Financial Times: Sudan and Angola wait at Opec’s door

By Carola Hoyos in Caracas
Published: May 31 2006 16:02 | Last updated: June 1 2006 14:15

The Organisation of the Petroleum Exporting Countries, the oil cartel, is for the first time in more than 30 years considering enlarging its membership.

Oil ministers arriving in Caracas for their meeting on Thursday were awaiting the report of Nigeria, the group’s current president, on its invitations of membership to Sudan and Angola.

Angola and Sudan, both observer members of Opec, are two of the world’s fastest growing oil producers.

Angola’s production is 1.25m barrels a day, having risen almost 80 per cent in the past decade. Sudan produces about 360,000 b/d.

Their membership would boost Opec’s share of world oil supply from 41 per cent to 43 per cent.

Abdullah bin Hamad al- Attiyah, Qatar’s energy minister, has backed the proposal, but said he was waiting for details. “I will support Sudan’s membership in Opec. Opec is an organisation for exporting countries, and Sudan right now is exporting a lot of oil.”

While Khartoum has signalled it would like to join the group, Luanda’s intentions are unclear.

Omer Mohammed Khail, Sudan’s undersecretary of energy and mining, said: “Sudan is now qualified to join Opec according to conditions set by the organisation for membership.”

Delegates cautioned that Nigeria’s invitation was the first step in a long process that could still end with the rejection of the proposal either by Opec or the candidates.

Ecuador, which was an Opec member from 1973 until 1992, this week also said it was interested in rejoining Opec.

“We’re evaluating it,” Ivan Rodriguez, Ecuador’s energy minister, told Dow Jones in Quito. “We can’t dismiss the possibility. It’s necessary to study the advantages and disadvantages. Joining OPEC could open a series of alternatives to us, but there’s still nothing definite.”

Russia and Kazakhstan have in the past decade been the two oil producers thought of as most likely to join Opec, but the countries were neither officially invited nor made a formal approach.

Edmund Daukoru, the Nigerian energy minister, said his country’s initiative was “a region contact” with important oil producers. Nigeria is keen to broaden the Opec membership of sub-Saharan countries.

Venezuela, the host of Thursday’s Opec meeting, is proposing that Bolivia, which has recently moved to nationalise its gas industry, join Opec’s observer countries. Although this status means little, it is Venezuela’s latest move to champion oil nationalism.

Bolivia in April sent its military to take over its gas fields from international oil companies.

While Venezuela has been a supporter of the move, its own campaign to wrest more control of its oil assets from international companies has been less spectacular, with most foreign companies signing up to the new terms.

Separately, Opec ministers on Wednesday indicated that the group would oppose Venezuela’s calls for a reduction in their output at their meeting.

Mr Attiyah said: “With the oil price above $70 a barrel it is difficult for Opec to propose a cut. My opinion is that everyone will support keeping the current level of production.”

A Gulf oil official pointed to strong demand, especially from Asia and the US, the threat of the next US hurricane season, and tension over Iran’s nuclear programme as reasons that oil prices will likely to remain high.

Oil prices continued to retreat on Thursday following the announcement during the previous session by the US government that it would open talks with Iran if its nuclear enrichment and reprocessing activities were suspended.

IPE Brent for July delivery fell 58 cents to $69.83 a barrel, extending its decline from the previous session while Nymex July West Texas Intermediate dropped 56 cents to $70.73 a barrel in electronic trading.

 

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