OPEC official statements

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1 OPEC official statements OPEC Secretariat TO THE CASUAL OBSERVER, the image of OPEC is of an Organization whose principal purpose is to sell oil on world markets. But OPEC has many sides to it and its Member Countries are also committed to broader issues, notably in alleviating hardship and poverty in developing nations and helping them stimulate their economies; of special significance here is the OPEC Fund for International Development. Therefore, in addition to focusing its energies on achieving an orderly oil market, with secure supply, reasonable prices and fair returns to investors, OPEC plays an active role elsewhere in the international economic arena, tackling such crucial topical issues as sustainable development, climate change and world trade. The three attached official statements, delivered by the OPEC Secretary General, Dr Alvaro Silva Calderón, within two months of each other in August October 2002, provide an insight into OPEC s current thinking on global energy, economic development and environmental issues. December Organization of the Petroleum Exporting Countries 355

2 OPEC s objectives, according to its published documents OPEC Statute, 1965 A. The principal aims of the Organization shall be the coordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively. B. The Organization shall devise ways and means of ensuring the stabilisation of prices in international oil markets, with a view to eliminating harmful and unnecessary fluctuations. C. Due regard shall be given at all times to the interests of the producing nations and to the necessity of securing: a steady income to the producing countries; an efficient, economic and regular supply of petroleum to consuming nations: and a fair return on their capital to those investing in the petroleum industry. Declaratory Statement of Petroleum Policy in (OPEC) Member Countries, 1968 This referred to the inalienable right, as expressed by the United Nations, of all countries to exercise permanent sovereignty over their natural resources in the interests of their national development. It claimed that the exploitation of OPEC s indigenous, exhaustible resources should be aimed at securing the greatest possible benefit for its Member Countries. Solemn Declaration, 1975 This was adopted by a Conference of OPEC Sovereigns and Heads of State in Algiers, Algeria (now referred to as the First OPEC Summit ). It carried the proposal for a New International Economic Order, aimed at promoting a more equitable global economic system, with particular emphasis on alleviating poverty and other injustices affecting developing countries, by encouraging greater interdependence among nations from the North and South. Solemn Declaration, 2000 This was adopted by the Second Summit of Heads of State and Government of OPEC Member Countries, in Caracas, Venezuela, in It recognised the strategic importance of oil as an energy source for mankind and as an important contributor to world economic prosperity, sustainable development and the elimination of poverty. It emphasised the strong link between security of supply and the security and transparency of world oil demand. It urged improved dialogue and cooperation within the industry, particularly between OPEC and non-opec producers and between producers and consumers. And it called for fairness in fiscal regimes, with regard to petroleum, as well as a balanced, equitable outcome to the ongoing United Nations climate change negotiations Organization of the Petroleum Exporting Countries OPEC Review

3 Statement by the OPEC Secretary General, Dr Alvaro Silva Calderón, to the World Summit on Sustainable Development in Johannesburg, South Africa, on 30 August 2002 ON BEHALF OF THE OPEC Member Countries, I extend my gratitude to President Thabo Mbeki, and to the Government and people of South Africa for hosting the World Summit on Sustainable Development. It is a great honour to be in Johannesburg where so many Heads of State from both developing and developed countries are gathered. The new South Africa is known for her commitment to social justice. Let us hope that her wisdom will influence this Summit to affect a meaningful change in the world. Despite the commitments of Agenda 21 taken in Rio ten years ago, there is an alarming rise in poverty worldwide. It is important then that the global community regroups in Johannesburg to find new impetus and practical solutions to help eradicate poverty, in a manner consistent with broader environmental objectives. Energy remains one of the key elements for developing countries to realise their growth potential. Yet, worldwide, two billion people have no access to modern forms of energy. For too long, communities across the globe have had to rely on traditional forms of energy, which may be polluting, inefficient and pose threats to their health. These communities have the same right as consumers in richer parts of the world to cleaner, more efficient forms of energy, which will support them on the path to sustainable development. In the next 20 years, energy demand in developing countries will grow at three to four times the rate as that of industrialised countries, if present, pre-johannesburg trends continue. This highlights an urgent need to expand energy infrastructure and international investment in these countries. Oil and gas, with their abundant resource base, will be crucial in meeting the global energy needs and challenges for achieving sustainable development. Advances in technology continue to make oil a cleaner fuel, while the impressive environmental credentials of gas are obvious. The successful development of carbon dioxide sequestration technology will ensure that fossil fuels, including oil, are entirely compatible with sustainable growth. While renewables will be an increasing part of the energy mix in the future, the continued development of clean fossil fuels will be, in most cases, more feasible than costly alternatives. Clean fossil fuels will provide a clear and easy path for the world s poorest countries to take on their road to growth. We need to firmly keep our focus on the Principles of Rio, especially concerning common but differentiated responsibilities. Industrialized countries, which have enjoyed unrestrained growth over the last century, should clearly assume a greater burden in solving these common problems. Any attempt to lessen the responsibility of developed countries would amount to an erosion of the entire sustainable development process. December Organization of the Petroleum Exporting Countries 357

4 The World Summit on Sustainable Development will present the global community with a new test. Its impact must be felt in the war on poverty. Ultimately, the Summit will be judged by our measure of selflessness, will and real commitment to make sure that a sustainable world is part of our future. The Organization of the Petroleum Exporting Countries This is a permanent, inter-governmental Organization, formed in Baghdad, Iraq, on 14 September The Founder Members are the Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. OPEC s six other Members are Qatar (which joined in 1961), Indonesia and the Socialist People s Libyan Arab Jamahiriya (both 1962), the United Arab Emirates (which took over the Membership of Abu Dhabi (1967) in 1974), Algeria (1969) and Nigeria (1971). OPEC s objectives are shown two pages before this page. OPEC transferred its headquarters from Geneva, Switzerland, to Vienna, Austria, on 1 September The OPEC Fund for International Development This is a multilateral development finance institution seeking to promote cooperation between OPEC Members and other developing countries. It was set up in 1976 as the OPEC Special Fund, as a consequence of the Solemn Declaration of 1975, where it was stated that OPEC Member Countries were prepared to... extend additional special credits, loans and grants for the development of developing countries. It acquired its present title in Over the years, the OPEC Fund has spread its loans and grants to 110 countries, in Africa, Asia, Latin America, the Caribbean and Europe. Including grants and contributions to other institutions, the Fund s total approved commitments, as of the end of 30 September 2002, stood at US $6,479 million, with disbursements reaching $4,275m. The OPEC Fund has always been based in Vienna, Austria Organization of the Petroleum Exporting Countries OPEC Review

5 Statement by the OPEC Secretary General, Dr Alvaro Silva Calderón, to the Eighth International Energy Forum in Osaka, Japan, on 21 September 2002 IT IS THE RIGHT OF every man, woman and child on the Earth to live in a healthy, clean and safe environment, where there is sufficient energy available to meet their normal everyday needs, as well as to develop their economies and enhance their lives in a sustainable manner. This is the equal right of rich and poor alike. Energy producers and consumers should be in solidarity with each other over the merit of this fundamental principle of mankind. We should recognise that we have common, but differentiated responsibilities in this regard, in accordance with our prosperity and our ability to make a meaningful contribution. This principle constituted the essence of the Earth Summit in Johannesburg; there, a clear connection was made between energy supply, sustainable development and the eradication of poverty throughout the world. Producer-consumer dialogue provides an important means of collectively assessing the situation and identifying the challenges that lie before us. The International Energy Forum aims to build confidence, exchange information and develop a better understanding of the underlying energy issues affecting the world. However, we believe this does not go far enough; there should be more emphasis on finding solutions to the world s energy problems. OPEC is committed to producer-consumer dialogue. We have been heavily involved in all the meetings of the International Energy Forum, across four continents, since the first one was held in Paris in We have watched the Forum go from strength to strength, in terms of participation, particularly at Ministerial level from consumer nations, and in terms of the seriousness and commitment to the issues under discussion. OPEC Member Countries have twice hosted the Forum my own country of Venezuela had the honour in 1995 and Saudi Arabia organised the last meeting two years ago. Algeria, Qatar and Venezuela have also been co-hosts like the United Arab Emirates at this meeting. We should like to thank the distinguished hosts, Japan, assisted by the co-hosts, the UAE and Italy, for the excellent organisation of this Eighth International Energy Forum. Let us now briefly look at the extent of the energy challenge facing us. Forecasters agree that world energy demand will continue to grow for the foreseeable future. OPEC s World Energy Model projects growth of around two per cent a year up to 2020, with demand in developing countries rising at three-to-fourtimes the rate of that of industrialised countries. In absolute numbers, world commercial energy demand is forecast to rise from close to nine billion tonnes of oil equivalent in 2000 to more than 13 billion tonnes of oil equivalent in Ninety-five per cent of the additional demand is expected to be met by fossil fuels, which will account for 91 per cent of demand in This market share is December Organization of the Petroleum Exporting Countries 359

6 slightly higher than in The reason is a five percentage point swing towards gas mainly due to its favourable environmental credentials, its sound reserve base and the technological advances made in combined-cycle generation. Gas will capture market share from each of the other main commercial energy sources, to reach a figure of 28 per cent by But this will still be below the 38 per cent of oil, although it will have overtaken that of solids, which will fall to 25 per cent. Therefore, about two-thirds of the world s commercial energy is expected to come from petroleum in other words, oil and gas in This is due to petroleum s sufficient reserve base, its long-established infrastructure throughout the production and distribution chain, and its inherent qualities, such as its versatility and ease of transport. On top of this are the enormous advances in clean technology that are being made throughout the industry, to meet the increasingly stringent environmental regulations and other legislative measures. Petroleum has the potential to provide energy that is friendly to the environment, while the renewable energy industry is being developed. The fact that OPEC possesses around four-fifths of the world s proven crude reserves and yet accounts for only about two-fifths of daily output means that consumers will come to rely increasingly upon OPEC crude. OPEC also has sufficient supplies of natural gas, and some of our Member Countries are increasingly switching their focus to this energy source. But massive investment is required in production capacity and distribution, to meet the forecast increase in demand, notably for the costlier clean fuels. Generating this investment involves all parties in the petroleum industry, since the large sums of money involved are beyond the means of most producers. There are clear advantages in investing in OPEC s low-cost, abundant reserves, and our Member Countries have greatly improved their investment conditions in recent years. In conclusion, therefore, we see steadily increasing demand in a global community that is more conscious of environmental issues and the needs of impoverished nations in their quest for sustainable development. The International Energy Forum provides a unique opportunity for producers and consumers to discuss under one roof the implications of all of this for the energy industry and to seek solutions which will help eradicate poverty throughout the world Organization of the Petroleum Exporting Countries OPEC Review

7 Statement by the OPEC Secretary General, Dr Alvaro Silva Calderón, to the High-level Segment at the Eighth Conference of the Parties to the United Nations Framework Convention on Climate Change in New Delhi, India, on 30 October 2002 OVER THE PAST decade, OPEC and its Member Countries have taken a keen and active interest in the ongoing climate change negotiations. This is because, like other countries, we seek to create a cleaner, healthier and safer world in which to live, and to do this in a manner which is consistent with sustainable development, from which present and future generations worldwide will benefit. We recognise that, as fossil fuel producers from the developing world, we can make an important contribution to the course of these negotiations, which are wideranging and complex in scope. We welcomed the inclusion of the climate change issue into the discussions at the World Summit in Johannesburg, which focused on the objectives of poverty eradication and the promotion of economic development, in harmony with social development and the protection of the environment. Access to advanced forms of energy services has a central role to play in achieving these objectives. However, while there is the understandable call to develop renewables, the fact remains that the technology is still in its infancy. Therefore, while the renewable energy industry is being developed, all other available resources, which are friendly to the environment, must also be accessed, enhanced and utilised to tackle the dire problems of mankind and ensure sustainable development. Petroleum will feature prominently in this. Advances in technology continue to make oil and gas cleaner fuels. The successful development of carbon dioxide sequestration technology will ensure that fossil fuels, including oil, continue to serve the needs of mankind for the foreseeable future. As the Conference of the Parties to the United Nations Framework Convention on Climate Change assesses the realities of implementing the Kyoto Protocol, we remind it of the need to do this in a way which avoids a net detrimental impact on fossil fuel producers in accordance with Article 4.8 of the Framework Convention and Articles 2.3 and 3.14 of the Kyoto Protocol. We also remind it of Article 4.9, which stipulates that adequate provision should be made for the transfer of technology and funding to the poorer countries of the world; this will enable them to develop their backward economies in a sustainable manner and in full harmony with the needs of the environment. It should be stressed here that poorer nations have the same rights as richer nations to all the necessary support and funding for research into climate change issues, and that every effort should be made to ensure that this happens at all times. Moreover, we need to keep our focus firmly on the principle of common but differentiated responsibilities. Industrialised countries, whose activities over decades December Organization of the Petroleum Exporting Countries 361

8 and even centuries have been responsible for the lion s share of adverse impacts on the environment, should recognise and honour their obligation to provide the lion s share of the response measures. Finally, as I said earlier, the whole issue of climate change is a complex one. But the benefits are simple, since we all stand to gain from making the world a cleaner, healthier and safer place to live in Organization of the Petroleum Exporting Countries OPEC Review