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NewsMax.com: OPEC Gets $649 Billion Windfall on Oil Boom

Tuesday, July 31, 2007 10:07 a.m. EDT

LONDON — OPEC’s oil and gas export revenue surged 22 percent to a record $649 billion in 2006 as crude prices hit an all-time high and the exporter group pumped close to full tilt, an OPEC report showed on Tuesday.

In the world’s biggest oil exporter Saudi Arabia income from petroleum exports, including crude oil, condensates and natural gas liquids, hit $194 billion last year, a rise of 20 percent, OPEC said in its Annual Statistical Bulletin.

A climb in oil prices to a record high of $78.40 a barrel for U.S. crude in July last year has fuelled economic growth in some OPEC countries. Oil is still within sight of the record, indicating another bumper year in 2007.

“OPEC members are certainly getting used to rising income, which is why they will be very careful about how much production they add to the market in coming months,” said Paul Tossetti, analyst at PFC Energy.

With prices and global demand rising last year, most members of the Organization of the Petroleum Exporting Countries were able to pump at the limit. The group began to curb supply in late 2006 as prices slid.

Dubai, the Gulf Arab trade and tourism hub, has embarked on a series of mega-projects in recent years and is home to the world’s tallest building, Burj Dubai, a tower being built.

OPEC, expanded to 12 countries with the entry of Angola on Jan. 1, pumps more than a third of the world’s oil. The OPEC report revised figures for previous years to include the West African country.

Angola, enjoying an oil boom after a 27-year civil war ended in 2002, is building dozens of hotels and guesthouses to meet rising demand that has pushed the price of a room in the capital Luanda to $250 a night.

WEAK DOLLAR

OPEC has expressed concern about the drop in the value of the U.S. dollar eroding members’ purchasing power and says that has dulled the impact of oil’s rise.

Mohammed al-Hamli, OPEC President and UAE Energy Minister, told Reuters earlier this month that, adjusted for inflation and the dollar, the cost of a barrel is no higher than it was three decades ago.

Iran, locked in a dispute with Washington over its nuclear work, recently asked Japanese buyers to pay in yen rather than dollars. But Gulf Arab producers have shown little interest in shifting to other currencies.

OPEC sits on three-quarters of the world’s proven crude oil reserves and said its resources rose in 2006.

Reserves grew to 922 billion barrels from 913 billion in 2005, the report said, mainly reflecting an increase in Venezuela.

Estimates of reserves have come under greater scrutiny in recent years partly after Anglo-Dutch oil company Royal Dutch Shell in 2004 said it overstated the size of its holdings for years.

Analysts have questioned the size of Saudi Arabia’s reserves — denied by Riyadh — and Kuwait has dismissed reports that its reserves are around half those officially stated.

OPEC’s natural gas reserves fell slightly to 89 trillion cubic metres due mainly to a drop in Iranian reserves, the report said.

A strain on the world’s oil refineries has fed into the rise in oil prices and the OPEC report showed capacity in member-countries rose slightly last year.

Refining capacity stood at 9.23 million barrels per day in 2006, up from 9.09 million bpd in 2005, it said.

© Reuters 2007. All rights reserved.

http://www.newsmax.com/money/archives/st/2007/7/31/100913.cfm?s=mo

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