary receipts of $19bn, an increaseof 3.8 per cent over 2001.
He noted that the rise would result from a nine per centincrease in petroleum taxation and a 5.5 per cent hike in ordinarytaxation.
Saudi Arabia may post surplusfor second year running
Dubai — Saudi Arabia is set to post its second consecutivebudget surplus in 2001, while cash reserves have surged to theirhighest level in two decades.
The Kingdom has forecast a balanced budget for 2001, butexperts expect a surplus, albeit smaller than last year’s.
“There could be a balance between revenue and expenditureby the end of the year, but the more likely scenario is that therewill be a surplus,” a Saudi Arabian economist, Ihsan Bu Huleika,was quoted by the English-language newspaper, Gulf News, assaying.
“I think it will be a small surplus, unlike that recorded lastyear. The reason is that revenue will be lower than last year’searnings by around 10 per cent.”
Bu Huleika ruled out a large increase in actual spending onthe grounds that Riyadh was “seeking financial and economicstability in its reform programmes.”
He commented: “I also don’t see any need for overshootingspending because the government has projected high expendi-ture and there is little that requires overspending.”
Buoyed by strong oil prices, Saudi Arabia boosted spendingby around $5.0 billion in 2000, but a projected deficit of $7.5bnturned into a surplus of nearly $12bn.
This was a result of an increase of more than $20bn in publicrevenue after crude prices leapt to their highest average in 20years.
Actual revenue was officially put at around $66bn in the year2000 and experts believe they would decline to around $60bnin 2001.
This meant there could be a $3.0bn surplus if the govern-ment stuck to its level of spending, most of which was in currentexpenditure.
The previous year’s surplus was the first since the end of theoil boom in the early 1980s. Such a development allowed thegovernment to control its debt and at the same time boost cashreserves to more than $16bn at the end of August, comparedwith around $7.0bn at the end of 1998.
Forecasts by the local National Commercial Bank showedthat Riyadh would also enjoy a current account surplus for thesecond year running, while it was likely the economy would growby nearly five per cent in nominal terms, compared with 15 percent the previous year.
The past three years were in sharp contrast to 1998, whenSaudi Arabia and other major oil producers reeled under thecollapse in oil prices because of lower global demand, mainlyin Asia after the financial crisis in the region.
The Kingdom’s revenues sank to around $34bn, one of theirlowest levels ever recorded, and such a collapse opened thegovernment’s eyes to the fact that there would be no alternativethan to restructure the economy.
“Despite the improvement in oil prices, I am sure theKingdom is serious about reforms,” Bu Huleika said.“The government has sacrificed more than 5.0bn rials a year bycutting customs tariffs ... this underscores its commitment toreform programmes and the inevitability to manage the eco-nomic and fiscal policies in a way that will serve the nationaleconomy,” he observed.
Arab states must co-ordinate effortsto boost petrochemical industries
Cairo — The Arab petrochemical industry may be hinderedby the monopolization of technology by international compa-nies through patent rights, which discourage technology transferto developing countries, according to a recent report.
The study, by the Beirut-based Centre for Arab UnityStudies, said that Arab countries must co-ordinate their policiesin the production of petrochemicals.
The Centre said similar projects must be merged and mar-keting techniques should be unified, in order for the industryto compete internationally.
The report noted that the petrochemical industry dependedhighly on developed technology, which was usually protectedby patent rights, and, therefore, oil-producing countries wereexpected to pay very high prices to obtain that technology.
The payment of these high prices would negatively affectArab countries when competing in international markets, theKuwait News Agency quoted the study as saying.
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According to the report, the monopoly by internationalcompanies over patents was becoming more pronounced as itwas in line with the 1994 General Agreement on Tariffs andTrade (GATT), which protected intellectual rights.
Iran, Kuwait to forge closerco-operation in energy
Kuwait — Iran and Kuwait have expressed interest in pro-moting and enhancing the level of bilateral co-operation inenergy and engineering technology.
The fifth session of the Iran-Kuwait Joint Economic Com-mission was told of Iran’s willingness to provide Kuwait withtechnical and engineering services, a proposal that was acceptedby the Kuwaiti delegation last month.
Iran indicated its interest to participate in the developmentof Kuwaiti water and sewage projects, as well as training Kuwaitisin aspects of water, electricity and sewage engineering.
The two countries also agreed to work together in theexchange of information and irrigation systems, the officialIslamic Republic News Agency (IRNA) reported.
Earlier, the Iranian economic delegation, at a meeting withthe Kuwaiti Chamber of Commerce and Industry, stressed theneed for the state and private sectors on both sides to worktogether towards the promotion of trade co-operation.
The Iranian Deputy Minister of Commerce, Abdul-HosseinVahaji, said the two sides hoped to address the problems raisedat the talks since they affected the bilateral trade levels betweenthe countries.
Algerian President in South Africafor joint commission meeting
Algiers — Algerian President, Abdelaziz Bouteflika, engagedin a four-day visit to South Africa last month, where he chaireda high-level joint commission with his South African counter-part, Thabo Mbeki.
The visit was intended to strengthen bilateral relations andincrease co-operation over a wide range of issues between thecountries, the South African Department of Foreign Affairs saidin a statement.
Bouteflika was accompanied on his visit by nine ministers,including the Algerian Minister of Energy and Mines, DrChakib Khelil.
Several bilateral agreements were signed, coving co-opera-tion in sectors including trade, science and technology, mer-chant shipping, air services, animal health, mining, energy andcommunications technology.
According to official sources in the Algerian capital, energysector joint projects were among the main schemes to be exam-ined by the two parties, including joint gas exploration in SouthAfrica.
The schemes would fall within the Algeria-South Africa
Energy Co-operation Agreement concluded by the Algerianstate oil and gas company, Sonatrach, and the South AfricanCentral Energy Fund.
This accord followed the identification of partnership op-portunities by Sonatrach and the South African firms, Mosgasand Soeker.
Planned projects were intended to cover the exploration,production, transformation and marketing of hydrocarbons, aswell as joint schemes in petrochemicals and refining.
Algerian and South African firms have agreed in principleto jointly build a 900-km gas pipeline linking Kydu in Mozam-bique to Cape Town in South Africa.
The companies also envisage setting up a joint oil and gasfirm to operate in Gabon, Chad, Angola, and Iraq, while it isintended that another subsidiary would market hydrocarbonproducts in South Africa.
SABIC net profit falls by37 per cent to $501m
Riyadh — The Saudi Basic Industries Corporation (SABIC)announced a drop in net profit of 37 per cent to $501 millionin the first nine months of 2001, which the company attributedto low product prices.
The 70 per cent government-owned company made a netprofit of around $800m in the first nine months of 2000.
SABIC Managing Director, Muhammad Al-Madi, said thefall in profits was due to low prices for products — mainlypetrochemicals, fertilizers, plastics and steel.
A company statement said that sales reached a value of $6.13billion by the end of September, up from $5.07bn in the sameperiod last year.
It also noted that total production had climbed to 26.3mtones, up from 20.6m t one year earlier.
Indonesian Parliament okaysstate budget for year 2002
Jakarta — Indonesia’s House of Representatives has ap-proved the government’s state budget for 2002, which will besupported by projected state revenues of around $30 billion, itwas revealed in the Indonesian capital last month.
Expenditure in the budget has been put at $34.4bn, resultingin an expected deficit of around $4.0bn, equal to 2.5 per centof the country’s gross domestic product (GDP).
The budget assumes an exchange rate of 9,000 rupiahs tothe US dollar, lower than the original rate of 8,500 rupiahs.
Inflation in 2002 is forecast at a rate of nine per cent,compared with eight per cent listed previously, while the priceof Indonesia’s export crude is pegged at $22/barrel.
The government expects domestic economic growth offour per cent next year, down from the earlier estimate of fiveper cent.
November 2001 49
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It hopes to help cover the budget deficit with $65m inproceeds from the country’s privatization programme, and $4.8bnfrom the sale of assets held under the Indonesian Bank Restruc-turing Agency.
The budget, first presented in the House of Representativesin September, was revised following the deepening recessionworldwide after the terrorist attacks on the United States onSeptember 11 last year.
Japanese exports to UAEdecline in first half of 2001
Abu Dhabi — Japanese exports to the United Arab Emirates(UAE) declined by almost five per cent, or $1.22 billion, in thefirst half of 2001, compared with $1.28bn in the same periodof 2000.
According to the Japanese Export Trade Organization(JETRO), overall trade with the UAE in the first six monthsgrew by 0.26 per cent to a value of $8.3bn, compared with$8.29bn in the same period last year.
Reports carried by UAE daily newspapers quoted JETROas saying: “This improvement is against the backdrop of a 5.82per cent decline in Japan’s total trade worldwide during the firstsix months.”
Among Japanese exports, machinery and equipment showeda decline of 5.9 per cent. The only improvement in this sectorwas that of transport machinery, including passenger cars andmotorcycles.
Japanese imports from the UAE in the first half rose of 2001by just over one per cent to a value of $7.08bn, as opposed to$7.0bn during the corresponding period the previous year.
Oil constituted 98.3 per cent of Japan’s imports from theUAE. Crude oil alone accounted for more than 76 per cent ofthe total trade.
The UAE remained Japan’s largest supplier of crude oil,meeting some 26.6 per cent of the country’s total crude oilimports.
The import of aluminium, another major item from theUAE, rose by 7.7 per cent to $95.7 million in the first half 2001,as opposed to $88.8m during the same period in 2000.
Algeria, Nigeria set up jointcommission on co-operation
Algiers — Algeria and Nigeria have set up a joint commissionto enhance bilateral co-operation between the two countries, itwas announced last month.
The commission, to be co-chaired by the Algerian President,Abdelaziz Bouteflika, and his Nigerian counterpart, OlusegunObasanjo, is scheduled to hold its first session in January 2002.
According to an official statement carried by the AlgerianPress Service (APS), the commission would serve as an impor-tant avenue for strengthening Algeria-Nigeria relations.
It noted that a number of areas of co-operation and part-nership had already been identified, while some projects werein an advanced stage of discussion.
These included the construction of a gas pipeline to link thetwo countries, as well as the extension of the trans-Saharan roadto the western Nigerian city of Lagos, and a fibre-optic telecom-munications link between the two countries.
Iran set to boost nation’spower generating capacity
Abadan — The Iranian Minister of Energy, HabibollahBitaraf, announced last month that 1,760 megawatts (mw) ofpower would be added to Iran’s generating capacity by summer2002.
Quoted by the official Islamic Republic News Agency (IRNA),he said the country’s electricity supply would exceed demandnext year and that blackouts would be minimized in the summermonths.
The Minister expressed hope that the increased generationof power would make it possible for Iran to offer the excessoutput to neighbouring countries.
Foundation stone laid for fourthQAFCO expansion in Qatar
Doha — The Qatar Fertilizer Company (QAFCO) made asignificant step towards becoming the world’s largest single siteproducer of urea and ammonia, with the laying of the founda-tion stone for the QAFCO-4 project at Mesaieed last month.
The ceremony was conducted by the Qatari heir apparent,Sheikh Jassem Bin Hamad Al-Thani.
It is anticipated that the $535 million expansion project willbe completed in January 2004. Production is to begin later thatyear.
QAFCO-4 comprises an ammonia plant and a urea unitwith capacities of 2,000 tonnes/day and 3,200 t/d, respectively.
The ammonia plant will be the second-largest single streamplant in the world. Designed by German company, KruppUhde, it will condense ammonia as a liquid before sending itto the urea plant as feedstock.
The proposed urea plant will also be the world’s second-largest single stream plant of its kind.
Although QAFCO-4 is technically independent, it will havea number of links with existing plants, to share resources andprovide the utmost flexibility in operating. The natural gasrequired to run QAFCO-4 will be supplied by Qatar Petroleum.
The expansion project, on completion, will push QAFCO’sproduction capacity to 2.0 million t/year of ammonia and 2.8mt/y of urea, thereby boosting ammonia output by 50 per centand urea production by 65 per cent.
The Qatari Minister of Energy and Industry, Abdullah BinHamad Al Attiyah, said a private company would run the urea
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formaldehyde condensate plant when QAFCO-4 went on streamin January 2004.
QAFCO will have a 70 per cent stake in the new plant. Theremaining shares will be held by the Qatar Industrial Manufac-turing Company (15 per cent), the Qatar-based United Devel-opment Company (10 per cent), and the Qatar Ladies InvestmentCompany (five per cent).
Algerian President in Nigeriafor talks on African initiative
Algiers — The Algerian President, Abdelaziz Bouteflika, wasdue to participate in a mini-summit of African leaders in Nigerialast month.
According to sources in Abuja, the summit would discussthe implementation of the African initiative that was adoptedearlier this year by the Organization of African Unity (OAU).
The Presidents of Nigeria and South Africa, OlusegunObasanjo and Thabo Mbeki, who, with Bouteflika, are the othertwo initiators of the new African plan, were due to attend thesummit, along with the President of Senegal, Abdoulaye Wade.
The African initiative aims at developing trade exchanges,consolidating democratic ties, and setting out a basis for soundeconomic management on the continent.
The plan has received the support of a number of interna-tional institutions, including the World Bank, the InternationalMonetary Fund, the Group of Eight industrialized countries,and the European Union, to which it has been submitted.
Iran’s GDP growth averaged4.1 per cent in 1997–2000
Tehran — Average growth in Iran’s gross domestic product(GDP) amounted to around 4.1 per cent in the period 1997–2000, according to the Macroeconomic Department of theManagement and Planning Organization (MPO).
The MPO said in its economic report for the year 2000,released last month, that Iran’s GDP rose to a value of 52 billionrials.
The nation’s economic growth rate fluctuated in the periodwith its highest rate standing at 5.9 per cent in 2000, and thelowest at 2.8 per cent in 1999.
The MPO report noted that increased oil revenues and theimpact on the economy, as well as an improvement in capitalaccumulation, were the reasons for the improved economicgrowth rate in the period under review.
It said the service sector gained a 54 per cent share in thecountry’s GDP — the highest percentage, compared with othersectors.
The value-added of the service sector in the period was 4.6per cent, on average.
The industry sector’s share in the GDP followed an upwardtrend, standing at about 21 per cent in the year 2000.
Qatari foreign trade up by51.1 per cent last year
Doha — Qatar’s foreign trade increased by 51.1 per cent in2000, according to an economic survey conducted by the QatarCentral Bank (QCB).
The bank said the country’s foreign trade in 2000 increasedby a value of almost $5.0 billion over 1999 figures.
The higher volume of trade was due to an increase in exportsand a fall in the value of imports, the survey noted.
Qatari exports during 2000 increased by 58.2 per centto a value of $11.43bn, while imports fell by over 30 per centto $3.02bn.
The bank said the ratio of foreign trade to the country’s grossdomestic product (GDP) increased to 89.1 per cent last year,compared with 79.7 per cent in 1999.
Of the commodity imports, machinery and transport equip-ment continued to lead, accounting for 44.8 per cent of totalQatari imports.
Manufactured goods maintained their second ranking, ac-counting for 20.9 per cent of total imports.
The report noted that the import of foodstuffs and liveanimals, which accounted for 10.2 per cent of total imports, fellto fourth position in 2000, from third place the year before.
It pointed out that the structure of the geographic distribu-tion of Qatar’s imports changed considerably last year, withJapan ranked first, accounting for some 11 per cent of totalQatari imports.
Japan’s performance, which saw the country move up fromsecond place in 1999, was at the cost of the United Kingdom,the top exporter to Qatar during that year. In 2000, the UK slidto fourth position.
Germany accounted for 8.2 per cent of total Qatari importsin 2000, securing second place. The United Arab Emirates wasthe fifth-largest exporter to Qatar, Italy the sixth and SaudiArabia the seventh, the survey noted.
Italian firm to participate inSouth Pars petrochemical plan
Tehran — Iran’s National Petrochemical Company (NPC)has commissioned Italy’s Snamprogetti to construct a largeacetylene monomer production unit in the country, accordingto the English-language Iran Daily newspaper.
The newspaper quoted the Executive Director of the SouthPars Petrochemical Project, Abbas Peivandi, as saying thatthe Italian firm would invest $196 million in the scheme,$122.3m of which would be in foreign exchange and the restin Iranian rials.
He stated that the South Pars special economic zone wascapable of producing 600,000 tonnes of acetylene monomerannually. The project would be completed by the summerof 2004.
The NPC was considering the use of a non-American
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technical certificate for the construction of the ethyl benzeneunit, which used acetylene monomer as its main feed, he said.
Peivandi noted that, at present, the private sector was op-erating an acetylene monomer production unit at Garmsar,Semnan, which had a capacity of 30,000 tonnes/year.
Acetylene monomer is a precursor of polystyrene, which isused in tyre and related industries.
The Middle East Economic Digest wrote in its latest issue thatbesides those plans, Snamprogetti and Iran’s Moshaverin SazehCompany were co-operating in two other projects.
These schemes comprised the construction of a carbonmonoxide unit at Imam Khomeini port and a urea granuleproduction unit at the Razi petrochemical complex.
Obasanjo urges developed worldto increase UN contributions
Paris — Nigerian President, Olusegun Obasanjo, last monthurged the international community to review their currentbudget policies and to contribute more to organizations like theUnited Nations Educational, Scientific and Cultural Organiza-tion (UNESCO) and to cancel the debt of African countries.
Speaking at the opening of the 31st session of the UNESCOGeneral Conference in the French capital, the Nigerian leaderparticularly encouraged the world’s richest nations to take a freshlook at how much they allocated to development through bodieslike UNESCO.
He appealed to “our fellow member countries, especially theindustrialized nations, to help change this rather counterproduc-tive budgetary policy.”
Obasanjo also called for greater efforts to be made in the areaof education, noting that “the eradication of poverty cannot becontemplated without dealing with the scourge of illiteracy anda systematic way of raising the level of knowledge of the populaceat large.”
For Africa, he criticized the reduction in development aid,especially Official Development Assistance (ODA), which hadbeen drastically cut by the developed nations.
“Developing countries feel deserted by the dramatic drop inODA,” he said, and appealed for a target of 0.5 per cent of grossdomestic product (GDP) to be channelled towards developmentaid in the next five years.
While this was below the 0.7 per cent of GDP the UNrecommended, it would be far higher than many industrializedcountries currently contributed, he noted.
Paradoxically, the United States, the richest economy in theworld, was the lowest ODA contributor in percentage terms,the President observed.
“Let me plead, once again, that African countries should berelieved from their debt burden that impedes national develop-ment and the provision of education and other social services,”Obasanjo stated.
While recognizing that there had been some progress on debtrelief, he said “the total eradication of the burden” was necessaryto give a chance of survival to countries in Africa.
France, Venezuela signco-operation agreements
Paris — Venezuelan President, Hugo Chávez, signed two co-operation agreements with the French Government relating tothe prevention of natural disasters and to increased co-operationin building rail infrastructure in Venezuela, according to theFrench Prime Minister’s office.
The accords were signed last month with the French PrimeMinister, Lionel Jospin, during Chávez’s three-day visit toFrance.
Agreements were also signed concerning forestry co-opera-tion. Chávez was expected to sign further accords with theFrench Minister of Defence, Alain Richard.
During the visit, the Venezuelan leader also met with theFrench President, Jacques Chirac, to discuss international oilmarkets, as well as with TotalFinaElf Chairman, ThierryDemarest.
Chávez said after the talks that the French oil companyintended to invest “several billion dollars” in Venezuela’s oil andgas sector over the next five years.
Additional meetings were held with officials from the Frenchmetals and mining company, Pechiney.
Chávez planned to tour several European countries — Italy,Belgium, Austria and Portugal — after the visit to France, andhe was also due to visit fellow OPEC Member Algeria.
Foreign firms vie for desalinationprojects in Saudi Arabia
Riyadh — Several foreign companies are competing to par-ticipate in Saudi Arabia’s water desalination industry, which isset to require investment of $40 billion over the next 20 years,it was reported last month.
According to the English-language daily, Arab News, SaudiArabian firms were mainly playing the role of agency or marketerfor the multinationals to enter the local market.
Companies from Japan, Korea and the United States wereparticularly keen to enter the industry, the newspaper noted.
The report pointed out that a permanent committee, ap-pointed by the Kingdom’s Supreme Economic Council (SEC),was the authority responsible for receiving and scrutinizingoffers from both domestic and foreign firms.
Over 20 quotations from Saudi, Japanese and Americancompanies had so far been received by the committee.
The government was also studying an action plan to expeditethe participation of the private sector in the construction ofdesalination plants.
A ministerial team comprising the Ministries of Agricultureand Water, Finance and National Economy, and Planning, aswell as the Saline Water Conversion Corporation, had submit-ted a report to the SEC on the matter after studying the offersand meeting with Saudi Arabian businessmen and representa-tives from foreign firms.
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capital markets. Under the Facility, loansare made to financial institutions for on-lending to small, medium and micro-en-terprises, as well as directly to specificprojects. Equity participation in privateenterprises is also undertaken, either di-rectly or through country or regional in-vestment funds. As a pre-condition tosuch investment, the Fund requires signa-ture of a standard agreement with thecountry concerned for the encouragementand protection of investment. This agree-ment accords the OPEC Fund the sameprivileges as those normally given to inter-national development institutions in whichthe country holds membership.
Tunisia has a population of 9.4 mil-lion people and a per capita income esti-mated at $2,100 in 1999. The country’sgross domestic product (GDP) stood at$20.9 billion during that year, of which59 per cent was contributed by the servicessector, 28 per cent by industry and 13 percent by agriculture. Since the late 1980s,Tunisia has embarked on a series of exten-sive economic reforms, illustrated by itsstrong performance in the 1990s with areal GDP growth of close to four per centper year. Since the launch of the country’sprivatization programme in 1987, a sub-stantial number of small-and medium-size enterprises have been privatized eitherin full or in part, and efforts are continuingto create a hospitable enabling environ-ment for the development of the country’sprivate sector.
No 67/2001Vienna, Austria, October 3, 2001
OPEC Fund and Eritreasign agreement toprotect investment
An agreement for the encouragement andprotection of investment has been signedbetween the OPEC Fund for Interna-tional Development and the State ofEritrea. Drawn up within the frameworkof the Fund’s Private Sector Facility, theconvention was initialled by HE BerhaneAbrehe, Minister of Finance of the Stateof Eritrea, and by HE Dr Y Seyyid Abdulai,Director-General of the OPEC Fund.
The Fund’s Private Sector Facility is anew financing window, endowed with itsown resources, through which the Fundchannels support directly to the privatesector in developing countries. The objec-tives of the Facility are to promote eco-nomic development by encouraging thegrowth of productive private enterpriseand supporting the development of localcapital markets. Under the Facility, loansare made to financial institutions for on-lending to small, medium and micro-en-terprises, as well as directly to specificprojects. Equity participation in privateenterprises is also undertaken, either di-rectly or through country or regional in-vestment funds. As a pre-condition tosuch investment, the Fund requires signa-ture of a standard agreement with thecountry concerned for the encouragementand protection of investment. This agree-ment accords the OPEC Fund the sameprivileges as those normally given to inter-national development institutions in whichthe country holds membership.
Eritrea is a country of some four mil-lion people with a gross domestic productestimated at $648.6 million in 1999.Although Eritrea’s income per capita of$200 is less than half the average for sub-Saharan Africa, its economic outlook ispromising due to sound management andrelatively diversified production in agri-culture, manufacturing and services. TheGovernment sees the private sector as theprimary engine of growth, and has soughtto create an effective enabling environ-ment for business.
OPEC Fund for International Development,Parkring 8, PO Box 995, 1011 Vienna, Austria.Tel: +43 1 515640; fax: +43 1 513 9238; tx: 1-31734 fund a; cable: opecfund; e-mail:[email protected]; Web site: http://www.opecfund.org.
OPEC Fund extends loansworth $61m in October
In October, the OPEC Fund extended nine agreements for loans totalling$61.14 million to Côte d’Ivoire, Egypt, Ethiopia, Korea, Mali, Nicaragua,the Philippines, Syria and Turkmenistan. They will help finance projectsin the health, education, water supply and sewerage and transportationsectors. Details can be found below.
No 66/2001Vienna, Austria, October 2, 2001
OPEC Fund and Tunisiasign agreement toprotect investment
An agreement for the encouragement andprotection of investment has been signedbetween the OPEC Fund for Interna-tional Development and the Republic ofTunisia. Drawn up within the frameworkof the Fund’s Private Sector Facility, theconvention was initialled by HE Dr AfifHendaoui, Ambassador of the Republic ofTunisia to the Republic of Austria, and byHE Dr Y Seyyid Abdulai, Director-Gen-eral of the OPEC Fund.
The Fund’s Private Sector Facility is anew financing window, endowed with itsown resources, through which the Fundchannels support directly to the privatesector in developing countries. The objec-tives of the Facility are to promote eco-nomic development by encouraging thegrowth of productive private enterpriseand supporting the development of local
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No 68/2001Vienna, Austria, October 3, 2001
Fund supports arseniccontamination researchin Bangladesh
The OPEC Fund for International Devel-opment has approved a $49,000 researchgrant in support of a project to provide along-term solution for combating chronicarsenic poisoning of Bangladesh’s watersupplies.
Established by scientists at HarvardMedical School and MIT, and in collabo-ration with the Dhaka University Hospi-tal in Bangladesh, aims are to provide, asrapidly as possible, the affected populationswith safe drinking water.
While it has long been known thatarsenic taken in high doses is acutelypoisonous, its cancerous effects from in-gestion at sub-acute levels have only re-cently become understood. In Bangladesh,an estimated 30 million people are cur-rently facing this danger.
Although arsenic has always beenpresent in the country’s groundwatersupply, concentrations were generally be-lieved not high enough to cause harm.However, it has been discovered that 20per cent of the 11m wells drilled over thepast 15 years possess dangerous levels ofarsenic.
Harvard and MIT have been workingto address this crisis through a three-pronged attack on the problem. Two ofthese involve research into the nature andcauses of the contamination, with the thirdoffering a more immediate solution inresponse to the urgency and severity of theproblem.
The OPEC Fund grant will thereforeco-finance locating and bringing test equip-ment to Bangladesh for precise measure-ment of arsenic in wells, as well as testingfor the presence of coliform bacteria inreplacement water. Harvard will sendmedically trained personnel to Dhaka andsurrounding villages to teach the peoplehow to use the devices and will conductregular blood testing. This will be done inthe form of a pilot programme, after whichits successes can then be adopted on awider scale.
No 69/2001Vienna, Austria, October 3, 2001
OPEC Fund supportscommunity library andresource centre in Ghana
The OPEC Fund for International devel-opment has approved a grant of $50,000in support of an initiative to establish anetwork of Community Libraries andResource Centres (CLRCs) in rural areasof Ghana. The scheme is the brainchild ofthe Ghana-based, non-profit NGO, Com-munity-Based Libraries and InformationTechnology (CBLIT).
CBLIT’s main objectives are to assistwith the educational process by makingreading materials available online andestablishing libraries; providing childrenwith a comfortable environment in whichto read, complete homework assignmentsand receive mentorship; utilizing infor-mation technology as a means for elimi-nating communities’ isolation; and,assisting with the empowerment of womenthrough helping boost their knowledgebase.
Under the current initiative, CBLITwill set up a pilot CLRC in the town ofApirede, some 40 miles from the capitalAccra. The Centre will house a library, aninformation technology facility and amultipurpose room for social functions.Its establishment will facilitate learningfor children and adults, while generatingrevenue to defray some of the centre’soperating costs.
In order to demonstrate its support,the community has already donated threeacres of land, architectural plans, booksand other items.
The Centre will be equipped with awide array of books and online resourcematerials that will encompass the needs ofschoolchildren, teachers and adults. Uponsuccessful completion of the pilot project,plans are to replicate it in other rural areasof the country.
The OPEC Fund’s grant representsa contribution to help cover the costsof setting up the pilot centre, includingits construction, and the provision offurniture, equipment and computerhardware.
No 70/2001Vienna, Austria, October 10, 2001
OPEC Fund supportseducation sector in Côted’Ivoire with $10m loan
The OPEC Fund for International Devel-opment has signed a $10 million loanagreement with the Republic of Côted’Ivoire in support of an ongoing initia-tive to expand the country’s educationalsystem and reduce gender and regionalinequalities in enrollment levels. Oncecompleted, more than 10,000 additionalplaces will be provided for primary schoolchildren and around 800 for secondarypupils.
Côte d’Ivoire’s economic difficultieshave considerably constrained expansionof the education sector. As a result, schoolsremain inadequate in number and learn-ing materials are scarce and often inappro-priate in relation to market needs. Suchdeficiencies have perpetuated low comple-tion rates, high degrees of repetition andgenerally low levels of learning. The lackof boarding facilities has acted as a disin-centive for the attendance of girls, espe-cially those living in remote rural areas.
The proposed project will benefitchildren, particularly girls between theages of six and 11. Activities include theconstruction of 67 primary schools (46 inrural areas and 21 in urban districts),complete with ancillary facilities such asadministrative offices, storage rooms andlatrine blocks. Each of the 201 classroomswill be provided with furniture, didacticmaterials and equipment. In addition, theproject will finance the construction oftwo, 12-classroom secondary colleges, onein Bodokro and an all-girl establishmentwith boarding facilities in Gagnoa. Someof the newly constructed schools will beused in a pilot programme for the teachingof mother tongues (native languages), andover 2,600 pedagogical kits will be distrib-uted to schools being constructed undera previous project, which was also sup-ported by the OPEC Fund.
By making education more accessible,and by providing students with a comfort-able and healthy learning environment,the project is expected to increase the
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quality of instruction, stimulate enrollmentand reduce absenteeism, thereby contrib-uting to the country’s social and economicprogress.
This is the second loan the OPECFund has extended to Côte d’Ivoire to-wards improvement of its education sec-tor. The earlier loan helped finance theconstruction of 66 primary schools and asecondary college in the Abidjan andBouaké regions.
The agreement was signed in Viennaby HE Amani Michel N’Guessan, Min-ister of National Education of the Repub-lic of Côte d’Ivoire, and by HE Dr SalehAl-Omair, Chairman of the GoverningBoard of the OPEC Fund.
Data summary
Project:Second basic education improvement.
Sector:Education.
OPEC Fund loan:$10m
Lending terms:Interest rate of 1.5 per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Republic of Côte d’Ivoire.
Executing agency:Ministry of National Education.
Implementation period:Three years.
Appraising agency:OPEC Fund.
Loan administrator:OPEC Fund.
Co-financier:Government of Côte d’Ivoire.
Total cost:$11.11m
Project description:The project comprises the followingcomponents:— constructing 201 primary schoolclassrooms and two 12-classroom col-leges;— supplying school furniture, learn-ing materials and equipment;— providing institutional develop-ment support;— implementing a pilot programme
in the teaching of mother tongues; and— supporting the project implemen-tation unit.
No 71/2001Vienna, Austria, October 10, 2001
Ethiopia gets $4mloan from OPEC Fundfor airport project
The OPEC Fund for International Devel-opment has signed a $4 million loan agree-ment with the Federal DemocraticRepublic of Ethiopia towards a project tomodernize Addis Ababa’s InternationalAirport. Once completed, the newly-up-graded facility will help strengthen thecountry’s position as an important trans-portation centre, and boost revenues fromthe expected increase in tourism, businessand trade.
Ethiopia’s landlocked location andunderdeveloped road infrastructure hasmade air travel a vital mode of transport.The Addis Ababa International Airport,which is situated on the southern outskirtsof the city, serves as a major hub for EastAfrica. However, as it was originally builtin 1962, the facility requires upgrading toaccommodate increased passenger andcargo traffic.
Addis Ababa’s airport expansion pro-gramme has been underway since 1997.With a new 3,800-m long runway and fivetaxiways almost completed, and otherimportant infrastructure in the process ofinstallation, considerable headway has beenmade. However, additional funding is nowneeded to finance outstanding compo-nents. These include completion of a40,000-sq m international passengerterminal and adjacent aircraft parkingapron, along with the installation of allservices and facilities, car parks, lightingand roads.
Also envisaged is an extensive baggagehandling system, consisting of conveyors,x-ray screening and detection equipment,to provide a faster, more efficient air cargoservice. Scheduled for completion at theend of March 2002, the upgraded facilitywill be able to accommodate, safely andefficiently, both present and forecasted
passenger traffic counts and allow for futureexpansion when necessary.
This is the second loan the OPECFund has approved for the Addis AbabaInternational Airport expansion project.Previous loans also include one for balanceof payments support, and eight others thathelped finance projects in the transporta-tion, agriculture, national developmentbanks and education sectors. Ethiopia hasalso received five technical assistance grantsin the areas of agriculture and educationand three emergency grants to help alle-viate food shortages.
The agreement was signed in Viennaby Dr Waktasu Negeri Yadeta, Chargé d’Affaires ad interim of the Diplomatic Mis-sion of the Federal Democratic Republicof Ethiopia to Austria, and by HE DrSaleh Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.
Data summary
Project:Addis Ababa Airport II.
Sector:Transportation.
OPEC Fund loan:$4m
Lending terms:Interest rate of one per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:The Federal Democratic Republic ofEthiopia.
Executing agency:The Ethiopian Civil Aviation Author-ity/Ministry of Transport and Com-munications.
Implementation period:Completion scheduled for the end ofMarch 2002.
Appraising agency:Kuwait Fund for Arab EconomicDevelopment (Kuwait Fund).
Loan administrator:Kuwait Fund.
Co-financiers:Kuwait Fund; Arab Bank for Eco-nomic Development in Africa; Gov-ernment of Ethiopia.
Total cost:$22.07m
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Project description:The project comprises the following:— completion of new air terminaland aircraft parking apron, includingthe installation of all services and utili-ties, as well as construction of car parks,roads and lighting systems;— installation of baggage handlingsystem including conveyors, x-rayscreening equipment and trace ele-ment detection equipment; and— consultancy services.
No 72/2001Vienna, Austria, October 10, 2001
Korea DPR to pursueroad rehabilitation with$4.74m Fund loan
The OPEC Fund for International Devel-opment has signed a $4.74 million loanagreement with the Democratic People’sRepublic of Korea to help finance reha-bilitation of the Sinhung-Songgwan road.Once completed, the movement of peopleand goods will be greatly facilitated.
Korea DPR’s rugged terrain and harshwinters allow for only around 15 per centof the land to be cultivated. Most of thislies in South Hwanghae Province, wherethe bulk of the country’s rice, maize andother crops is grown. Despite the region’sstrong productive capacity, however, Koreastill imports much of its food, a situationthat has evolved, in part, because of thepoor condition of the country’s 72,000-km road network, only a fraction of whichis paved. As a vital food-growing area,South Hwanghae depends heavily on roadtransportation for the movement of agri-cultural inputs and produce. TheSonggwan-Sinhung highway is a key cor-ridor within the province, providing linksto two major seaports, as well as to thecapital city Pyongyang, and outlying food-deficit regions. However, a lack of peri-odic maintenance and a shortage offunding, combined with flooding and othernatural disasters, has led to the road’ssevere deterioration.
Under the project, five segments ofthis 42.8-km long road will be upgradedaccordingly, based upon the results of a
survey and design study that will be con-ducted on each section, taking into ac-count topography, pavement conditionand drainage capability, as well as currentand projected vehicle loads. Safety barriersand drainage works in flood-prone areaswill be installed, and the implementationof a maintenance programme will insurethe rehabilitated road is kept in optimalcondition.
The newly renovated road will providea more efficient and less expensive meansof transport, providing farmers with im-proved access to inputs and marketplacesand giving a much-needed boost to in-comes. The road will also help strengthenfood security by facilitating the distribu-tion of produce to food-deficit regions. Inaddition, remote populations will find iteasier to reach important services such asschools, hospitals and workplaces.
Korea DPR has already benefited fromthree other project loans in the agriculturesector. In addition, the country has re-ceived one emergency grant to aid floodvictims.
The agreement was signed in Viennaby HE Kim Gwan Sop, Ambassador andPermanent Representative of the Demo-cratic People’s Republic of Korea to theUnited Nations and other InternationalOrganizations in Vienna, and by HE DrSaleh A Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.
Data summary
Project:Sinhung-Songgwan road.
Sector:Transportation.
OPEC Fund loan:$4.74m
Lending terms:Interest rate of 1.5 per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Democratic People’s Republic ofKorea.
Executing agency:Roads Department, Ministry of Landand Environment Protection.
Implementation period:Two years.
Appraising agency:OPEC Fund.
Loan administrator:OPEC Fund.
Co-financier:Government of Korea DPR.
Total cost:$7.52m
Project description:The project comprises the following:— rehabilitation of five sections of a42.8-km stretch of the Sinhung-Songgwan road;— construction of safety barriers anddrainage works; and— provision of spare parts for con-struction equipment and maintenanceprogramme.
No 73/2001Vienna, Austria, October 10, 2001
Mali benefits from $9mOPEC Fund loan forroad rehabilitation
A $9 million loan agreement was signedbetween the OPEC Fund for Interna-tional Development and the Republic ofMali to help finance rehabilitation of theDidiéni-Goumbou-Nara road, a relativelybasic track that passes through Koulikoroand Kayes, two remote, rural regions. Oncecompleted, the transport of inputs, agri-cultural goods and people will be facili-tated, and the area’s opportunity foreconomic integration with neighboringareas will be greatly improved.
Mali, a landlocked Sahelian country,has two very distinct seasons, fluctuatingbetween long drought periods and torren-tial downpours. These environmentalchallenges, along with a scarcity of arableland, place many obstacles in the way ofMali’s inhabitants, three-quarters of whomdepend on agriculture for their livelihoods.Possessing only one railway line, the coun-try relies heavily on its road network forthe movement of produce. However, lessthan one-fifth of Mali’s 14,500-km sys-tem is paved and, during the wet months,many routes are rendered impassable.Particularly problematic is the badly dam-aged Didiéni-Goumbou-Nara earth road,
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which has become so deteriorated thattravel is becoming impossible for the sur-rounding villages, isolating them frommarketplaces, social services, and incomegenerating activities, thereby hinderingeconomic and social development amongthe area’s one-half million strong popula-tion.
Under the project, the 176-km roadwill be upgraded to a seven-metre wide all-weather road with a 1.5-m shoulder oneither side. To prevent flooding, the routewill be elevated on a raised embankment,and 110 culverts and a series of drainagesystems will be installed. Complementingthe scheme is the provision of road mark-ings and signs.
The newly-restored road will enablepreviously-isolated villages to have easieraccess to market centres, health and edu-cation facilities and employment oppor-tunities. Household incomes will rise, andthe region’s inhabitants will be able toenjoy a far better standard of living.
The OPEC Fund has previously ap-proved 27 other loans for Mali, includingseven for balance of payments support,two to finance commodity imports pro-grammes, one for HIPC debt relief and 17project loans in the agriculture, transpor-tation, education and energy sectors. Fundgrants also went to help Mali finance itssubscription to the Common Fund forCommodities, as well as build a solar energyregional centre in Bamako, and acquireequipment to deal with the effects ofdrought.
The agreement was signed in Viennaby HE Soumaïla Cissé, Minister of Equip-ment, Land Rehabilitation, Environmentand Urban Development of the Republicof Mali, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.
Lending terms:Interest rate of one per cent per an-num, with an annual service charge of
one per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Republic of Mali.
Executing agency:National Office of Public Works, underthe aegis of the Ministry of Equip-ment, Land Rehabilitation, Environ-ment and Urbanism.
Implementation period:27 months.
Appraising agency:OPEC Fund.
Loan administrator:OPEC Fund.
Co-financier:Government of Mali.
Total cost:$10.44m
Project description:The project will comprise the following:— rehabilitation of 176-km stretch ofroad to 7-m wide, with a 1.5-m shoul-der on either side;— drainage and ancillary works; and— road markings and road signs.
No 74/2001Vienna, Austria, October 10, 2001
Nicaragua receives $5mloan from OPEC Fundfor road rehabilitation
The OPEC Fund for International Devel-opment has signed a $5 million loan agree-ment with the Republic of Nicaragua toco-finance the upgrading of the Pan-American Highway, an important corri-dor that traverses the country linking itwith Costa Rica to the south and Hondu-ras in the north. The project supports anongoing government initiative to improveNicaragua’s entire transportation sector,primarily to facilitate the movement ofgoods for export and give the economy amuch-needed impetus.
Nicaragua is heavily dependent on itsextensive road network, which is the mainmode of transport for most of the popu-lation. Unfortunately, years of civil unrestand economic instability have led to severedeterioration of the transportation infra-
structure. Within its rehabilitation pro-gramme, Government has placed the high-est priority on upgrading the Pan-AmericanHighway, which is in urgent need of re-pair. Heavy vehicle loads have acceleratedits worsening condition, making themovement of agricultural goods difficultand costly. To make matters worse, thedamage sustained by the network’s roadsand bridges in 1998 from Hurricane Mitchhas left many outlying regions isolatedfrom the main commercial centres.
Six sections (totalling 259 km) of theNorthern Pan-American Highway, as wellas portions of the southern stretch aretargeted for rehabilitation. A 2-3 inchdeep asphalt layer will be laid along theentire length and the more severely dam-aged surfaces re-based. In order to with-stand flooding, a system of ditches anddrains will be integrated into the roaddesign. Bridges will also be built new orrepaired. Additionally, the project willsupport a monitoring and maintenancescheme to ensure continued safe and ef-ficient driving conditions.
This initiative will benefit thousandsof Nicaragua’s impoverished rural popu-lation, who will enjoy easier and cheapertransportation of goods and improvedaccess to marketing centres, thus allowingthem to increase their level of economicactivity. Social services and places ofemployment will also become more acces-sible, leading to a better quality of life.
The OPEC Fund has approved 12other loans to Nicaragua, of which fourwere for balance of payments support,three for commodity imports programmesand five for projects in the transportation,agriculture, education, and water supplyand sewerage sectors. Fund grants alsowent to provide emergency assistance toNicaragua, as well as to finance a watersupply and environmental sanitation pro-gramme and technical assistance schemesin the energy sector. In addition, the Fundhas also approved the delivery of debt reliefto the country under the Heavily IndebtedPoor Countries initiative.
The agreement was signed in Viennaby Professor Dr Alberto José Altamirano-Lacayo, Chargé d’Affaires ad interim atthe Embassy of the Republic of Nicaraguain Austria, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.
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Data summary
Project:Pan-American highway rehabilitation.
Sector:Transportation
OPEC Fund loan:$5m
Lending terms:Interest rate of one per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Republic of Nicaragua.
Executing agencies:Ministry of Transportation and Infra-structure; Road Maintenance Fund.
Implementation period:Three years
Appraising agency:Inter-American Development Bank(IDB).
Loan administrator:IDB.
Co-financiers:IDB; Government of Nicaragua.
Total cost:$81.6m
Project description:The project comprises the following:— upgrading and rehabilitation ofnorthern and southern portions of thePan-American Highway;— rebuilding/repairing of bridges;— implementation of road monitor-ing and maintenance programme; and— construction of drains and ditches.
No 75/2001Vienna, Austria, October 10, 2001
Philippines receives$7m OPEC Fund loanfor education sector
The OPEC Fund for International Devel-opment has signed a $7 million loan agree-ment with the Republic of the Philippinesto help strengthen the technical educationand skills development (TESD) system,one of the three major education subsectors.Designed to assist with the improvement
of existing programmes, this initiative willenable the country’s disadvantagedpopulations to attain the specialized skillsand training needed to secure better-pay-ing jobs.
Although the economy of the Philip-pines is relatively stable and unemploy-ment remains low, over one-third of theinhabitants still live in poverty. This is duein part to the limited access rural anddisadvantaged populations have to thehigher educational training necessary foracquiring more financially rewarding jobs.Teaching facilities across both public andprivate sectors are lacking up-to-datematerials and qualified staff.
Additionally, the TESD system isunable to keep pace with modern technol-ogy, so the relevance of coursework israpidly becoming obsolete. Most studentsare enrolled in private institutions, whichplay the largest role in producing a skilledworkforce. However, these tend to belocated only in larger urban areas, exclud-ing the majority of the rural population.Training centres in remote areas are inad-equate and curriculum is limited, espe-cially for women, who comprise the greatestnumber of enrollees. The sector also lacksan accreditation programme that enablesstudents to transfer classes and other skillsfrom outside the scope of the TESD sys-tem.
A multi-pronged approach will be usedto reform the existing TESD system inorder to produce a framework capable ofgenerating highly-skilled workers acrossall populations. Throughout the entiresector, training centres will be upgradedand equipped with modern instructionalmaterials and computers, and 1,300 teach-ers will be offered staff development pro-grammes.
A scholarship fund will be established,targeting special groups such as womenand poor/ethnic minorities in rural areas,benefiting approximately 40,000 traineesover a five-year period. Needy studentswill be eligible for student loans, ulti-mately assisting at least 12,000 partici-pants. Repayments will be kept in arevolving fund to continue helping otherapplicants, and an accreditation pro-gramme will be integrated into the scheme.
Once implemented, thousands of dis-advantaged people will be able to acquirethe diverse and advanced skills necessary
to obtain better employment, enablingmany, perhaps for the first time, to achieveself-reliance and a brighter future.
This is the tenth loan made by theOPEC Fund to the Philippines. Nineearlier loans consist of project loans in theagriculture, multi-sectoral, transportationand energy sectors. The country has alsobeen the recipient of one research grantand two technical assistance grants in thearea of energy.
The agreement was signed in Viennaby HE Victor G Garcia III, Ambassadorof the Republic of the Philippines toAustria, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.
Data summary
Project:Technical education and skills devel-opment.
Sector:Education.
OPEC Fund loan:$7m
Lending terms:Interest rate of two per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Republic of the Philippines.
Executing agency:Technical Education and Skills Devel-opment Authority.
Implementation period:Five years.
Appraising agency:Asian Development Bank (AsDB).
Loan administrator:AsDB.
Co-financiers:AsDB; Danida (Denmark); NordicDevelopment Fund; Government ofthe Philippines.
Total cost:$84.77m
Project description:The project will comprise the follow-ing:— upgrading of existing and construc-tion of new educational facilities;— provision of educational materialsand equipment;
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— implementation of a staff develop-ment programme;— consultancy services; and— establishment of financial servicesand scholarship fund.
No 76/2001Vienna, Austria, October 10, 2001
OPEC Fund provides$6.2m loan to Syria forhospital project
The OPEC Fund for International Devel-opment has signed an agreement with theSyrian Arab Republic for a loan of $6.2million towards establishing a new educa-tional hospital at Tishreen University inthe city of Lattakia. Once completed, thefacility will bring a wide array of healthcare services to some 800,000 people liv-ing in Syria’s West Coast region, andenhance clinical training opportunities forthe University’s medical students.
In the past 25 years, Syria has madeimpressive strides in its health care sector.Life expectancy is higher, infant mortalityrates have dropped considerably, andmaternal mortality rates are relatively low.However, along with the country’s in-creased urbanization, the incidence ofinfectious disease and injuries is also onthe rise. And, since the percentage of peopleover the age of 60 is growing, and likewise,age-related illnesses, meeting health careneeds is becoming an area of growingconcern, particularly since the elderlypopulation is expected to more than dou-ble over the next 25 years. Available medi-cal care in rural regions is inadequate, andthe incidence of communicable diseases istaking its toll on children under seven.Although the physician/patient ratio hasimproved substantially in recent years,there are still large disparities among re-gions.
Construction of the hospital falls inline with the Syrian government’s strategyto provide modern services and low-costcoverage to rural regions. The new com-plex comprises a 14-storey main tower, inaddition to a 102,000-sq m area desig-nated for an outpatient clinic, capable ofhandling 1,500-2,000 patients per day, a
parking lot and a residential building.Advanced diagnostic equipment will bepurchased, and specialized wards and re-search facilities established. Bed capacitywill be increased to 660, with the capabil-ity of being further expanded to 800. Thehospital will be staffed with some 120doctors and support staff and strongemphasis will be placed on providingpatients with preventative health care, aswell as family planning services.
Once the new facility is operational,not only will needy communities have theopportunity to access comprehensivehealth care, perhaps for the first time, inup-to-date facilities, but also numerousmedical students will receive valuable train-ing and preparation for working in a clini-cal setting.
The OPEC Fund has previously ex-tended five project loans to Syria in theagricultural and water supply and sewer-age sectors. The country has also benefitedfrom four technical assistance grants in theareas of energy conservation and agricul-ture.
The agreement was signed by HESafwan Ghanem, Ambassador of the Syr-ian Arab Republic to Austria, and by HEDr Saleh A Al-Omair, Chairman of theGoverning Board of the OPEC Fund.
Data summary
Project:Tishreen University educational hos-pital.
Sector:Health.
OPEC Fund loan:$6.2m
Lending terms:Interest rate of two per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Syrian Arab Republic.
Executing agency:Tishreen University.
Implementation period:Five years.
Appraising agency:Islamic Development Bank (IsDB).
Loan administrator:OPEC Fund.
Co-financiers:IsDB; government of Japan; govern-ment of Syria.
Total cost:$110m
Project description:The project comprises the following:— construction of general adminis-tration building, teaching and train-ing facilities and out-patient andresidential buildings;— purchase of medical supplies andequipment; and— supervisory services.
No 77/2001Vienna, Austria, October 10, 2001
Turkmenistan gets$5.2m loan for watersupply project
The OPEC Fund for International Devel-opment has signed a $5.2 million loanagreement with the Republic ofTurkmenistan in support of a scheme toboost the availability and quality of drink-ing water for the 400,000-strong popula-tion of the Balkan Velayat (district), awesterly region bordering the Caspian Sea.
Turkmenistan, a land characterized byits arid, desert terrain, has the lowestnumber of available water sources inCentral Asia. Supplies come primarily fromthe man-made Karakum canal, which feedsinto the Amu Darya River, which in turnjoins the Aral Sea. Over-use of the river forirrigation has caused serious depletion ofthe sea, reducing its volume by almost 75per cent, leading to salination anddesertification.
Agricultural pesticides and chemicalshave rendered groundwater undrinkable,and an outdated infrastructure has causedlosses of over one-half of the water supply.Approximately 50 per cent of the drinkingwater falls below hygienic standards.Conditions are particularly serious in theBalkan district, where rationing isfrequent and the occurrence of water-borne diseases is high. Balkan’s watersupplies come from the Karakum Canaland numerous wells in the Yaskhan area.These sources are becoming overtaxed, a
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situation worsening due to populationincreases.
Under this initiative, a wide assort-ment of activities will be implemented.Geared towards improving, rehabilitatingand expanding urban and rural watersystems, work will range from upgradingof the entire transmission network, distri-bution centres and wells, to the provisionof pipelines and the construction ofwastewater pumping stations.
Some 147 wells will be drilled, supple-menting groundwater sources by an addi-tional 35,000 cubic metres/day. Since thequality of this water is high, purificationwill be unnecessary. Additionally, a 40-km main transmission line to the city ofNebitdag will be installed. Another keycomponent entails halting damaging en-vironmental practices, thus helping insurethe project’s ongoing success.
This is the second time the OPECFund has extended development assist-ance to Turkmenistan. The first loanhelped finance the establishment of amedical diagnostic centre in theTurkmenabat district.
The agreement was signed in Viennaby HE Vladimir Kadyrov, Ambassador ofthe Republic of Turkmenistan to Austria,and by HE Dr Saleh A Al-Omair, Chair-man of the Governing Board of the OPECFund.
Data summary
Project:Balkan Velayat water supply.
Sector:Water supply and sewerage.
OPEC Fund loan:$5.2m
Lending terms:Interest rate of 1.75 per cent perannum, with an annual service chargeof one per cent on amounts with-drawn and outstanding; maturity of20 years, including a grace period offive years.
Borrower:Republic of Turkmenistan.
Executing agency:Committee of Purified Water Supply.
Implementation period:Four years.
Appraising agency:Islamic Development Bank (IsDB).
Loan administrator:IsDB.
Co-financiers:IsDB; government of Turkmenistan.
Total cost:$31.81m
Project description:The project comprises the following:— drilling of 147 fresh, salt water andcontrol wells in the Yaskhan area;— installation of collection and inter-mediary pipelines and one 40-km mainwater transmission line;— construction of water reservoirs andfour pumping stations; and— consultancy services.
No 78/2001Vienna, Austria, October 10, 2001
Egypt receives $10mOPEC Fund loan foreducation sector
The OPEC Fund for International Devel-opment has signed a $10 million loanagreement with the Arab Republic of Egyptto help strengthen its technical educationsystem. Designed to assist with the im-provement of existing programmes, thisinitiative will enable the country’s disad-vantaged populations to attain the special-ized skills and training needed to securebetter-paying jobs.
Although Egypt has made great stridesin expanding its educational system, thesector’s efficiency remains low. Dropoutand repetition rates are rising, with onlyhalf of all secondary school graduatescontinuing on to post-secondary technicalschools. This is due in part to the limitedaccess rural and disadvantaged populations,particularly women, have to the advancedtraining necessary for acquiring more fi-nancially rewarding jobs. As a result,unemployment rates are high, with thegreatest percentage occurring in the 15-30age group. Teaching facilities are inad-equate, and vary from crudely-built struc-tures in rural areas, to more modern butseriously overcrowded buildings in urbancentres. Additionally, up-to-date materi-als and qualified staff are scarce, and thesecondary educational system is unable to
keep pace with modern technology, so therelevance of coursework is rapidly becom-ing obsolete.
A multi-pronged approach will be usedto reform the existing technical educationsystem in order to produce a frameworkcapable of generating highly-skilled work-ers across all population groups. In 27governates throughout Egypt, primarilythose in rural regions, 33 five-year second-ary technical industrial schools (STISs)will be upgraded and equipped withmodern instructional materials. Three newmultipurpose training centres will be con-structed and provided with extra work-shops and laboratories, and some 340existing workshops will receive new equip-ment.
Once completed, approximately40,000 technical students, 1,000 studentteachers and 6,000 school heads and ad-ministrators across all levels will have ac-cess to quality training each year, and beable to acquire the diverse and advancedskills necessary to obtain better employ-ment, thereby enabling many to achievea higher standard of living and a more self-reliant future.
This is the fourth loan made by theOPEC Fund to Egypt. Earlier loans con-sist of one for balance of payments sup-port, one line of credit to the IndustrialDevelopment Bank of Egypt and oneproject loan in the health sector. Thecountry has also benefited from two re-search grants and four technical assistancegrants in the agriculture and educationsectors.
The agreement was signed in Viennaby HE Sameh Hassan Shoukry, Ambas-sador of the Arab Republic of Egypt toAustria, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.
Data summary
Project:Industrial secondary schools, phase II.
Sector:Education.
OPEC Fund loan:$10m
Lending terms:Interest rate of two per cent per an-num, with an annual service charge ofone per cent on amounts withdrawn
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and outstanding; maturity of 20 years,including a grace period of five years.
Borrower:Arab Republic of Egypt.
Executing agency:Project Implementation Unit, Minis-try of Education.
Implementation period:Five years.
Appraising agency:African Development Bank (AfDB).
Loan administrator:AfDB.
Co-financiers:AfDB; Arab Fund for Economic andSocial Development; government ofEgypt.
Total cost:$52.74m
Project description:The project comprises the following:— rehabilitation of 33 five-year STISs;— re-equipping 340 workshops;— construction of three multipurposetraining centres;— provision of pedagogical materi-als;— staff training programmes; and— consultancy services.
No 79/2001Vienna, Austria, October 10, 2001
Loans totalling$61.14m extendedby the OPEC Fund
Nine agreements for loans totalling $61.14million have been signed between theOPEC Fund for International Develop-ment and nine developing countries inAfrica, Asia and the Caribbean. The loanswere extended to Côte d’Ivoire, Egypt,Ethiopia, Korea, Mali, Nicaragua, thePhilippines, Syria and Turkmenistan. Theywill help finance projects in the health,education, water supply and sewerage andtransportation sectors.
All nine projects will be co-financed bythe concerned governments and by anumber of international developmentinstitutions, including OPEC aid agen-cies such as the Kuwait Fund for ArabEconomic Development, the Arab Bank
for Economic Development in Africa, theArab Fund for Economic and SocialDevelopment and the Islamic Develop-ment Bank. Other contributors includethe African Development Fund, the Inter-American Development Bank, the AsianDevelopment Bank, Danida (Denmark),the Nordic Development Fund and theGovernment of Japan.
The OPEC Fund loans carry interestat rates ranging from one per cent to twoper cent. All loans have a maturity of 20years and include a grace period of fiveyears.
As of the end of August 2001, cumu-lative lending of the OPEC Fund, forproject and programme financing, bal-ance of payments support and HIPC debtrelief, stood at $4.75 billion. A further$96.8m had been extended in support ofprivate sector operations. Total commit-ments, inclusive of grants and contribu-tions to other international institutions,had reached $6.07bn and benefited 108countries. Total disbursements hadamounted to $4.0bn.
No 80/2001Vienna, Austria, October 10, 2001
OPEC Fund and LaoPDR sign agreementto protect investment
An agreement for the encouragement andprotection of investment has been signedbetween the OPEC Fund for Interna-tional Development and Lao PDR. Drawnup within the framework of the Fund’sPrivate Sector Facility, the convention wasinitialled by HE Soukanh Mahalath,Minister of Finance of the Lao People’sDemocratic Republic, and by HE Dr YSeyyid Abdulai, Director-General of theOPEC Fund.
The Fund’s Private Sector Facility is afinancing window, endowed with its ownresources, through which the Fund chan-nels support directly to the private sectorin developing countries. The objectives ofthe Facility are to promote economicdevelopment by encouraging the growthof productive private enterprise and sup-porting the development of local capital
markets. Under the Facility, loans are madeto financial institutions for on-lending tosmall, medium and micro-enterprises, aswell as directly to specific projects. Equityparticipation in private enterprises is alsoundertaken, either directly or throughcountry or regional investment funds. Asa pre-condition to such investment, theFund requires signature of a standardagreement with the country concerned forthe encouragement and protection of in-vestment. The agreement accords theOPEC Fund the same privileges as thosenormally given to international develop-ment institutions in which the countryholds membership.
In 1999, Laos’ population was esti-mated at 5.3 million and income per capitastood at $290. During the same year, grossdomestic product (GDP) at market pricesamounted to $1.5 billion, and the GDP
growth rate reached 7.4 per cent. Laos’ keyeconomic sector is agriculture, contribut-ing to 53 per cent of GDP and employingover 89 per cent of the labor force. Servicesaccount for 25 per cent of GDP followedby industry with 22 per cent. Laos alsooffers some competitive advantages incertain private sector development activi-ties due largely to its relatively low laborand production costs, its natural resourcebase and low tax base. Since the introduc-tion of reforms in 1986, the governmenthas transformed the economy from a cen-trally planned to a market-oriented sys-tem. The structural reforms and soundmanagement initiated under the reformshave fostered a steady movement towardsmacroeconomic stability, productiongrowth, the emergence of the private sec-tor, and increased foreign direct invest-ment and trade flows.
No 81/2001Vienna, Austria, October 17, 2001
OPEC Fund receivesVenezuelan PresidentHugo Chávez
The President of the Bolivarian Republicof Venezuela, HE Hugo Chávez Frías haspaid a courtesy call on the OPEC Fundfor International Development. Accom-
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Secretary General’s diary
The Seventh Conference of the Parties(COP7), the 15th Sessions of the SubsidiaryBody for Scientific and Technological Advice(SBSTA) & Subsidiary Body for Implemen-tation (SBI) were organized by theUNFCCC and held in Marrakesh, Mo-rocco, October 29–November 9, 2001.
Secretariat missions
A conference on Delivering Kyoto: CouldEurope Do It? was organized by the RoyalInstitute of International Affairs (RIIA),and held in London, UK, October 1–2,2001.
OAPEC’s 8th Ordinary Meeting on theEnvironment was held in Cairo, Egypt, onOctober 3–4, 2001.
A conference on the Accelerating MarketLiberalization in the EU was organized byCEPMLP, University of Dundee, Scot-land, and held in Brussels, Belgium,October 4–5, 2001.
RIIA’s Workshop on Asian Markets washeld in London, UK, October 11–12,2001.
The 7th Annual Middle East Gas Summitwas organized by IBC Conferences, andheld in Muscat, Oman, October 16–17,2001.
A Technical Meeting with Xprodate wasorganized by Xprodate, Norway, and heldin Karmsund, Norway, October 31–No-vember 2, 2001.
OPEC Meetings
The 118th (Extraordinary) Meeting of theConference was held at the OPEC Secre-tariat, Vienna, Austria, on November 14,2001.
The 119th Meeting of the Conference will beheld at the OPEC Secretariat, Vienna,Austria, on March 15, 2002.
Octoberpanied by an entourage of high-rankingministers, the President was received byOPEC Fund Director-General, HE Dr YSeyyid Abdulai, and other senior officialsof the Fund. Although the Fund has re-ceived heads of state of beneficiary coun-tries on a number of occasions in the past,it is the first time that a head of state ofa member country has visited its premises.
In his welcoming statement, DrAbdulai gratefully acknowledged Presi-dent Chávez’s recognition of, and alle-giance to, the cause of OPEC and, inparticular, the work of the OPEC Fund.The Director-General recalled the Presi-dent’s “untiring efforts” in organizing andhosting the hugely successful II Summitof OPEC Heads of State, which took placein the Venezuelan capital, Caracas, in Sep-tember 2000.
“The meeting clearly met the set chal-lenge of revitalizing our Organization andreaffirming the commitment to develop-ment made by the generation of leadersbefore us,” he said. Referring to the tiesbetween Venezuela and the OPEC Fund,Dr Abdulai noted, with pleasure, the deeplyrooted longevity of the relationship. Prais-ing Venezuela for its “unflinching” dedi-cation to the Fund, he expressed the hopethat such support would continue.
In his own address, President Chávezthanked the Director-General for his warmwords of welcome and reiterated his per-sonal interest in the development coopera-tion activities of the OPEC Fund. “TheFund may be modest in size, but its achieve-ments are great and of immense impor-tance to millions of poor people aroundthe world,” he said. The President urgedfellow member countries to provide moresupport to the institution: “As membersof the OPEC Fund, we have a responsi-bility to strengthen and enlarge it,” he
asserted. It was the duty of OPEC membercountries, he continued, “to help build abetter world and seek justice and peace.”The President concluded his address bypaying tribute to the efforts of Fundmanagement and staff, who he said were“deserving of recognition” for their work.
As host to the historic II OPEC Sum-mit, President Chávez was responsible forbringing together, for the first time in 25years, the Heads of State and Governmentof OPEC Member Countries. The eventwas a resounding success, uniting andstrengthening the Organization, and in-stilling in it a new sense of purpose. Amongits many resolutions, the resulting, multi-paragraph Caracas Declaration, in addi-tion to addressing oil and energy issues,also examined the subject of developmentco-operation, and designated the eradica-tion of poverty an “overriding global pri-ority.”
President Chávez was in the middle ofa 17-day official tour, involving visits tofour OPEC member states (Algeria, theKingdom of Saudi Arabia, IR Iran and theGSP Libyan AJ) seven European countries(Switzerland, France, Italy, Belgium,Austria, Portugal and Great Britain), andRussia. The President’s entourage includedHE Luis Alfonso Davila, Minister ofForeign Affairs; HE Jorge Giordani, Min-ister of Planning and Development; HEAlvaro Silva Calderon, Minister of Energyand Mines; HE Maria Lourdes Urbaneja,Minister of Health and Social Develop-ment and HE Dios Dado Cabello, Min-ister of the Office of the President.According to Mr Davila, the purpose ofthe tour was to discuss issues of bilateralrelations and to review existing accordswith the various countries, in the areas ofenergy, science and technology, economy,culture, politics and commerce.
62 OPEC Bulletin
For an in-depth lookat the oil marketand related issues
the OPEC Reviewcontains research papersby experts from across
the world
Now in its 25th annual volume, the
OPEC Review is published quarterly.Its content covers the international oil
People wishing to submit a paper forpublication should contact the Editor-in-Chief of the OPEC Review, Farouk UMuhammed, at the Public Relations andInformation Department, OPEC Secre-tariat, Obere Donaustrasse 93, A-1020Vienna, Austria.
“The principal objective of the OPEC Review is tobroaden awareness of (energy and related) issues,enhancing scholarship in universities, researchinstitutes and other centres of learning.”
Recent issues
September 2001What have we learned from the experienceof low oil prices? — A.F. AlhajjiThe estimation of risk-premium implicitin oil prices — Jorge Barros LuísThe economics of an efficient reliance onbiomass, carbon capture and carbonsequestration in a Kyoto-style emissionscontrol environment — Gary W. YoheThe geopolitics of natural gas in Asia —Gawdat Bahgat
June 2001Has the accuracy of energy projections inOECD countries improved since the 1970s?— Jan Bentzen and Hans LinderothOil product consumption in OPECMember Countries: a comparison of trendsand structures — Atmane DahmaniOil and macroeconomic fluctuations inEcuador — François BoyeEnergy indicators — OPEC Secretariat
March 2001Estimating oil product demand in Indone-sia using a cointegrating error correctionmodel — Carol Dahl and KurtubiThe gas dimension in the Iraqi oil industry
— Thamir Abbas Ghadhban and SaadallahAl-FathiThe Russian coal industry in transition: alinear programming application — BoJonsson and Patrik SöderholmThe future of gaseous fuels in Hong Kong —Larry Chuen-ho Chow
December 2000Global energy outlook: an oil price scenarioanalysis — Shokri Ghanem, Rezki Lounnasand Garry BrennandThe hybrid permit cum price ceiling policyproposal: intuition from the prices versusquantities literature — Gary W YoheWorld oil reserves: problems in definitionand estimation — Ghazi M HaiderA vector autoregressive analysis of an oil-dependent emerging economy — Nigeria —O Felix Ayadi, Amitava Chatterjee andC Pat Obi
The closure of European nuclear powerplants: a commercial opportunity forthe gas-producing countries — Jean-Pierre Pauwels and Carine Swarten-broekx
September 2000Energy taxes and wages in a general equi-librium model of production — HenryThompsonResource windfalls: how to use them —Rögnvaldur HannessonEnergy consumption in the Islamic Repub-lic of Iran — A M Samsam Bakhtiari andF ShahbudaghlouOil and non-oil sectors in the SaudiArabian economy — Masudul A Choudhuryand Mohammed A Al-Sahlawi
June 2000The case for conserving oil resources: thefundamentals of supply and demand —Douglas B ReynoldsVicissitudes in the Hong Kong oil market,1980–97 — Larry Chuen-ho ChowEconomic theory and nuclear energy —Ferdinand E BanksThe economic cost of low domestic prod-uct prices in OPEC Member Countries —Nadir Gürer and Jan Ban
March 2000Energy and interfactor substitution in Tur-key— Carol Dahl and Meftun ErdoganDomestic demand for petroleum in OPECcountries — Ujjayant Chakravorty,Fereidun Fesharaki and Shuoying ZhouCyclical asymmetry in energy consump-tion and intensity: the Japanese experience— Imad A MoosaBefore demand-side management is dis-carded, let’s see what pieces should bekept — Clark W Gellings
December 1999Energy in the Caspian Sea region inthe late 1990s: the end of the boom? —Christian von Hirschhausen and HellaEngererHousehold energy demand in Kuwait: anintegrated two-level approach — M NagyEltony and Mohammad HajeehThe economics of the Nigerian liquefiednatural gas project — M Eghre-Ohgeneand O OmoleIncome determination in the GCC memberstates — Richard G Zind
Oil outlook to 2020
OPEC oil production and marketfundamentals: a causality relationship
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