1st
OPEC Conference, Baghdad, September 10–14, 1960
OPEC-The
Organization of the Petroleum Exporting Countries is a permanent,
intergovernmental Organization, created at the Baghdad Conference of September
10-14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five
Founding Members were later joined by eight other Members: Qatar (1961);
Indonesia (1962); Socialist Peoples Libyan Arab Jamahiriya (1962); United Arab
Emirates (1967); Algeria (1969); Nigeria (1971) Ecuador (1973–1992); Gabon
(1975–1994) and Angola (2007).
OPEC Headquarters Vienna,
Austria
OPEC is an
intergovernmental organization dedicated to the stability and prosperity of the
petroleum market, as enshrined in the OPEC Statute. OPEC Membership is open to
any country which is a substantial net exporter of oil and which shares the
ideals of the Organization. OPEC has 11 Countries as Members. The OPEC Member
Countries (MCs) currently supply more than 40 per cent of the world's oil and
they possess about 78 per cent of the world's total proven crude oil reserves.
OPEC
transferred its headquarters from Geneva, Switzerland, to Vienna, Austria, on 1
September 1965, and moved into the present Secretariat building in 1977.
The OPEC MCs coordinate their
oil production policies in order to help stabilize the oil market and to help
oil producers achieve a reasonable rate of return on their investments. This
policy is also designed to ensure that oil consumers continue to receive stable
supplies of oil.
The Ministers of the OPEC MCs
responsible for energy and hydrocarbon affairs meet twice a year to review the
status of the international oil market and the forecasts for the future in order
to agree upon appropriate actions which will promote stability in the oil
market.
The MCs also hold other
meetings at various levels of interest, including meetings of petroleum and
economic experts, country representatives and special purpose bodies such as
committees to address environmental affairs.
Decisions about matching oil
production to expected demand are taken at the Meeting of the OPEC Conference.
Mr.
Mohammed S. Barkindo Acting for the Secretary General
The Secretary General is the
legally authorized representative of the Organization and Chief Executive of the
Secretariat. In this capacity, he administers the affairs of the Organization in
accordance with the directions of the Board of Governors. The Conference
appoints the Secretary General for a period of three years, the term of which
may be renewed once for the same period. This appointment takes place upon
nomination by Member Countries, and after a comparative study of the nominees’
qualifications . In the absence of a unanimous decision, the Secretary General
is appointed on a rotation basis for a term of two years, without prejudice to
the required qualifications.
OPEC's objective is to
co-ordinate and unify petroleum policies among Member Countries, in order to
secure fair and stable prices for petroleum producers; an efficient, economic
and regular supply of petroleum to consuming nations; and a fair return on
capital to those investing in the industry.
The 1960s
These were OPEC’s formative
years, with the Organization, which had started life as a group of five
oil-producing, developing countries, seeking to assert its Member Countries’
legitimate rights in an international oil market dominated by the ‘Seven
Sisters’ multinational companies. Activities were generally of a low-profile
nature, as OPEC set out its objectives, established its Secretariat, which moved
from Geneva to Vienna in 1965, adopted resolutions and engaged in negotiations
with the companies. Membership grew to ten during the decade.
The 1970s
OPEC rose to international
prominence during this decade, as its Member Countries took control of their
domestic petroleum industries and acquired a major say in the pricing of crude
oil on world markets. There were two oil pricing crises, triggered by the Arab
oil embargo in 1973 and the outbreak of the Iranian Revolution in 1979, but fed
by fundamental imbalances in the market; both resulted in oil prices rising
steeply. The first Summit of OPEC Sovereigns and Heads of State was held in
Algiers in March 1975. OPEC acquired its 11th and final current Member, Nigeria,
in 1971.
The 1980s
Prices peaked at the beginning of
the decade, before beginning a dramatic decline, which culminated in a collapse
in 1986 — the third oil pricing crisis. Prices rallied in the final years of
the decade, without approaching the high levels of the early-1980s, as awareness
grew of the need for joint action among oil producers if market stability with
reasonable prices was to be achieved in the future. Environmental issues began
to appear on the international agenda.
The 1990s
A fourth pricing crisis was
averted at the beginning of the decade, on the outbreak of hostilities in the
Middle East, when a sudden steep rise in prices on panic-stricken markets was
moderated by output increases from OPEC Members. Prices then remained relatively
stable until 1998, when there was a collapse, in the wake of the economic
downturn in South-East Asia. Collective action by OPEC and some leading non-OPEC
producers brought about a recovery. As the decade ended, there was a spate of
mega-mergers among the major international oil companies in an industry that was
experiencing major technological advances. For most of the 1990s, the ongoing
international climate change negotiations threatened heavy decreases in future
oil demand.
Credit: OPEC
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