The 154th Conference and Meeting of the Organization of the Petroleum Exporting Countries (OPEC), ended last Thursday in Vienna, Austria, with a resolution by the 49-year old intergovernmental agency to focus its attention on three key issues - poverty eradication, sustainable development and greater care for the environment. OPEC's 12 members are Algeria, Angola, Ecuador, Iran, Iraq and Kuwait. The others are Libya, Nigeria, Saudi Arabia, Qatar, United Arab Emirates and Venezuela.

In a two-page communiqué, the organisation, whose members produce close to 28 million barrels of crude petroleum per day, said that its International Fund for Development has spent US$8 billion in poverty eradication programmes in several developing and needy countries in Asia, Africa and Latin America; this is in addition to bilateral aid given to deserving countries by its member-states.

The Organisation, which Nigeria joined in 1971, also resolved to protect the interests of its members at the forthcoming world climate change negotiations in Copenhagen "to ensure that their interests are properly represented in the post-Kyoto agreement, as this is drawn up." OPEC's President, Angola's Oil Minister, Jose Vasconcelos said in his opening remarks that there is much at stake at the Copenhagen negotiations "for both present and future generations in our member countries."

The two-day Vienna Conference and Meeting which was attended by a high-powered delegation from Nigeria led by the Minister of Petroleum Resources, Dr. Rilwanu Lukman, addressed the challenges of compliance with oil production quota assigned to each member-country based on many factors. Such quotas are often breached by the members, sometimes leading to glut in supply and falls in prices.

President of the Conference, Engineer Jose Maria Botelho de Vasconcelos, Angola's Minister of Petroleum said in remarks to kick-start the Conference on Wednesday night noted that: "As on so many occasions in the past, the challenges facing us at this Conference include reaching an agreement that will ensure sound supply/demand fundamentals, for the benefit of Member countries and the world at large," a sentence which analysts say betrays the concern and members' struggle with the reality of breaching production quotas. However, as usual with OPEC meetings and Conferences no accusing fingers were pointed at any of the members over such infractions.

He reported that "since we last met on May 28, 2009, there has been a general strengthening of oil prices, within a range of around US$60 to US$73 a barrel for our reference basket. This has provided welcome support for the industry's investment plans, after the gloomy outlook for much of the past year."

Although the President of the Conference coached his concerns over possible over production by members in a practiced diplomatic language, he could not hide his deep worries on the volatility of oil prices caused by high levels of speculation, dollar exchange rate fluctuations, stock market movements and unemployment trends. He noted that the price volatility should not happen "when there is plenty of crude in the market. Indeed, OECD crude oil stocks are about 10 per cent above the five-year average level. Downstream too, distillate stocks are at very high levels globally."

However, the Kuwaiti Oil Minister told journalists that even US$75 per barrel is inadequate given the falling value of the dollar. Nigeria's Oil Minister, Dr. Rilwanu Lukman who told journalists that the country now produces slightly over two million barrels of oil and condensate per day that the higher the price of oil goes, the better for his country. Later in a press conference, OPEC's Secretary General, Libya's Abdalla Salem El-Badri said that oil price should be above US$80 for OPEC members to have any meaningful benefit from their energy resources.

The price of crude oil and the value of the US dollar in which it is denominated are of great importance to OPEC members because each of them depends heavily on oil revenues for national development. Any uncertainties on the price of crude oil could derail their incomes, jeopardise their national budgets, engender political instability in some cases and retard national development in others.

The communiqué, which was read by OPEC's head of Public Relations and Information department, Dr Omar Farouk Ibrahim, expressed optimism that "the darkest days of global financial turmoil and economic recession are behind us."

It however lamented weak market fundamentals, regretted low refinery utilization rates and higher products inventories. The Conference has agreed to leave current crude production levels as it is. "In doing so, the Conference reiterated its determination to ensure sound supply fundamentals and an adequate level of spare capacity for the benefit of the world at large."

Other major decisions announced in the communiqué were the readiness of OPEC members to be on the alert to rapidly "respond to any developments which might jeopardise oil market stability and their interests." This could be a euphemism for pumping more oil should demand rise suddenly or to cut output should prices spiral downwards. The communiqué indicated the possibility of reviewing the quota allocation at the 155th Conference scheduled for Angola on December 22, 2009, depending on the market situation.

It also announced the appointment of Ecuador's Minister of Mines and Petroleum, Mr. Germanico Pinto as the next President of the Conference for one year, with effect from January 1, 2010 and also appointed Mr. Masoud Mir-Kazemi, the Minister of Petroleum of the Islamic Republic of Iran as Alternate President for the same period.

Na'inna Dambatta of the SGF's office, was at the OPEC Conference in Vienna.