February 2002 1

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P u b l i s h e r sOrganization of the PetroleumExporting Countries, Obere Donau-strasse 93, 1020 Vienna, Austria.

Telephone: +43 1 211 12/0;Telefax: +43 1 216 4320;Public Relations & InformationDepartment fax: +43 1 214 9827.E-mail: prid@opec.orgE-mail: OPEC News Agency: opecna@opec.orgWeb site: http://www.opec.org.Hard copy subscription: $70/12 issues.

M e m b e r s h i p a n d a i m sOPEC is a permanent, intergovernmental Or-ganization, established in Baghdad, September10–14, 1960, by IR Iran, Iraq, Kuwait, SaudiArabia and Venezuela. Its objective is to co-ordinate and unify petroleum policies amongMember Countries, in order to secure fair andstable prices for petroleum producers; an effi-cient, economic and regular supply of petro-leum to consuming nations; and a fair returnon capital to those investing in the industry.

The Organization comprises the fiveFounding Members and six other Full Mem-bers: Qatar (joined in 1961); Indonesia (1962);SP Libyan AJ (1962); United Arab Emirates(Abu Dhabi, 1967); Algeria (1969); andNigeria (1971). Ecuador joined the Organiza-tion in 1973 and left in 1992; Gabon joined in1975 and left in 1995.

S e c r e t a r i a t o f f i c i a l sSecretary General Dr Alí Rodríguez Araque

Director,Research Division Dr Adnan Shihab-Eldin

Head,Energy Studies Department Dr Rezki Lounnas

Head, Petroleum MarketAnalysis Department Javad Yarjani

Head, Data ServicesDepartment Dr Muhammad A Al Tayyeb

Head, PR & InformationDepartment Farouk U Muhammed, mni

Head, Administration &Human Resources Department Senussi J Senussi

Head, Office of theSecretary General Karin Chacin

Legal Officer Dolores Dobarro

W e b s i t eVisit the OPEC Web site for the latest news andinformation about the Organization and itsMember Countries. The URL is

http://www.opec.org

T h i s m o n t h ’ s c o v e r . . .shows LNG tankers at the Ras Laffan port in Qatar,which is building a third LNG train as part of its plansto boost exports (see Newsline beginning on page 11).Photo courtesy Qatar Petroleum.

2 N O T I C E B O A R DForthcoming conferences and other events

3 C O M M E N T A R YA realistic alternativeUS President Bush’s long-awaited alternative to the KyotoProtocol has positive implications for developing nations

4 F O R U MOPEC and the new-old realities of the international oil marketBy Dr Alí Rodríguez Araque, OPEC Secretary General

28 B O A R D O F G O V E R N O R SOPEC Board of Governors holds its 105th Meeting

11 N E W S L I N EEnergy stories concerning OPEC and developing countries

19 M A R K E T R E V I E WOil market monitoring report for January 2002

37 M E M B E R C O U N T R Y F O C U SFinancial and development news about OPEC Countries

42 O P E C F U N D N E W SRecent loans and grants made by the OPEC Fund

45 S E C R E T A R I A T N O T E SOPEC Secretariat activities

47 A D V E R T I S I N G R A T E SHow to advertise in this magazine

48 O R D E R F O R MPublications: subscriptions and single orders

49 O P E C P U B L I C A T I O N SInformation available on the Organization

Indexed and abstracted in PAIS International

Vol XXXIII, No 2 ISSN 0474-6279 February 2002

2 OPEC Bulletin

N O T I C E B O A R D

Forthcoming events

Prague, Czech Republic, March 17–22, 2002,training course on The gas chain — fromreservoir to burner tip. Details: Kate Wright,Alphatania, EconoMatters Ltd, RodwellHouse, 100 Middlesex Street, London E17HD, UK. Tel: +44 (0)207 650 1430/1402;fax: +44 (0)20 7650 1431/1401; e-mail:training@alphatania.com; Web site:www.alphatania.com.

Rio de Janeiro, Brazil, March 18–19, 2002,2nd annual conference on Latin gas 2002: gasbusiness opportunities & LNG-GTL strategies up-stream & downstream. Details: Global Pacific& Partners. Tel: +27 11 778 4360; fax: +2711 880 3391; e-mail: info@glopac.com; Website: www.petro21.com/events.

Cambridge, UK, March 18–22, 2002, train-ing course on Economics of the oil supply chain.Details: Kate Wright, Alphatania,EconoMatters Ltd, Rodwell House, 100 Mid-dlesex Street, London E1 7HD, UK. Tel: +44(0)207 650 1430/1402; fax: +44 (0)20 76501431/1401; e-mail: training@alphatania.com;Web site: www.alphatania.com.

Tbilisi, Georgia, March 19–21, 2002,GIOGIE 2002, 1st Georgian international oil,gas, energy and infrastructure exhibition andconference. Details: Dan Coberman, ITEGroup PLC, 105 Salusbury Rd, London NW66RG, UK. Tel: +44 (0)207 596 5000; fax:+44 (0)207 596 5111; e-mail: dan.coberman@ite-exhibitions.com; www.ite-exhibitions.com.

Houston, Tx, USA, March 19–21, 2002,training course on Aviation jet fuel. Details:QinetiQ Fuels and Lubricants Centre,Building 442, QinetiQ Pyestock, CodyTechnology Park, Ively Road, Farnborough,Hants, GU14 0LX, UK. Tel: +44 (0)1252374772; fax: +44 (0)1252 374791; e-mail:pcarberry@QinetiQ.com; www.qinetiq.com.

Amsterdam, the Netherlands, March 20–21,2002, 8th annual event, Flame 2002: Euro-pean gas — strategies for survival in a changingenergy market. Details: Flame 2002, Confer-ence Administrator, ICBI, 8th floor, 29Bressenden Place, London SW1E 5DR, UK.Tel: +44 (0)20 7915 5103; fax: +44 (0)207915 5101; e-mail: icbi_registration@icbi.co.uk;Web site: www.icbi-flame.com.

London, UK, March 20–22, 2002, Pricingand capacity in oil refining conference. Details:SMi Customer Services. Tel: +44 (0)870

Tehran, IR IranMay 18–19, 2002

4th Iranpetrochemical forum

Details: IICIC SecretariatTel: +9821 2048859Fax: +9821 2044769E-mail: ifp@iicic.comWeb sites: www.nipc.net www.iicic.com

9090711; e-mail: jantill@smi-online.co.uk;www.smi-online.co.uk/oilrefining.asp.

London, UK, March 25–28, 2002, trainingcourse on Introduction to petroleumgeoengineering. Details: NexT, Prof PatrickCorbett, Heriot-Watt University, e-mail:Patrick.Corbett@pet.hw.ac.uk.

Bahrain, April 9–10, 2002, Gulf investmentforum. Details: Melinda Addison, LogisticsManager. Tel: +44 (0)20 7779 8571; fax: +44(0)20 7779 8795; e-mail: maddison@euromoneyplc.com; www.euromoneyplc. com.

London, UK, April 17–18, 2002, interna-tional conference on Top ten targets 2002.Details: Global Pacific & Partners. Tel: +2711 778 4360; fax: +27 11 880 3391; e-mail: info@glopac.com; Web site: www.petro21. com.

Brussels, Belgium, April 18–19, 2002, inter-national conference on Electricity & gas 2002.Details: Global Business Network Ltd, 9Wimpole St, London W1M 8LB, UK. Tel:+44 (0)20 7291 1030; fax: +44 (0)20 72911001; e-mail: alex.gerber@gbnuk.com; Website: www.gbnuk.com.

Moscow, Russia, April 23–25, 2002, G & O2002, international gas & oil exhibition.Details: SV Congrès, 28 rue Massena 06000nice, France. Tel: +33 493 870308; fax: +33493 821537; e-mail: svcongres@mailcity.com.

London, UK, May 23–24, 2002, 4th annualconference on Angola oil and gas summit.Details: IBC UK Conferences. Fax: +44 (0)207436 8377; e-mail: sherri.wasmuth@informa.com.

London, UKMay 2–3, 2001

Oil and gas investments inNigeria 2002

Details: CWC Associates3 Tyers GateLondon SE1 3HX, UKTel: +44 (0)20 7089 4200Fax: +44 (0)20 7089 4201E-mail: bookings@ thecwcgroup.comwww.thecwcgroup.comwww.ibcenergy.com/eq1090

Lisbon, Portugal, May 14–15, 2002,Lusophone oil & gas 2002: exploration oppor-tunities, development & energy investments.Details: Global Pacific & Partners. Tel: +2711 778 4360; fax: +27 11 880 3391; e-mail:info@glopac.com; Web site: www.petro21.com/events.

Paris, France, May 21–22, 2002, interna-tional conference on Sanctioned oil states 2002:strategies, conflicts, legalities, investments &issues, sanctioned, marginalized & impactedstates. Details: Global Pacific & Partners. Tel:+27 11 778 4360; fax: +27 11 880 3391; e-mail: info@glopac.com; Web site: www.petro21.com/events.

Darussalam, Brunei, May 27–30, 2002,Gasex 2002: powering sustainable growth. De-tails: RAI Group, 226/36-37 Bond Street,Riviera Tower 1, Muang Thong Thani, Bang-pood, Pakkred Nonthaburi, 11120 Thailand.Tel: +662 960 0141; fax: +662 960 0140; e-mail: gasex@bkkrai.com; www.gasex2002.com.

Baku, Azerbaijan, June 4–7, 2002, Caspianoil & gas 2002 — new focus on opportunity forcontracting and supply companies. Details:Spearhead Exhibitions, Coombe Hill House,Beverley Way, London SW20 0AR, UK. Tel:+44 (0)20 8949 9222; fax: +44 (0)20 89499868; e-mail: caspian@spearhead.co.uk;www.caspianoilgas.co.uk.

Monte Carlo, Monaco, June 6–7, 2002,2002 European oil refining conference & exhi-bition. Details: DRI WEFA, WimbledonBridge House, 5th Floor, 1 Hartfield Road,London SW19 3RU, UK. Tel: +44 (0)208544 7904; fax: +44 (0)20 8544 7809; e-mail: karen.yarranton@dri-wefa.com; Website: www.dri-wefa.com.

February 2002 3

C O M M E N T A R Y

A realistic alternativeUS President Bush’s long-awaited alternative to the Kyoto

Protocol has positive implications for developing nations

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Almost one year ago, in March 2001,US President George W Bush pro-voked a storm of global outrage

when he announced that his country wouldnot support the Kyoto Protocol. Citing suchfactors as the potential damage to US eco-nomic competitiveness that signing theProtocol could cause, President Bush turnedhis back on Kyoto, essentially reversing theapproach of the Clinton Administration.Amid the howls of protest from Europe,Japan and elsewhere, there was much talkin the USA about the need to work out analternative approach to Kyoto, but nothingmuch concrete actually emerged in themonths that followed. Then came Septem-ber 11, and environmental issues under-standably took a back seat for the time being.

Earlier this month, however, the Presi-dent’s long-awaited ‘alternative to Kyoto’was finally unveiled. In a wide-rangingspeech delivered, appropriately enough, atthe National Oceanic and AtmosphericAdministration in Maryland, President Bushacknowledged the fact that “addressingglobal climate change will require a sus-tained effort over many generations.” Hespoke not only of the importance of en-couraging measures to ensure that theUnited States pursues a path of environ-mentally-sound economic growth by mak-ing greater use of, inter alia, cleaner fuelsand more efficient energy technologies, butalso of the need to “foster economic growthin the developing world, including theworld’s poorest nations.”

It is not our purpose here to examinethe finer details of the President’s new ini-tiative, such as its focus on cutting the in-tensity of greenhouse gas emissions (ie, theratio of emissions to economic output) by18 per cent over the next ten years. How-ever, if one key element of the US proposalscan be singled out for praise, it is the factthat the new approach recognizes that eco-nomic growth is the solution, not the prob-

lem. These two factors — economic growthand a cleaner environment — far from beingmutually exclusive, as some parties appearto believe, are in fact inextricably inter-twined, not least because, as the Presidentnoted, “a nation that grows its economy isa nation that can afford investments andnew technologies.”

One of OPEC’s principal objections tothe Kyoto Protocol is that, if implementedas originally conceived, it could end updenying developing countries (especiallythose which, like the OPEC Member Coun-tries, are heavily reliant on oil export rev-enues) their universally-acknowledged rightto development. The financial losses thatOPEC nations would suffer would run intomany billions of dollars — money that couldotherwise be invested in helping to signifi-cantly uplift their peoples’ standard of living.

By contrast, the Bush approach speaksof working with the developing world to“help them realize their potential, and bringthe benefits of growth to their peoples,including better health, and better schoolsand a cleaner environment.” And while thePresident added that he would not inter-fere with the plans of any nation to ratifythe Kyoto Protocol if they felt that was thebest way forward, he stated clearly that hefelt his proposals amounted to “a betterapproach, (so) that we can build our futureprosperity along a cleaner and better path.”

Do the measures announced by Presi-dent Bush really amount to a “better alter-native to the Kyoto Protocol,” as the WhiteHouse has emphatically stated? Only time,and practical experience, will tell. Indeed,the President himself has explicitly acknow-ledged that further measures may be neededin the future if the current package does notbring the desired progress. For the moment,however, the US moves deserve to be wel-comed as an approach that takes into ac-count the needs and aspirations of all nationson this Earth, rich and poor alike.

4 OPEC Bulletin

F O R U M

one’s interest. Oil price stability, and thenecessary co-operation to achieve that, isreally the only way forward. As a result,many leading industrialized countries havestepped up their consultation with OPECto achieve stable prices. They too, areconvinced of the need to deliver reliable,long-term energy to consumers at a rea-sonable price.

Before we revert to history to helpexplain the present, let me briefly examineon the reasoning behind the OPEC/non-OPEC agreement to cut almost 2.0 mil-lion barrels/day of oil output from themarket, which was confirmed in Cairo atthe end of December last year. Since theSeptember 11 attacks on the United States,oil producers have been faced with a sce-nario of low projected demand due to theworld economic downturn and the subse-quent recession in the United States andseveral other countries.

This state of affairs was coupled withhigher levels of non-OPEC output due tocome onstream this year — particularlyfrom Russia. These scenarios, however,are not new to oil producers. For example,the Asian financial crisis of 1997-98 trig-gered a similar situation to what we arecurrently experiencing post-September11 — surplus oil and weak demand —which saw oil prices collapse to as low as$10/b.

The events of 1998 caused a sea changethroughout the entire oil industry, due todownsizing, cutbacks in budgets, spend-ing and production, to the unprecedentedwave of mergers and acquisitions that weare still experiencing. In the United Statesat the time, many thousands barrels perday of oil production from stripper wellswere shut in because low prices had madethem uneconomical.

The importance of OPEC’sefforts to bring stability to theinternational oil market isunderscored by their stronghistorical precedent, notes theOrganization’s SecretaryGeneral, Dr Alí RodríguezAraque, in this article.*

* Based on Dr Rodríguez Araque’s address tothe Venezuelan-American Association of theUnited States, New York, February 4, 2002.

Beginning from a historical perspec-tive, this article will first of all lookat how oil markets have been

managed since the Texan oil boom andbust cycle of the 1920s, to the formationof OPEC in 1960 and beyond. Theintention is to underline the fact that oilmarkets need some type of regulation,other than the forces of supply and de-mand.

Without it, threats to the security of oilsupply due to boom/bust cycles serve no

However, after two OPEC cuts in1998 which did not have the desired ef-fect, it was really the joint OPEC/non-OPEC reductions of March 1999 that setthe oil market — and in fact the whole oilindustry — on the road to recovery.

This is the same strategy OPEC iscurrently pursuing, although the Organi-zation would be the first to admit that itwas much quicker to react this time. Con-sequently, at its Meeting in Cairo in De-cember, OPEC reaffirmed that it wouldcut production in conjunction with itsnon-OPEC partners — Russia, Norway,Mexico, Oman and Angola — to avert asimilar price collapse to that of 1998.

Prudent tacticsOf course, one can argue whether such

tactics are prudent at a time when majoreconomies are in recession. Some arguethat oil producers have looked to shore uptheir income in the short term, at theexpense of a prolonging the recession.While that argument may sound convinc-ing, an experienced observer knows that ifprices stayed depressed for some time, oilstock levels would rise, which in turncould keep crude prices at rock bottom fora protracted period of time. If this were thecase, the entire oil industry would be af-fected, as it was in 1998.

The ramifications that low prices haveon the industry are severe, so much so, thatafter the Asian financial crisis, consumingcountries encouraged OPEC’s decision tocut production to rescue prices. The UnitedStates was particularly concerned aboutrecovering its lost production. Britain andNorway had their output costs to considerin the North Sea, and they were concernedover how long they could sustain lowprices.

OPEC and the new-old realitiesof the international oil market

February 2002 5

F O R U M

Oil companies suffered more perma-nent changes, as mentioned earlier. An-other lasting ramification of 1998 is thatoil companies still remain hesitant to com-mit themselves to billions of dollars ofinvestment, in high-cost areas, that makereturns more risky. In fact, it is expectedthat the oil majors’ fourth quarter earningsfor 2001 will be dismal after low crude oilprices have taken their toll on profits.Again, it is only stable prices that willproduce sufficient levels of investment inthe industry, which in turn guarantees thesecurity of supply in the long-term.

Market shareAnother risk related to unstable oil

prices is when market share becomes anissue for oil producers. Oil producers havehopefully learnt the bitter lessons of thoseyears when market share was pursued atthe expense of stable prices. On eachoccasion, there was a disastrous effect onprices, in that they sank to unreasonablylow levels. As a result, petroleum pro-ducers had to change their strategy andpolicies, and instead stick to the quotasystem.

Prior to the introduction of OPECquotas in the early 1980s, we must askourselves whether world petroleum mar-kets managed to function adequately with-out them, earlier in the twentieth century?The answer is quite simply, no. Oil mar-kets, left to supply and demand as the onlyregulating forces, tend to generate suddenand huge variations in prices, from boomto bust, in a way that is unacceptable tonatural resource owners, investors andconsumers. This has been acknowledgedfirst and foremost by the United States —historically the most important oil pro-ducing country in the world.

Let us examine the situation in theUnited States in the late 1920s and early1930s. This was when the producing states,and above all Texas, began to regulateproduction, setting up a system of pro-rationing. Based on the idea of conserva-tion of natural resources, every single wellwas assigned a maximum efficient rate(MER). Nobody was allowed to produce athigher rates, which would damage thewells. It still operates in this way today. Aconsequence of overproduction is a lowrecovery rate of crude oil when the totalaccumulated output is measured.

At the time, conservation was also re-lated to price stability. Experience of oilgluts had advanced opinion that crude, anexhaustible natural resource, would bewasted at unreasonably low prices. Conse-quently, the Texas Railroad Commission— in charge of pro-rationing — forecastdemand, month by month.

In the 1930s, the Texas Railroad Com-mission, originally a railroad company,assumed the responsibility of regulatingoil production by distributing those de-mand figures to the wells. This was done inthe form of ‘allowables’ — which was apercentage of MER they were allowed toproduce. Marginal wells, of course, werealways allowed to produce at 100 per cent,because they would have had to be shutdown and abandoned otherwise, with nopossibility of later recovery, and the de-finitive cost of the remaining natural re-source.

Of course, in years of high demand,the companies were authorised to produceat 100 per cent MER, but in years of lowdemand, it could be as low as 40 per cent.Although Texas was the most importantoil-producing state, it could not cope withthe problem alone. Consequently, in 1935,the Interstate Oil Compact Commission

(or IOCC, which is today known as theInterstate Oil & Gas Compact Commis-sion) was created to co-ordinate the quotasof the most important oil-producing statesof America.

The IOCC can be seen as the immedi-ate and logical precursor of OPEC. LikeOPEC at present, however, the time camewhen it could no longer regulate the mar-kets alone. In the 1930s, the USA pro-duced about two-thirds of world oil,whereas in the 1950s, that figure camedown to less than half, and since 1947, thecountry has become a net importer. Asproduction in the USA declined, and otheroil came onstream, the most importantproducing and exporting countries of thewestern hemisphere were invited to joinin, albeit as observers. Venezuela andCanada used to attend the IOCC meet-ings.

But with the growing importance ofoil from the eastern hemisphere at thetime, the efforts of the IOCC were nolonger enough either. By 1959, the IOCC— informally assisted in its efforts by thebig international oil companies — couldno longer maintain an equilibrium, whichmeant one price structure in world petro-leum markets.

Cheap oil from the exporting coun-tries threatened the domestic industry inthe USA. Hence, the country decided toimpose official import quotas on oil at thesame time that OPEC was formed torestore world market prices to levels con-sistent with US domestic prices.

Joining forcesIf the history of oil were to bear

witness, world petroleum markets todaycannot do without OPEC — this is de-spite the unfair accusation of OPECbeing labelled a ‘cartel’. Many an aca-demic and oilman has argued the casefor OPEC over the years.

The Organization, however, cannotdo its regulating job properly withoutthe co-operation of the most importantnon-OPEC exporting countries. Thus,we have to continue to join forces withother major oil-exporting countries, aswe did recently in Cairo, and in the late1990s.

The ultimate question one must askoneself is whether the system is workingproperly or, at least, reasonably well? There

‘OPEC cannotdo its regulatingjob properlywithout theco-operationof the mostimportantnon-OPECoil-exportingcountries.’

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F O R U M

is a strong case for arguing that, yes, it is.After many years of turmoil, of structuralimbalance, it appears that that there is aprocess towards a new equilibrium. Thatmeans a price level is emerging that is moreor less acceptable to all the parties con-cerned: the natural resource owners, in-vestors, and consumers.

Equilibrium priceOPEC has pinpointed $25/b as being

the price of equilibrium, which takes intoconsideration adequate levels of invest-ment to ensure the security of supply. Ofcourse, in times of recession and falling oilprices, the intent is more on getting pricesback within OPEC’s price band of $22-28/b. With co-operation from non-OPEC,this should be possible.

OPEC’s price band has increasinglyreceived more support from the world’sleading industrialised countries. SeniorUS Administration officials, commentingon high gasoline prices in America at timesin the recent past, have said that thoseprices had nothing to do with the price ofcrude oil, and that OPEC had very little todo with the situation.

In fact they have made it clear thatOPEC should not be made to shoulder theblame for high gasoline prices, but that theproblems pointed to a lack of refinerycapacity in the United States. Specifically,it was mentioned that OPEC crude oiloutput levels and prices had been stable

protect against erratic price trends. She hassaid quite plainly: “It is no more in Eu-rope’s interest to have prices which are toolow, than prices which are too high.”

This has been OPEC’s position formany years. OPEC is an Organizationthat co-ordinates the policies of its MemberCountries, from different regions aroundthe globe. OPEC’s task, therefore, is todefend the legitimate rights of these sover-eign countries regarding the crucial natu-ral resource they all possess — namely oil.

Fair agreementAt the same time, there are many coun-

tries whose main interest lies in the price ofcrude oil. The stability OPEC is searchingfor definitely depends on a fair agreementthat recognises, on the one hand, the rightsof owners to obtain a just price for theirexhaustible and non-renewable resource.

On the other hand, the right exists forconsumers to be guaranteed crude oil sup-ply at a price that does not hurt the econo-mies of their countries. This will probablybe one of the main topics for discussion atthe 8th International Energy Forum, com-monly known as the producer-consumerdialogue, which will take place in Japanlater this year.

It is to be hoped that, after a longperiod of confrontation, we will arrive atan agreement that helps contribute to sta-ble energy markets and, hence, to worldeconomic stability.

‘OPEC’s priceband hasincreasinglyreceived moresupport fromthe world’sleadingindustrialisedcountries.’

during the time. The average price for theOPEC Basket of seven crudes in May lastyear, around the time of one price spike,was around $26/b.

In addition, the European Commis-sioner for Transport & Energy and ECVice-President, Loyola de Palacio, hasmade it very clear that the European Un-ion does not want low oil prices, but ratheris seeking stability in energy markets, which

8 OPEC Bulletin

B O A R D O F G O V E R N O R S

OPEC Board of Governors holdsits 105th Meeting in Vienna

The OPEC Board of Governors (BoG) held its 105th Meeting at the OPEC Secretariat in Vienna,Austria, on February 13–15, 2002. Some scenes from the Meeting are shown on these pages.

Left: The BoG’s Chairman, HE Suleiman JasirAl-Herbish (l) is seen here with OPEC SecretaryGeneral, HE Dr Alí Rodríguez Araque (r). Inthe background are (r-l): the Director of Re-search, Dr Adnan Shihab-Eldin; the Head ofEnergy Studies Department, Dr Rezki Lounnas;and the Head of the Secretary General’s Office,Karin Chacin.

Below: The Governors pose for a group photograph. Standing, l-r: HE Abdelhadi Benzaghou, Algeria; HE Abdulla H Salatt, Qatar; HE HosseinKazempour Ardebili, Iran; Dr Mussab H Al-Dujayli, Iraq; Dr Gloria Mirt Hernández, Venezuela; Dr Rachmat Sudibjo, Indonesia;Hammouda M El-Aswad, SP Libyan AJ; and Hamdan Al Akbari, ad hoc Governor for the United Arab Emirates. Seated, l-r: Ms SihamAbdulrazzak Razzouqi, Kuwait; HE Suleiman Jasir Al-Herbish, Saudi Arabia; HE Dr Alí Rodríguez Araque; and Ms Amal I Pepple, Nigeria.

February 2002 9

B O A R D O F G O V E R N O R S

Right: The Chairman of the Board, the Secre-tary General and the Governors in the middleof their deliberations.

Above: HE Hossein Kazempour Ardebili (c)makes a point to HE Abdelhadi Benzaghou (l)and Dr Rezki Lounnas (r).

Above: HE Abdulla H Salatt (r) in discussionswith Hammouda M El-Aswad (l) andDr Rachmat Sudibjo (c).

Above: Ms Siham Abdulrazzak Razzouqi(l) and Dr Gloria Mirt Hernández (r) inconversation.

N E W S L I N E

February 2002 11

N E W S L I N E

oha — Qatar’s Ras Laffan Liq-uefied Natural Gas Company

(RasGas) has reached anothermilestone, with the laying of the founda-tion stone for its third LNG train at RasLaffan last month.

The foundation stone for the newtrain, which will be the world’s largestwhen completed, was laid at a ceremonyby the son of the Emir of Qatar and Chair-man of the National Olympic Commit-tee, Sheikh Tamim Bin Hamad Al-Thani.

Set to boost RasGas’s onshore andoffshore gas production capabilities, thethird train will have a capacity of 4.7million tonnes/year of LNG, using gas fromthe North Field.

The third train, scheduled for an early2004 start-up, will enhance RasGas’s off-shore gas production capability to 2 bil-lion cubic feet/day from the existing 1.1bncu ft/d. Onshore production of gas willgo up to 11.3m t/y from the current levelof 6.6m t/y.

Incremental volumesThe new train, coupled with incre-

mental volumes from RasGas’s trains oneand two, will be supplied to Indian firmPetronet, which signed a landmark dealin 1999 with RasGas for 7.5m t/y of LNG

for a period of 25 years.A consortium made up of Chiyoda and

Mitsui of Japan, Snamprogetti of Italy, andQatar’s Almana, is setting up the onshorefacilities for the third train.

These facilities, comprising one well-head platform with seven wells and a pipe-line, will be provided by J Ray McDermottMiddle East (Indian Ocean).

The engineering, procurement, andconstruction contracts for the offshore andonshore facilities were signed in April lastyear.

Of the 7.5m t/y of LNG that RasGaswill supply to Petronet, 5.0m t/y will bedelivered to a planned receiving terminalat Dahej in the central Indian state ofGujarat, and another 2.5m t/y will beshipped to a terminal at Kochi, in Kerala.

The Gujarat terminal is currently

Landmark deal between Qatar’s RasGas andIndia’s Petronet moves ahead as foundation

stone is laid for world’s largest LNG trainunder construction, and initial deliveriesof LNG are scheduled to commence therein late 2003.

These first deliveries will come fromthe 1.5m t/y of excess capacity that willbe available from the first two trains, whichare currently producing LNG that is beingdelivered to South Korea’s Kogas.

Qatari Minister of Energy and Indus-try, Abdullah Bin Hamad Al Attiyah, saida fourth train with a matching capacitywould become imperative if RasGas wasto fulfill its commitment to Italy’s EdisonGas to supply it with 3.5m t/y of LNG.

“We are positioning Qatar as the worldleader in LNG. We can achieve this withadditional trains being set up by RasGasand QatarGas and their current produc-tion capabilities,” the Minister noted.

RasGas Chairman and Minister ofFinance, Economy & Trade, YousefHussein Kamal, said the development oftrain three would help RasGas take advan-tage of many synergies in both design andoperation and lower its capital and oper-ating costs, without compromising on itsoperating performance.

The project is being implemented byRasGas II, a Qatari joint venture formedby Qatar Petroleum and Mobil Gas Inc,an affiliate of US major ExxonMobil.

Currently, the two operational RasGastrains have a capacity of 3m t/y of LNG.Production from the facility began in2000, to supply South Korea’s Kogas withLNG at a rate of 4.9m t/y over a 25-yearperiod.

Iran officially marksstart of natural gasexports to TurkeyMaku, Iran — The start of natural gasexports from Iran to neighbouring Tur-key was officially marked last month in aceremony attended by the Oil and EnergyMinisters of the two countries, accordingto the Islamic Republic News Agency(IRNA).

Iranian Petroleum Minister, BijanNamdar Zangeneh, hailed the move, stat-ing that his country was “looking to Tur-key as a gateway for the export of Iraniannatural gas to European markets.”

The gas transfer was an importantconfidence-building measure for the twocountries and represented a new phase intheir regional co-operation, he was quotedby IRNA as saying.

The Managing Director of the Na-tional Iranian Gas Company, HamdollahMohammad-Nejad, said the flow of gashad started through a new pipeline at theBazargan border point. It had the capac-ity to transfer 40 million cubic metres/dayof natural gas.

He noted that Iran had spent $1.86billion on the scheme, and added that itsinauguration meant that his countrywould now meet 30 per cent of Turkey’sgas imports.

The Turkish Minister of Energy andNatural Resources, Zeki Cakan, pointedout that Iranian gas exports were the “bestand most inexpensive” option for thecountry, saying that some 60 cities andcommercial centres in Turkey were con-suming Iranian gas.

The delivery of Iran’s natural gas toTurkey via the 2,577-km pipeline beganlast month, after being delayed from itsoriginal start date of earlier in 2001 fortechnical reasons.

Under the agreement between the twocountries, Iranian gas exports to Turkeyare expected to rise to 4bn cu m by theend of 2002 and to about 10bn cu m in2007.

Nigeria calls for bidsto design, build andoperate private refineriesAbuja — As part of renewed efforts toensure healthy competition in the down-stream sector of the Nigerian oil industry,the government has announced that it isinviting bids for the licensing of privaterefineries.

The country’s Presidential Adviser onPetroleum and Energy, Dr RilwanuLukman, told newsmen and industryoperators in Abuja last month thatprospective investors would be granted

D

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12 OPEC Bulletin

their installed capacities, forcing Nigeriato import gasoline and other petroleumproducts to augment local supplies.

The government has slated the fourexisting refineries for privatization and,according to officials of the state-runBureau for Public Enterprises (BPE), thePort Harcourt plant may be sold as earlyas this year.

However, one of Nigeria’s oil unions,the Petroleum and Natural Gas SeniorStaff Association (Pengassan) has threat-ened to call a nationwide strike to protestagainst the planned privatization of therefineries.

Privatization timetablePengassan said in a statement released

in Lagos and signed by its President, ShinaLuwoye, that its members would embarkon a nationwide strike when the BPEpublished the privatization timetable.

The statement expressed regret that thegovernment did not deem it fit to respectPengassan’s position on the issue, stating:“We have made our position on the issueknown to the government, but they arestill bent on going ahead with their plans.”

The union said that while it was notopposed to the liberalization of the do-mestic oil sector, it called on the govern-ment to continue to play an active role inthe industry.

“While we believe in liberalization, wedon’t believe that the government shouldtotally divest its interest in the sector.Private refineries should be allowed to setup alongside government-controlled ones,if only for security and economic reasons,”it observed.

In response to Pengassan’s threatenedstrike, the Group Managing Director ofthe state-run Nigerian National PetroleumCorporation (NNPC), Jackson Gaius-Obaseki, urged the union to address itsgrievances through dialogue.

Gaius-Obaseki said such a strike wouldnot solve the problem, but would, on thecontrary, retard the development of thepetroleum sector.

“As the sector is struggling to get astrong foothold in the economy, a strikeat this point in time will undoubtedlyretard the move and shut down the na-tion,” he warned.

He advised the leadership of Pengassanto rescind the decision to go on strike and

explore ways of reaching an agreementwith the government in the interest of allconcerned.

Indonesia finally hikesdomestic fuel prices byaverage of 22 per centJakarta — The Indonesian governmenthas raised domestic fuel prices by an av-erage of 22 per cent from the middle ofJanuary, using a new formula pegged tothe world market.

The government had explained thatthe price hike was necessary to reduce thefuel subsidy’s burden on the state budgetand curb smuggling of fuel out of thecountry, according to newspaper reports.

The price of kerosene for householdsand small enterprises was raised to 600rupiahs/litre (5.77 cents) from 400rupiahs/lt, while for industry it was putup to 1,230 rupiahs/lt.

The premium gasoline price went upto 1,550 rupiahs/lt from 1,450 rupiahs/lt, while automotive diesel for transporta-tion and industry was priced at 1,150rupiahs/lt, up from 900 rupiahs/lt.

The new prices, except for householdkerosene, would only apply until the endof February, said government officials at apress conference in the capital Jakarta.

They stressed that the new price for-mula was needed to help ensure that thegovernment fuel subsidy helped the rightpeople, and to curb rampant smugglingof fuel oil out of the country.

The government had reduced its fuelsubsidy for 2002 to 30.50 trillion rupiahs,compared with 53.77tr rupiahs last year.It had also allocated 2.85tr rupiahs tocompensate poor people affected by thenew oil product prices.

To avoid any impact of the extremefluctuations in global oil prices, the gov-ernment had also set maximum and mini-mum prices, the reports noted.

The decision to hike the prices cameafter Indonesian President, MegawatiSoekarnoputri, gave the green light, whilealso acknowledging the move as a toughdecision.

The increase in fuel prices and elec-tricity rates were unpopular moves, butthey could not be cancelled either, said

approval in three stages, culminating inthe granting of a licence to operate theplant.

He said the first stage involved pre-qualification of submissions by prospec-tive investors and the selection of an ap-propriate number of credible applicationson payment of a fee of $50,000.

The second stage entailed approval toconstruct a given refinery, following sub-mission of a basic design package, afterwhich the licensee could go ahead withdetailed engineering, procurement andconstruction.

The third stage, said Lukman, involvedthe granting of a licence to operate theplant, on confirmation that it had beenbuilt in accordance with the approveddesign. Another fee of $100,000 wouldthen be paid.

“The overall objective of the procedureis to provide a basis for identifying andselecting applicants with bankable projectsto be issued a preliminary licence to es-tablish a refinery,” he said.

Prospective applicantsLukman explained that only applicants

who could confirm general feasibility ofthe proposed projects would be grantedlicences.

He added that a selection committeewould scrutinize prospective companies,in terms of background and expertise inrefining, as well as their financial where-withal.

Bidding applications would be enter-tained until March 7, 2002 and the entireexercise would last for a period of 10weeks, noted Lukman.

“The government’s encouragement ofthe private sector’s involvement in therefining of petroleum products throughthe opening up of the system will result ina reliable supply of petroleum productsand increase industry efficiency, whileensuring competitive pricing,” he said.

Lukman explained that the setting upof private refineries would encourage theparticipation of new entrants, therebypromoting a vibrant industry and provid-ing opportunities for technology transfer.

Nigeria has four operating refinerieswith a total installed capacity to process445,000 barrels/day. However, due to alack of maintenance and generally poorperformance, the plants operate below

N E W S L I N E

February 2002 13

In briefMegawati during a meeting with theChairman of the Muhammadiyah YouthOrganization, Imam Addaruqutni.

In a related development, FinanceMinister Boediono has tried to soften theblow of the fuel price rise by making allimported basic foods, including essentials,such as rice and corn, exempt from valueadded tax.

It was hoped that the decision wouldhelp maintain social stability and controlinflation, officials noted. They pointed outthat former President Soeharto was forcedto quit in part due to social unrest sparkedby protests against fuel price hikes.

Inflation rates surged even asMegawati’s predecessor, AbdurrahmanWahid tried to defer fuel price hikes twiceduring his presidency last year.

ADNOC mulls Ukrainianproposal for oil and gasterminal on Black SeaAbu Dhabi — The Abu Dhabi NationalOil Company (ADNOC) is to consider aproposal from Ukraine to set up a joint-venture oil and gas terminal at the BlackSea port of Odessa, according to the lat-ter’s Minister of Foreign Affairs, AnatolyZlenko.

Significantly, the United Arab Emir-ates (UAE) and Ukraine would shortlyconclude two agreements: an investmentpromotion accord, and a protocol to avoiddouble taxation, he added.

“A proposal has been submitted toADNOC for participation in the interna-tional consortium for an oil and gas ter-minal at Odessa for oil transportation towestern countries,” said Zlenko, whonoted that ADNOC had agreed to con-sider the joint venture.

A pipeline to transport Russian oil towestern Europe via Odessa and Brody(Poland), had just been initiated and ef-forts were now been made to make itoperational, the Minister observed.

He added that Ukraine was keen thatADNOC participated in the consortiumand it would be given preferential treat-ment. “Ukrainian companies are capableof high-quality construction at cheapcosts,” he pointed out.

Although the Minister also visited

Kuwait, Qatar and Oman on his recenttour, he stressed that such a proposal hadbeen made only to the UAE. However, co-operation in the oil and gas sectors hadbeen discussed with officials in the othercountries, he noted.

The UAE and Ukraine would finalizethe two agreements soon, he said, indi-cating that the accords were likely to besigned during the visit to the UAE of theUkrainian President in the second half ofthis year.

Meanwhile, the Abu Dhabi Chamberof Commerce and Industry has called onUkraine to co-operate with the Emiratein setting up joint ventures in petrochemi-cals, shipbuilding and agriculture.

The Chamber’s President, Saeed SaifBin Jabr Al Suwaidi, told the Ukrainiandelegation that Abu Dhabi would like toco-operate with his country in the petro-chemicals and shipbuilding sectors, whichwere well developed in the Ukraine.

Zlenko said his country was now at astage where economic growth was takingoff, following reforms introduced twoyears ago.

Gross domestic product growth hadincreased from six to nine per cent, whileindustrial growth had climbed to 16 percent from 12 per cent.

Top Libyan and Algerianenergy officials hold talkson boosting co-operationAlgiers — Algerian Energy and MinesMinister, Dr Chakib Khelil, met with theHead of Libya’s National Oil Corporation,Dr Abdulhafid Mahmoud Zlitni, in Al-giers last month to discuss bilateral energyco-operation between the two countries.

According to an Algerian EnergyMinistry statement, the discussions cen-tred on the evaluation of partnershipprojects being undertaken by the twosides, particularly in the areas of geophys-ics, and exploration and production ac-tivities.

Khelil and Zlitni also examined waysand means of reinforcing and developingAlgeria-Libyan economic relations, in theinterests of the two nations.

In this regard, they looked at partner-ship possibilities in other sectors, includ-

Mideast seen as key petrochems playerABU DHABI — The Middle East has a crucialrole to play in the development of the globalpetrochemical industry, as more and morecompanies will be driven to the region forlong-term investments, according to an in-dustry expert. Addressing an industry con-ference in Abu Dhabi, Andrew Pettman, aDirector of CMAI Europe, said that the hugecapacity growth in the Middle East forecastfor 2005-10 would mean that by 2010, theregion’s ethylene capacity would likely be atthe same level as in north-east Asia and west-ern Europe. Explaining the reasons for theslow growth in key markets such as Europe,north-east Asia, and at least for the next fiveyears, in North America, he said the key is-sue was the ageing of steam crackers in thedeveloped world. Investment was increasinglylimited by relatively high labour costs, envi-ronmental legislation, and other issues, henoted.

Austria’s OMV to boost investmentBRUSSELS — The Austrian oil and gas group,OMV, is to increase its spending by about$2.33 billion in 2002-04. The company saidthe increased level of investment would bespent on exploration, production and mar-keting. “We are reinforcing our strategy oforganic growth and have therefore increasedour capital expenditure,” OMV bossWolfgang Ruttenstorfer said in a statement.“Our aim is to double our market sharewithin the next five to seven years and thisincrease is a crucial step in this direction,” headded. The firm noted that 64 per cent ofthe capital expenditure would be invested ingrowth and expansion, while the remaining36 per cent would earmarked for rationaliza-tion, restructuring and maintenance projects.

Yemen starts output from new wellsSANA’A — Yemen has begun pumping crudeat a rate of 13,000 barrels/day from two oilwells in block 53, the Yemeni news agency,Sabaa, reported last month. The agencyquoted the Minister of Petroleum and Min-eral Resources, Rasheed Saleh Baraba’a, assaying that output could reach 25,000 b/dwithin the next few months. At a ceremonymarking the start of production in theHadhramout governorate, the Minister saidthat production from the Rodoud 1 and 2wells would help boost total output to about475,000 b/d. Block 53 had 61 million b ofproven crude oil reserves, while the country’stotal crude deposits were estimated at 4.6bnb, according to the report. Total gas reserveswere put at about 420bn cubic metres. Oilaccounts for about 35 per cent of Yemen’stotal revenue.

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In briefing the marketing and distribution ofpetroleum products.

To boost bilateral dealings, the twomen also agreed to hold regular meetingsbetween economic organizations and firmsfrom both countries.

Saudi Aramco tops PIWoil industry rankingsfor 13th straight yearDhahran — Saudi Aramco has beennamed the world’s number one oil com-pany for the thirteenth consecutive year,maintaining its position while a new in-dustry structure emerges, according to thenew annual ranking list from PetroleumIntelligence Weekly (PIW).

The PIW rankings, which place Ven-ezuela’s PDVSA second and ExxonMobilthird, are based on 2000 figures for oilreserves and production, gas reserves andoutput, refinery capacity, and productsales.

“We are proud of our achievements,which we owe to the effectiveness of ouremployees,” said Saudi Aramco Presidentand Chief Executive Officer, Abdullah SJum’ah, in a press statement.

“We recognize that our responsibili-ties extend beyond such accolades. Wehave responsibilities to the Kingdom, ourcustomers and our partners. We also havesocial and environmental responsibilities,”he noted.

“Increasing competition will encour-age us to remain at our best in all respectsand to maintain a high level of co-opera-tion with key players in the petroleumindustry.

“We also have initiatives that areamong the biggest in the world, whichinclude a business integration system thatwill help us increase our productivity andefficiency to maintain a position of respon-sible leadership,” he added.

In the rankings, Saudi Aramco main-tains an enormous advantage in crudereserves. The gas deposits held by thecompany placed it fourth on PIW’s rank-ing list.

Saudi Aramco also dominates in oiloutput, put at 8.6 million barrels/day in2000. Its gas production, at 4.6 billioncubic feet/day, ranks ninth on PIW’s top

50 list. The firm ranks seventh and sixthin refinery capacity and oil product sales,respectively.

While state-owned companies such asSaudi Aramco maintain their leadingpositions in the overall rankings, PIWnoted that “a whole new group of majoroil companies has taken shape in recentyears.”

All eleven OPEC Members feature inthe PIW top 50 rankings. Their overallplacings are as follows: Saudi Aramco (1),Venezuela’s PDVSA (2), National IranianOil Company (4), Indonesia’s Pertamina(10), Algeria’s Sonatrach (11), KuwaitPetroleum Corporation (13), the UAE’sAbu Dhabi National Oil Company (18),Iraq’s National Oil Co (19), the NigerianNational Petroleum Corporation (20),Libya’s National Oil Co (22) and QatarPetroleum (23).

Algeria to export 85bncubic metres of gasannually by year 2005Algiers — Algeria will boost its gas ex-ports to 85 billion cubic metres/year by2005, compared with 62bn cu m last year,according to Energy and Mines Minister,Dr Chakib Khelil.

Addressing the bi-annual symposiumof the Algerian Gas Industry Association,he noted that such an objective would bereached, thanks to the development of newgas fields.

The finds would enable the country’sgas production to rise to 150bn cu m/y,up from the 130bn cu m/y producedcurrently.

This would be possible, said Khelil,thanks to efforts undertaken by the gov-ernment in committing funds for costlyinvestment, and moving towards the lib-eralization of the domestic energy market.

However, he pointed out that thecountry’s gas initiatives were at risk ofbeing impaired by the new European GasDirective, on which gas-producing coun-tries had not been consulted.

Khelil stressed that the unilateral im-plementation of this Directive riskedweakening gas contracts and could have anegative influence on investment in thesector.

India’s crude oil production fallsNEW DELHI — India’s crude oil productionhas showed a decline, with output from thecountry’s main Mumbai High offshore fieldsfalling by 1.1 per cent to 2.78 million tonnesin December last year. This compared with2.81m t produced in December 2000, said areport carried by the Press Trust of India.According to the latest figures released byIndia’s Petroleum Ministry, crude oil produc-tion was 1.9 per cent lower at 24.05m t dur-ing the first nine months of the current fiscalyear (April-December 2001), compared with24.47m t in the corresponding period in2000. However, refinery throughput was 8.8per cent higher at 9.52m t in December 2001,as against 8.75m t in the same month theprevious year. For the whole nine-month pe-riod, refinery output increased by 4.2 per centto 80.18m t, compared with 76.91m t in thecorresponding period the previous year.

UK oil output expected to recoverLONDON — United Kingdom oil productionis expected to recover in the coming monthsas new technology takes effect, reversing thecurrent falls in output, according to a surveypublished last month by the Royal Bank ofScotland. The Edinburgh-based bank’smonthly oil and gas index said UK oil out-put in November last year showed a smalldrop, and was 6.9 per cent lower than inNovember 2000. The fall in production com-bined with the decline in oil prices over thelast year to reduce oil revenues by 46.9 percent, compared with the year before. How-ever, the country’s gas output experienced aseasonal surge, increasing by 34.1 per cent inNovember from October. Gas productionwas 2.8 per cent higher than in November2000. The bank also noted that the value ofBritain’s North Sea oil production in Novem-ber averaged $45.45 million per day.

TotalFinaElf, Yukos sign Shatsky dealPARIS — French oil giant TotalFinaElf an-nounced last month that it had signed anagreement with Russia’s Yukos to develop theShatsky zone in the Black Sea. The two com-panies, set to have equal shares in the ven-ture, would begin additional seismic work onthe area in the coming months, a statementsaid. The Shatsky zone is located in Russianwaters and has water depths of 1,500–2,000metres. The agreement must be approved bythe federal Russian authorities before it canbe implemented. TotalFinaElf already holdsa small interest in the Timan Pechora region,where it produces 12,000 barrels/day fromthe Khariaga field. Under a production-shar-ing accord, it should be able to increase out-put to 30,000 b/d by the end of the year.

N E W S L I N E

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In briefIn a separate development, it was re-

ported last month that Algeria’s hydrocar-bons export receipts stood at about$18.5bn last year, down from the $21.2bnregistered in 2000.

According to Energy and Mines Min-istry sources, the fall in hydrocarbonsreceipts began in the third quarter of 2001,following a downturn in prices on inter-national markets.

The decline in earnings was also aconsequence of cuts in Algeria’s oil pro-duction, as part of the measures by OPECto help stabilize the market.

However, the sources noted that lastyear’s results were still viewed as satisfac-tory, compared with the 1990s, whenexport earnings roughly averaged $10bnper year.

The sources also stressed that the rela-tive firmness of last year’s hydrocarbonsrevenue was boosted by the level of gasprices in the second half of 2001. Crudeoil prices in the first half of the year werearound $27/barrel, they added.

France’s TotalFinaElfannounces completion ofVenezuelan Sincor unitParis — French oil major TotalFinaElfhas announced the completion of projectfacilities to launch Venezuela’s Sincorproject, designed to produce heavy crudeoil from the Orinoco belt.

The French firm said in a statementthat the project, which also includedPetroleos de Venezuela (PDVSA) andNorway’s Statoil as partners, would aimto produce 200,000 barrels/day of extra-heavy 8° API crude at peak output.

The crude would later be upgraded toproduce 180,000 b/d of high-quality oilat the Jose facility on the Caribbean coast,the statement noted.

Since initial production commencedin January, 15 million barrels of crude haveso far been treated and blended withlighter crude to obtain 16° API oil suit-able for export.

Greater volumes would be handledwhen additional upgrading facilities wereoperational at the Jose terminal nextmonth.

The project required $4.2 billion in

investment by the consortium, in whichTotalFinaElf had a 47 per cent interest,PDVSA 38 per cent, and Statoil 15 percent, the statement added.

More international firmsinterested in Kuwait’snorthern oil fieldsKuwait — The Kuwait Petroleum Cor-poration (KPC) announced last monththat more international oil companies hadshown an interest in participating in thedevelopment of the country’s northern oilfields.

A KPC statement said the protocolssigned with some companies that were toparticipate in the scheme allowed consid-eration of additional applications.

The Corporation would, therefore, fora limited period, receive additional andfinal non-operator applications by com-panies that had not previously expressedtheir interest, it said.

KPC’s Vice-Chairman, Nader Al-Sul-tan, said the Corporation was pleased withthe great interest in the northern oil fieldsproject and the positive response by inter-national companies.

“The new applications indicate in-creasing international interest in theproject, which is initiating a new phase,”he noted.

The Corporation said, however, thatno further applications would be acceptedafter February 17 this year, which was theofficial closing date.

Nigeria raises pricesof gasoline and otherpetroleum productsAbuja — Nigeria has implemented anincrease in the price of domestic gasoline,from 22 naira per litre to 26 naira/lt, itwas officially announced last month.

The Chairman of the petroleum prod-ucts pricing regulatory committee, ChiefRasheed Gbadamosi, said diesel would alsosell at a new price of 26 naira/lt, insteadof 21 naira/lt, while kerosene would retailat 24 naira/lt, instead of 17 naira/lt.

He told a news conference in Abuja

Unocal finds gas reservoir in AlaskaNEW YORK — The Unocal Corporation hasannounced the discovery of a natural gas res-ervoir on Alaska’s Kenai Peninsula. TheGrassim Oskolkoff 1 well, the first explora-tion well drilled under a joint operating agree-ment between Unocal and Marathon Oil inthe Ninilchik exploration area, indicates sig-nificant natural gas accumulations. A 39-ftinterval in the Miocene formation yieldedrestricted flow rates of up to 11.2 millioncubic feet/day of gas. The zone tested was at9,822 ft, and the well was drilled to a totaldepth of 11,600 ft. Several significant un-tested intervals exist elsewhere in the well.Exploration efforts also continue at severalother wells in the unit. Unocal holds a 40 percent working interest in the well and the25,000-acre Ninilchik area. Marathon is op-erator and holds the remaining interest.

Malaysian gas investment to hit $7bnKUALA LUMPUR — Gas producers in Malay-sia are expected to invest as much as $7.1 bil-lion over the next three years to meetincreasing energy demand, local newspaperThe Star reported last month. Investmentswere being considered both for the upstreamand downstream sectors to fully exploit Ma-laysia’s 82.5 trillion cubic feet of reserves,which would last for the next 30 to 40 years,the paper quoted Vice-President of GasBusiness at state oil firm Petronas, MuriMuhammad, as saying. Muri pointed out thatthe industry had invested $22.43bn on gasprojects, including petrochemical plants,which were using natural gas as a feedstock.The power-generating sector was the mainconsumer of natural gas, taking 71 per centof the 1.93bn cu ft/day of gas produced lastyear, said Muri.

Ecuador prepares for oil bidding roundQUITO — Ecuador is preparing to call thecountry’s ninth international oil biddinground, with emphasis on exploration offshorein the country’s search for new hydrocarbondeposits. The state oil company,PetroEcuador, has defined eight blocks in thelatest bidding, four offshore with blocks 4, 5,39 and 40, with another four in the Amazonregion, comprising blocks 20, 32, 33 and 35.The firm is currently analyzing the possibil-ity of including three more oil blocks in theAmazon region. Before the bidding,PetroEcuador identified 13 structures withprobable reserves capable of supporting pro-duction of 350 million barrels of heavy crude.At present, the company is preparing the tech-nical documents for the bidding, such as geo-logical maps of the blocks, socio-economicstudies, and legal work.

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In briefthat the new prices would be applicableimmediately and for the first quarter ofthis year. The increases were part of theliberalization of the downstream sector ofthe Nigerian petroleum industry.

“In arriving at these prices, not allinterests of the marketers, transporters, theNigerian National Petroleum Corporation(NNPC), or even the government, werecompletely accommodated, as they weredisallowed any increases in their margins,”he said.

Gbadamosi said that only bridging andtransport costs were allowed upward re-views, in response to the need to reducedifficulties in transportation.

The government had accepted a moveto abolish the existing three naira con-sumption tax, while import duties to coveradministrative costs would be levied at1.50 naira/lt.

Gbadamosi pointed out that the newprices were not cast in iron, but could beseen as ceilings for each of the productcategories. He added that the committeeexpected that the forces of competitionmight push some prices down.

He said the liberalization policy wasaimed at assisting Nigerians who hadsuffered because of the shortages of petro-leum products and other problems in thepast.

Gbadamosi noted that the monopolycurrently being enjoyed by the NNPCwould endure, with all the imperfectionsof the system, unless an enabling environ-ment was created to encourage participa-tion by other operators.

He said the committee intended tomeet on a quarterly basis to review mar-ket fundamentals, in accordance with itsmandate and arrive at appropriate pricesfor the following quarter.

Gbadamosi said the nation stood togain from a deregulated downstream sec-tor as there would be the renewal andexpansion of product reception and stor-age facilities and the construction of newdepots by marketers.

He explained that the enabling envi-ronment created would result in the im-port of petroleum products by several li-censed players and this would lead to sta-bility in product supply.

It would also provide opportunities forviable cross-border trade and foreign ex-change earnings for Nigerian companies

who would be able to export to neighbour-ing countries.

“It will promote investments, leadingto a vibrant industry, thereby creating newjobs,” Gbadamosi stressed.

Qatari Emir inauguratesexpanded crude oilrefinery at MesaieedDoha — The Emir of Qatar, SheikhHamad Bin Khalifa Al Thani, has inau-gurated Qatar Petroleum’s $850 millionexpanded refinery at Mesaieed.

The scheme has significantly boostedthe state’s oil refining capacity and hasfacilitated the processing of crude oil andcondensates from gas production facilities.

The state-of-the-art refinery has morethan doubled Qatar’s refining capacity to137,000 barrels/day. It will also meet lo-cal and foreign demand for finished pe-troleum products for a minimum of 15–20 years.

A fluid catalytic cracking unit at thenew refinery uses the technology to con-vert residue from the crude unit and con-densate refinery into premium products.The two-grade motor gasoline being pro-duced by the refinery is totally lead-free.

The project was formally launched bythe country’s Minister of Energy and In-dustry, Abdullah Bin Hamad Al Attiyah,in July 1998. Qatari Heir Apparent,Sheikh Jassem Bin Hamad Al-Thani, laidthe foundation stone for the expansion inFebruary 1999.

The expanded refinery’s commercialproduction began in July last year, somesix months ahead of the original sched-ule. The first shipment of surplus prod-ucts from the new refinery was made on22 July 2001.

The new expansion also involves sev-eral other units, services and facilities.They include a new condensate refinerycapable of processing 57,000 b/d of localcondensate to produce finished petroleumproducts, debottlenecking of the existingrefinery to process an additional 20,000b/d of crude oil.

In addition, the instrumentation andcontrol system has been upgraded andmodernized. The project’s contractors wereSouth Korea’s LG and Germany’s Lurgi.

UK oil discovery biggest since 1988LONDON — Estimates of the yield of a UnitedKingdom North Sea oil field have been re-vised upwards, making it the biggest discov-ery of oil in the area for more than a decade,was announced last month. PanCanadianEnergy had calculated that it could recoverup to 300 million barrels of oil from the Buz-zard field, located 96 km north-east of Aber-deen, Scotland. The field was first drilled lastsummer, but subsequently PanCanadian’sLondon-based unit said further test drillinghad shown that the oil reservoir was largerthan previously thought, and could yield400m b. The announcement was welcomedby Britain’s Energy Secretary, Brian Wilson.“This is a prime example of why we are work-ing so hard with industry to get offshoreblocks in the hands of the right operators.This is the biggest North Sea discovery sincethe Nelson field in 1988 and confirms thatthere are still huge prizes to be won,” Wilsonsaid.

Poll sees lower oil prices this yearBRUSSELS — Respondents to a survey byReuters are forecasting that oil prices will dropby 20 per cent to below $20/barrel duringthe course of this year, as a result of poor de-mand and worries about the strength of aneconomic upswing. The Reuters poll forecastsa fall in the price of North Sea Brent crudefrom nearly $25/barrel in 2001 to $19.46/bin 2002. The survey also projects global oildemand growth of 510,000 b/d, building ona 100,000 b/d rise in 2001, but still well be-low average growth over the past decade,which has been in excess of 1m b/d. Of thesurvey respondents, Merrill Lynch expectsdemand to be affected by the “worst globaleconomic conditions in 20 years.” The com-pany forecasts an oil price of $15.50/b forthe first quarter of the year.

Bush seeks support for energy policyNEW YORK — United States President,George W Bush, last month addressed a meet-ing of union presidents at the InternationalBrotherhood of Teamsters headquarters, torally support for his controversial nationalenergy policy, which includes petroleum ex-ploration in the Arctic National Wildlife Ref-uge (ANWR). “This energy bill is a jobs bill.When we explore (for oil) in the ANWR,we’re not only becoming less dependent onforeign sources of crude oil, we’re creating jobsfor American workers,” said the President,who was accompanied by other top Admin-istration officials including Energy Secretary,Spencer Abraham. According to estimates bythe US Geological Survey, the ANWR couldcontain as much as 16 billion barrels of oil.

N E W S L I N E

February 2002 17

In briefA substantial sum of the investment

was made to solve pollution problems, saidQatar Petroleum in a statement. Effluentsfrom the refinery were being treated toeliminate hazardous components beforedisposal to air, sea or land.

For the first time in the Middle East,an RFCC gas scrubber was installed at therefinery to preserve and protect the envi-ronment.

Speaking at the inauguration cer-emony, Al Attiyah said the expanded re-finery would help meet the burgeoningdemand for petroleum products in thecountry.

In line with stringent internationalenvironmental regulations, the new refin-ery had been designed to produce high-quality products that met internationallyaccepted quality standards, said the Min-ister.

It had adopted technologies that notonly protected the environment, but alsooptimized production and yielded at alevel which matched the best in the world.

Iran mulls increasingimports of natural gasfrom TurkmenistanAshkhabad — The President ofTurkmenistan, Saparmurat Niyazov, saidlast month that that Iran wants to increaseits purchases of Turkmen gas to about eightbillion cubic metres this year.

Under the terms of a 25-year contractsigned by the two countries for the tradeof gas, Turkmenistan currently exportsabout 5bn–6bn cu m/year to Iran.

About 3.5bn cu m of Turkmen gas wasexported to Iran in the first 10 months of2001, according to local media reports.

Niyazov pointed out that theKorpeche-Kordkouy gas pipeline had thecapacity to transfer up to 12bn cu m/y ofgas.

The 195-km Turkmenistan-Iran gaspipeline, which was inaugurated at a cer-emony attended by the Iranian andTurkmen Presidents, was the first projectthat Turkmenistan implemented after at-taining independence, he noted.

Niyazov said his country also plannedto export 40bn cu m of gas to Ukraineand 10bn cu m to Russia through its tra-

ditional gas pipelines, according to a re-port by the Islamic Republic News Agency(IRNA).

He said the country formerly had thecapacity for transferring 100bn cu m/y ofgas, but the figure had now dropped toabout 75bn cu m/y.

The Turkmen President added thattalks were under way for the transfer ofnatural gas to Turkey and Armenia, viaIranian territory, reported IRNA.

Chinese firm set to belargest offshore oilproducer in IndonesiaJakarta — The China National Off-shore Oil Corporation (CNOOC) is setto become the largest offshore oil producerin Indonesia, following the $585 millionpurchase of concessions held by Repsol-YPF of Spain, it was reported last month.

The deal, which is the biggest singleinvestment by CNOOC, has left severalinternational oil companies, includingIndonesian state oil and gas firmPertamina, flat-footed.

The acquisition would add 360 mil-lion barrels of oil equivalent to CNOOC’sproved net working interest reserves and15m–20m boe to its annual output, ac-cording to the Chinese firm’s Chairman,Wei Liucheng.

The fields, with production of 70,300barrels/day, would increase CNOOC’sdaily production by 17 per cent to356,000 boe/d this year.

The acquisition of the operations heldby Repsol-YPF’s nine Indonesian subsidi-aries would be finalized by September 30,2002.

The move was expected to generateearnings and cash flow for this year, butCNOOC officials have declined to projectwhat earnings would be.

CNOOC, listed in New York andHong Kong, has been on an aggressiveacquisition trail and aims to have 15 percent annual output growth in the nearfuture.

It had 95m boe output in 2001 andhas raised the target to 125m–130m boefor this year. Meanwhile, Repsol-YPF saidit would keep its 2,200 b/d Jambi Merangconcession in Indonesia.

ASEAN to sign gas pipeline pactKUALA LUMPUR — An agreement covering theconstruction of a trans-ASEAN gas pipelineis expected to be signed in July by the mem-bers of the Association of South-East AsianNations. The project, which will link gas sup-ply centres to demand within the region, isestimated to cost $6 billion. When in place,the gas pipeline network will harness the re-gion’s rich reserves and reduce dependence onimported oil. An official from Malaysia’s stateoil company Petronas said that ASEAN mem-bers would sign the accord when their En-ergy Ministers met on Indonesia’s island resortof Bali. “A special task force has been set upto make sure everything is ready to sign amemorandum of understanding when theASEAN Ministers of Energy meeting con-venes in July,” the official said.

US petroleum demand fell in 2001NEW YORK — For the first time in a decade,overall consumer petroleum product demandin the United States in 2001 declined bynearly one per cent, with 19.59 million bar-rels/day consumed, as measured by industrydeliveries, the American Petroleum Institute(API) has reported. Demand for most oilproducts weakened during the year, exceptgasoline, which showed a 1.4 per cent riseover 2000 figures. Among the causes of theoverall annual decline were sharply reducedair travel in the aftermath of the September11 attacks, the continued lacklustre economy,industrial fuel switching from residual fueloil to cheaper natural gas, weak demand forpetrochemical feedstock, and abnormallywarm winter temperatures. The API alsonoted that the domestic use of imported crudeoil and refined products last year reached arecord high of 11.6m b/d, which was 1.2 percent higher than in 2000.

PetroEcuador’s crude oil output downQUITO — Crude oil production by Ecuador’sstate-owned oil company, PetroEcuador, fellby 6.2 per cent during the first 10 months oflast year, according to government sources inthe capital Quito. However, they noted thatthe country’s total crude output in the pe-riod registered an increment of 2.3 per cent,due to the contribution from private oil firms,who compensated for the PetroEcuador de-cline. The government had estimated thatPetroEcuador would produce 97m barrelsduring 2001, but actual output was only ex-pected to have reached 94.4m b. The gov-ernment had intended selling 94m b ofPetroEcuador’s crude oil production, but upuntil last November, only 43.9m b had beenexported. With the shipments for December,sales were estimated to reach 47.5m b.

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18 OPEC Bulletin

In briefCommenting on the deal, Pertamina

President Baihaki Hakim told the Indo-nesian House of Legislators that althoughhis company had missed out on theRepsol-YPF acquisition, there were manyother such opportunities.

Pertamina has also been directed by thegovernment to build its assets throughacquisition as it becomes an independentoil company in about two years’ time.

New UAE gas projectto be launched later in2002, says ADNOCAbu Dhabi — A new gas project to tieup the Abu Dhabi offshore and onshorefacilities is slated to commence this year,it was announced last month.

“This is embodied in a project that willexport gas from the Umm Shaif supercomplex (offshore) to the Habshan gas hub(onshore). The pipeline is expected to carrysome 500 million cubic feet/day of gas andwill commence in 2002,” the Abu DhabiNational Oil Corporation (ADNOC) saidin a report.

Last May, ADNOC (through its sub-sidiary Gasco) completed the Abu Dhabi-Jebel Ali gas pipeline, which is currentlysupplying 500m cu ft/d of natural gas toDubai.

The ongoing offshore Zakum Crestalgas-injection project, which would en-hance oil recovery, was expected to becompleted by the first quarter of 2004, thecompany noted.

It said the Umm Shaif Crestal gas-injection project for installing facilities andwells for auto-injection of 600m cu ft/dof Umm Shaif Khuff gas into the Arab Dand C reservoirs to increase oil output, wasexpected to be completed by 2006.

The company, in the report highlight-ing three decades of achievement, added:“One of its major successes in the last fewyears was the substantial increase in its oilproduction capacity by Zadco in theUpper Zakum field.”

The country’s onshore gas develop-ment projects currently under implemen-tation include onshore gas developmentphase three, expected to be completed inearly 2007.

This comprises the expansion of the

Bab Thamama F gas and gas re-injectionfacilities for recycling gas to the ThamamaF reservoir. The other onshore project,Asab gas development phase two, is dueto be completed in early 2007.

Algeria’s Sonatrachbrings new HBN oilfield into productionAlgiers — The Algerian state oil and gascompany Sonatrach has brought into pro-duction the Hassi Berkine North (HBN)oil field, which is located in the south-eastof the country.

According to government sources, theHBN field, which was jointly developedby Sonatrach, Italy’s Agip, Maersk ofDenmark, and Anadarko of the UnitedStates, would produce at 75,000 barrels/day in its first phase.

Output from the field, added to pro-duction from concessions in adjacentblocks scheduled to come on stream in2002 and next year, should increase thecountry’s oil production capacity by285,000 b/d.

Algeria’s oil production capacity atpresent stands at around one million b/dand is expected to rise to about 1.5mb/d by 2005.

In another development last month,Sonatrach, Agip and BHP of Australiaawarded a $257m contract to the Italian-French joint venture of Saipem/Bouygues.

The deal covers the development of theRhourde Oued Djemaa oil field and fiveother adjacent fields jointly exploited bySonatrach, Agip and BHP in the Berkinebasin.

The project involves the provision ofvarious installations, including a centraltreatment unit, a gathering network, andoil storage tanks.

The scheme, which requires additionalinvestment of $190m for the drilling of20 producing wells, is scheduled to bebrought into production in 2004. The sixfields have recoverable reserves estimatedat 300m b.

Saipem/Bouygues won the contract ina tender in which three other companiestook part: the Swiss-Swedish firm ABBLummus, Italy’s Snamprogetti, and theJVC corporation of Japan.

South Korea sees fall in energy costsSEOUL — South Korea’s total energy costs forlast year, including those of petroleum, coaland liquefied natural gas, amounted to $31.9billion, down by 5.5 per cent from 2000, ac-cording to the country’s Commerce, Indus-try and Energy Ministry. It said the projecteddrop was due to the fall in the price of Dubaicrude to $19-21/barrel during the year, com-pared with the $23/b average seen in 2000.The country’s crude oil import bill was ex-pected to drop by 6.7 per cent year-on-yearto $19.9bn, said the Ministry. Petroleum costsfell by 15.2 per cent to $25.2bn last year from2000 levels. The Ministry pointed out thatdomestic electricity consumption was ex-panding, having increased by 6.8 per centfrom a year ago to 217.58m kilowatt hoursin November 2001.

NYMEX energy trading hits recordNEW YORK — Options trading in 2001 setan annual volume record for the fifth con-secutive year on the New York Mercantile Ex-change (NYMEX), it was announced lastmonth. Annual volume records were set innatural gas options, unleaded gasoline futures,and options and trading on NYMEX Access7, the Exchange’s Internet-based electronictrading system. Exchange-wide volume forthe year was 103,025,093 contracts, the thirdtime in as many years that it has topped the100m mark. NYMEX options volume to-talled 15,475,878 contracts, surpassing theprevious record of 15,260,056 contractstraded in 2000. Natural gas options tradingset a record for the tenth consecutive yearsince the contract was launched in 1992, with5,974,240 contracts, surpassing the 5,335,800deals traded in 2000.

EU examines GCC single market planBRUSSELS — The European Union (EU) isclosely examining the move by Gulf Co-op-eration Council (GCC) member countries totear down their internal customs barriers andjoin each other in a single market. Accordingto industry analysts, the move would givebirth to the biggest oil bloc in history as theGCC countries controlled just over half theworld’s extractable crude oil wealth. The mar-ket was to become a reality at the start of2003, two years ahead of the original sched-ule, they noted. The EU has long used theabsence of a single GCC market to maintainpetrochemical and other tariffs, seen as un-fair by the GCC, in order to protect the high-cost European producers. However, with thecreation of a single GCC market, analystshave said that the pressure would be on theEU to lift those barriers, but the GCC stillneeded to further relax its investment rules.

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Table A: Monthly average spot quotations of OPEC Reference Basket and selectedcrudes including differentials $/b

Year-to-date averageDecember 01 January 02 2001 2002

Reference Basket 17.53 18.33 24.06 18.33Arabian Light 17.99 18.83 22.31 18.83Dubai 17.60 18.54 22.56 18.54Bonny Light 18.78 19.65 25.43 19.65Saharan Blend 19.08 19.64 26.08 19.64Minas 17.64 18.88 24.03 18.88Tia Juana Light 14.89 15.37 23.18 15.37Isthmus 16.73 17.42 24.80 17.42

Other crudesBrent 18.58 19.48 25.60 19.48WTI 19.40 19.71 29.42 19.71

DifferentialsWTI/Brent 0.82 0.23 3.82 0.23Brent/Dubai 0.98 0.94 3.04 0.94

M A R K E T R E V I E W

Crude oil price movements

After four consecutive months of pro-nounced declines, from September–December last year, the monthly price ofOPEC’s Reference Basket2 bounced backup in January. It gained 80 cents per barrel,or 4.6 per cent, with respect to the previousmonth; however, on a year-on-year basis,it fell by an astonishing 24 per cent. Ona weekly basis, the Basket started the monthwell, rising by 49¢/b to $18.50/b; it firmedeven further during the second week,gaining another 80¢/b to finish at$19.30/b. It deteriorated considerably inthe third week, losing $1.49/b, or almosteight per cent. For the fourth week, thedecline reached another low, at $17.69/b.However, the Basket recovered towardsthe end of the month, gaining 71¢/b toaverage $18.40/b.

On a disaggregate basis, all the Bas-ket’s components posted gains, with Mi-nas and Dubai leading the rise, with$1.24/b and 94¢/b, respectively. BonnyLight and Arabian Light followed closely,rising by 87¢/b and 84¢/b, respectively.Isthmus and the Bonny-related crude,Saharan Blend, firmed by 69¢/b and56¢/b during the month. Finally, TiaJuana Light posted the smallest gain,finishing 48¢/b higher at $15.37/b (seeTable A).

January started with a strengtheningof crude oil prices, underpinned by coldweather in Europe and the USA, as wellas the coming-into-effect of the OPEC/non-OPEC output/export cut. In the USmarket, the benchmark crude West TexasIntermediate (WTI) firmed, following areduction in imports amid a narrow WTI/Brent spread that virtually closed allarbitrage opportunities. Meanwhile, theAmerican Petroleum Institute (API) andthe Department of Energy’s Energy Infor-mation Administration (EIA), in theirweekly stock reports, showed considerablerises in distillate inventories. Weak gasprices undermined demand for distillateson the US East Coast, putting some pres-sure on crude prices. Several factors com-bined, during the second week, to triggera fall in crude prices.

The pronounced price decrease beganwith market scepticism over Russia’s com-pliance with the pledged 150,000 b/dexport cut and remarks by the Chairmanof the Federal Reserve Board, AlanGreenspan, that the US economy faced‘significant’ near-term risks. Adding to thebearish market sentiment was the releaseof the API’s weekly figures. They showedcrude and gasoline stocks rising consider-ably, while distillate inventories, whichinclude heating oil, fell by much less thananticipated. Heavy fund-selling ahead of

January1

1. This section is based on the OPEC MonthlyOil Market Report prepared by the ResearchDivision of the Secretariat — published inmid-month and containing up-to-date analy-sis, additional information, graphs andtables. Researchers and other readers maydownload the publication in PDF formatfrom our Web site (www.opec.org), providedOPEC is credited as source for any usage.

2. An average of Saharan Blend, Minas, BonnyLight, Arabian Light, Dubai, Tia JuanaLight and Isthmus.

the long holiday weekend (Martin LutherKing Day) and the expiration of the Feb-ruary WTI contract on January 22 pushedprices lower. Meanwhile, weak refiners’margins prompted refinery run-cuts, un-dermining demand, and, on the supplyside, it was still too early to assess OPEC’sand non-OPEC’s compliance with theagreed cuts.

Even though crude prices weakenedslightly, the price slide came to a haltduring the third week of January. Pricesdrew support from the strength of productprices, amid reduced crude runs, as aconsequence of poor refiners’ margins.The news that 22m b of crude would beadded to the Strategic Petroleum Reserve(SPR) also contributed to the price con-solidation. During the week, commentsby the Iranian Petroleum Minister, BijanNamdar Zangeneh, expressing dissatisfac-tion with the present oil price level, firmedprices. During the last week of the month,the upward price trend, that had startedearlier, was consolidated. Price supportmaterialized at the beginning of the week,on news of good OPEC-10 compliancewith the output levels agreed in Decemberin Cairo.

A further recovery arose from concernover a possible oil workers’ strike at five USrefineries, involving 30,000 employees.Prices made further gains in ACCESS

20 OPEC Bulletin

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markets late on January 31, on news of ahuge explosion in an oil gathering facilityin northern Kuwait. Nevertheless, on thebearish side, the release of the weekly APIreport exerted pressure on oil markets.The report showed a big rise in gasolinestocks and a small draw on distillates.Crude stocks were slightly higher; how-ever, the rise was considerably smaller thanthe consensus expectation.

US and European marketsCold weather in the USA and Europe

and the coming-into-effect of the near-2.0m b/d OPEC/non-OPEC cuts sawbenchmarks WTI and Brent climb duringthe first week of January. An unusualpremium for Brent to WTI arose, in con-junction with the largest-ever trade of anexchange of futures for physicals in theBrent market, involving some 30m b. Theuncommon WTI discount to dated Brentreversed the normal east/west transatlanticarbitrage for West African and North Seagrades.

Crude imports into the USA fell by600,000 b/d during the second week, butthen rose in the third week, only to fallagain by 1.16m b/d in the last week.Meanwhile, falling product demand andweakening refiners’ margins saw refineryutilization rates and crude runs declineconsiderably throughout the month. Crudeand gasoline stocks rose week after week.The continued absence of Iraqi Basrah,hampered by the UN imposition of ret-roactive pricing, kept sour grades strongin the US markets. Turning briefly to theEuropean market, as stated above, thestrength of Brent and other grades erodedrefiners’ margins, forcing refiners to re-duce runs. Product stocks in Europedropped, but a consistent lack of demandleft the market indifferent to the low stockscenario.

Far Eastern marketsMarket sentiment was firm at the

beginning of the month, especially fordistillate-rich grades, amid healthy de-mand. Support for other regional sweetgrades was steady, in the absence of aninflux of West African competing crudes.However, overall demand in Asia weak-ened after the February allocation periodhad come to an end and weak refiners’margins forced refiners to reduce runs.

Product markets andrefinery operations

Oil product markets posted gains in theAtlantic basin in January, with a hefty risein gasoline prices, amid refinery run cutsand intensive maintenance. Singapore’sproduct market fundamentals were ham-pered by slackening regional demand.Refinery run-cuts were widespread, causedby prevailing weak margins (see Table B).

US Gulf marketLight product prices rose in January,

with a pronounced surge of $1.28/b in thegasoline price, followed by a moderateincrease of 41¢/b for gasoil. Althoughgasoline usually registers its lowest yearly

Table C: Refinery operations in selected OECD countries

Refinery throughput (m b/d) Refinery utilization (%)1

Nov 01 Dec 01 Jan 02 Nov 01 Dec 01 Jan 02

USA 15.10 15.03 14.67 91.3 90.9 88.5France 1.79R 1.74 1.64 94.8R 92.0 86.3Germany 2.26 2.21R 2.17 100.1R 98.0R 95.9Italy 1.81R 1.82R 1.74 76.7R 77.4R 76.4UK 1.66R 1.67 1.62 93.8 R 94.4 91.1Eur-162 12.31R 12.22R 12.00 90.2R 89.6R 87.9Japan 4.15 4.22 na 83.7 85.1 na

1. Refinery capacities used are in barrels per calendar day. na Not available.2. European Union plus Norway. R Revised since last issue.Sources: OPEC Statistics, Argus, Euroilstock Inventory Report/IEA.

Meanwhile, Middle East crudes drewsupport from the cuts implemented toterm supply contracts for February deliv-ery. Saudi Arabia deepened its cuts ofFebruary term allocations to Japan andSouth Korea by an additional four percent, bringing the total reduction to around24 per cent below the contractual vol-umes. Qatar and the UAE also imple-mented cuts in term supplies. Sentimentfor Middle East grades deteriorated laterin the month, as the return of Iraqi Basrahsupplies to the region compensated forthe cuts made by other major regionalproducers. Brent’s uncommon narrowpremium to regional similar grades openedthe arbitrage window to West Africancrudes, putting additional pressure on localcrudes.

Table B: Selected refined product prices $/b

Change Nov 01 Dec 01 Jan 02 Jan/Dec

US GulfRegular gasoline (unleaded) 20.99 21.35 22.63 +1.28Gasoil (0.2%S) 22.13 21.02 21.43 +0.41Fuel oil (3.0%S) 13.62 14.68 14.77 +0.09

RotterdamPremium gasoline (unleaded) 20.20 19.16 20.65 +1.49Gasoil (0.2%S) 23.03 21.35 21.72 +0.37Fuel oil (3.5%S) 14.67 14.95 15.25 +0.30

SingaporePremium gasoline (unleaded) 20.75 22.61 20.95 –1.66Gasoil (0.5%S) 21.87 20.11 20.94 +0.83Fuel oil (380 cst) 15.46 16.44 16.19 –0.25

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In Japan, despite the closure of the80,000 b/d Hyogo refinery on weak prod-uct demand, refinery throughput increasedslightly to 4.22m b/d in December. Therefinery utilization rate was 85.1 per cent,which was 5.4 percentage points below thelevel in the corresponding period last year.

The oil futures market

NYMEX WTI started 2002 with a sharpgain of $1.17/b on the first trading day inJanuary, as bullish sentiments werestrengthened by OPEC/non-OPEC’s cutsand the high volume of short non-commercial positions. For the rest of thefirst week of January, prices were volatile.The downward pressure on prices stemmedfrom the weak heating oil market, sincedistillate stocks were higher than the five-year average and there were forecasts ofabnormally warm weather on the EastCoast. The bullish sentiments that pushedprices higher were a forecast of tightnessin 1Q02; they also reflected healthy im-plied gasoline demand figures (8.8m b/d)in the USA, despite the weakness in theeconomy. However, the bearish sentimentswere stronger and WTI moved down to$20.38/b.

The second week witnessed a contin-ued downward move, with widening inthe contango. The weakness in crude wasattributed to the expectation of lowerrefinery runs, as crude stocks were steady,despite lower exports. Further selling oc-curred after the market interpreted theassessment of Federal Reserve Chairman,Alan Greenspan, as negative, leading toweak demand. The API’s weekly data putfurther pressure on prices, since it showedbuilds of 4.0m b and 4.2m b in crude anddistillate stocks, respectively, as well as acontraction in gasoline demand from 8.8mb/d to 8.0m b/d. Speculation about OPEC/non-OPEC’s compliance with their agreedcuts dragged prices down further and WTIreached $17.97/b.

During the third week, prices reversedtheir trend and moved upwards, basicallydue to short-covering and technical buy-ing. The rise in prices came, despite bear-ish indicators. For example, Valero cut itsrefinery output of 1.5m b/d by 18 per centin January, partly due to weak refiners’margins. API statistics showed that im-

demand in January, its price was relativelystrong compared with other distillate prod-ucts. This indicated a switch in the mar-ket’s focus from heating oil to gasoline, inlight of the persistent unseasonably warmweather during the current winter, amidhefty distillate stock-builds, which were16 per cent higher than last year’s level.Gasoline inventories, on the other hand,saw a modest rise of eight per cent abovethe previous year’s thin level.

Furthermore, discretionary refineryrun cuts, in response to weak refiners’margins, and intensive refinery turna-rounds, lent support to NYMEX gasolinefutures and, with it, the spot markets, inanticipation of tightened supply in theforeseeable future. The fuel oil priceclimbed by 9¢/b, reflecting balanced fun-damentals, as the less well-supplied mar-ket, caused by refinery shut-downs andlower South American cargo arrivals, wasoffset by slow activity in transatlanticarbitrage to Europe (see Table B).

A combination of the strong gasolineprice and moderate increases in otherproduct prices eclipsed a modest rise in theWTI market, and therefore refiners’ mar-gins moved barely into positive territory.

Under pressure from the continuouslyweak margins, US refinery throughputaccelerated its downward movement, los-ing another 360,000 b/d from its Decem-ber level to average around 14.67m b/d inJanuary; this reflected the prevailing moresteeply reduced refinery run cuts and thestart of annual maintenance in the USGulf refining centre. The equivalent refin-ery utilization rate was 88.5 per cent,which was 2.3 percentage points lowerthan last year’s level (see Table C).

Rotterdam marketGasoline rebounded, gasoil experi-

enced a moderate increase and fuel oilsustained modest rises in December, at-tributed in part to the relative strength ofBrent, compared with WTI. Intensifiedarbitrage trading to the US East Coast,however, was the underlying reason forthe gasoline price soaring by $1.49/b,although regional demand was sluggish.Gasoil rose by 37¢/b, despite a continuedlack of demand from the largest Europeanmarket, Germany, due to sufficient end-user inventories. Fuel oil increased by afurther 30¢/b, assisted by healthy bunker

demand and robust demand from Medi-terranean utilities during the first half ofthe month, as a result of colder-than-average weather. Nonetheless, Russia’sdecision to remove fuel oil export limitsand cut the tariff tax by half, as well as aninflux of South American cargoes, causingabundant supply, exerted downward pres-sure on its price later in the month (seeTable B).

Refiners’ margins recovered slightly,but remained well in negative territory, asthe surge in the Brent price hinderedproduct price gains.

Refinery throughput in Eur-16 (EU +Norway) fell by a further 210,000 b/d to12.00m b/d in January, responding topoor refiners’ margins. The equivalentutilization rate was 87.9 per cent, whichwas 5.5 percentage points below the pre-ceding year’s figure (see Table C).

Singapore marketThe prices of both the light and heavy

ends of the barrel deteriorated, drivenessentially by fading regional demand,while gasoil rose, tracking Dubai’s strongmarket, in January. Gasoline fell by$1.66/b, undermined by the absence ofthe largest regional buyer, Indonesia, al-though the rising regional naphtha priceand prevailing lower exports from Chinawere supportive factors later in the month.Gasoil fundamentals continued to beweighed down by more-than-ample sup-ply facing sagging demand, linked to theeconomic turmoil; nevertheless, its pricegained 83¢/b, supported by the relativestrength of the marker crude, Dubai,compared with other world benchmarkcrudes. Lack of Chinese demand for fueloil, after its larger-than-normal purchaseduring December, and a build in highdomestic inventories, particularly in thesouthern province of Guangdong, putdownward pressure on the fuel oil price,which lost 25¢/b; this shrugged off therising crude price, although the marketwas less well-supplied, due to the absenceof European cargoes, on narrowed pricedifferentials and sustained Asian refineryrun cuts (see Table B).

Refiners’ margins plunged into nega-tive territory, due largely to the excep-tional strength of Dubai’s price and, to alesser extent, the weakness of the gasolineand fuel oil markets (see Table C).

22 OPEC Bulletin

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ports surged to 9.6m b/d and that crudeoil stocks were at 315m b. Despite this,WTI moved up to $19.70/b.

The last week of January was volatile.The upward movement at the beginningof the week was due to short-covering byfunds, while the bearish demand and stockdata shown in figures from the API andthe US Department of Energy took overlater in the week, to push crude pricesdown. News of an explosion at an oil-gathering centre in Kuwait and a potentialrefinery workers’ strike salvaged crudeprices at the end of the month and raisedWTI to $19.48/b.

The tanker market

OPEC area spot-chartering rose by 2.37mb/d to a monthly average of 10.19m b/din January, despite the OPEC/non-OPECagreement to reduce oil production byabout 2m b/d, starting on January 1.However, compared with the same periodlast year, the current level of OPEC fix-tures was 3.69m b/d lower. Meanwhile,non-OPEC spot-chartering also rose inJanuary, by 780,000 b/d to 7.31m b/d,due to increased short-haul trading. There-fore, global spot fixtures grew by 3.15mb/d to 17.50m b/d; but this level was6.14m b/d below the corresponding monthin 2001. The OPEC area’s share of globalspot-chartering improved by 3.70 per-centage points to 58.22 per cent, althoughthis was 0.50 percentage points below theprevious year’s level. Most of the incre-ment in OPEC chartering was attributedto a rise in spot fixtures from the MiddleEast on the eastbound long-haul route, by2.22m b/d to 4.72m b/d, while, on thewestbound route, they rose by a marginal110,000 b/d to 1.27m b/d. Consequently,the Middle East eastbound share of totalOPEC fixtures improved by a significant14.42 percentage points to 46.28 per cent,while the westbound share fell by 2.30percentage points to only 12.47 per cent;together, they accounted for 58.75 percent of total chartering in the OPEC area,which was 12.12 percentage points higherthan in the previous month. Preliminaryestimates of sailings from the OPEC areasurged by 6.72m b/d to a monthly averageof 28.45m b/d, which was 30.92 percent-age points above the previous month’s

level. Sailings from the Middle East alsorose, by 4.06m b/d to a monthly averageof 18.50m b/d, which was about 65 percent of total OPEC sailings. Arrivals at theUS Gulf Coast, the East Coast and theCaribbean rose further last month, by730,000 b/d to a monthly average of 9.02mb/d, while arrivals in North-West Europeand Euromed increased by 240,000 b/dto 6.76m b/d and 400,000 b/d to 6.14mb/d, respectively. Estimated oil-at-sea onJanuary 27 was 464m b, which was 12mb below the level observed at the end ofDecember.

Crude oil tanker freight rates exhib-ited mixed trends in January. They firmedfor VLCC and Aframax tankers, but weredepressed for Suezmax tanker trading acrossthe Atlantic Basin. The VLCC spot mar-ket in the Middle East continued to enjoythe positive trend that had started inDecember, amid considerable activity, asfixture volumes improved significantly,especially in the last three weeks of themonth, combined with a reduction in oilcompany relets, which partially squeezedtanker availability in prompt positions.Therefore, the monthly average freightrates on the Middle East eastbound andwestbound long-haul routes rose by eightpoints to Worldscale 48 and five points toW43, respectively. Suezmax freight ratesreversed their upward trend and displayeda weaker trend in January, as the marketappeared to correct what was perceived asovervalued rates during the previousmonth, compared with VLCCs operatingon the same routes. Hence, the monthlyaverage freight rates for Suezmax tankersoperating on the routes from West Africaand North-West Europe to the US GulfCoast plunged by six points to W66 and14 points to W69, respectively. However,Aframax trading on the short-haul routeswitnessed positive trends and regainedsome of the previous month’s losses, onimproved market activity. Freight rates onthe routes across the Mediterranean andto North-West Europe rose by ten pointsto W127 and seven points to W121, re-spectively, while they surged by 24 pointsto W124 on the route from the Caribbeanto the US East Coast. Freight rates for 70–100,000 dwt tankers, on the route fromIndonesia to the US West Coast, im-proved by a further nine points to W114.

Product tanker freight rates also dis-

played mixed trends in January. Theyimproved in the Middle East, retreated inthe Caribbean, the Mediterranean andNorth-West Europe and stabilized in Sin-gapore. Freight rates on the route from theMiddle East to the Far East rose by eightpoints to W154, on the back of increasedenquiries in both regions, while the ratesfrom the Caribbean to the US Gulf Coastdeclined by seven points to W182. Mean-while, clean tanker freight rates, fromNorth-West Europe to the US East Coastand from the Mediterranean to North-West Europe, declined by five points eachto W173 and W170, respectively. On theroute across the Mediterranean, freightrates witnessed the biggest drops, as theyplummeted by 38 points to W152 in anover-supplied market, especially oldertonnage. However, freight rates stabilizedon the route from Singapore to Japan atW172, which was only one point belowthe previous month’s level, encouraged bythe start of the free trade pact that calledfor tariff reductions on oil products tradedbetween the two countries.

World oil demand

Revision for 2000There has been a minor downward

revision to the 2000 world oil demandfigure, which is now assumed to be 75.79mb/d, instead of the 75.83m b/d given inthe last report. This adjustment is notice-able in the ‘Other Europe’ region, wherethe apparent demand has been reviseddown by 40,000 b/d.

Estimate for 2001

WorldWorld oil demand growth has been

revised down slightly. The estimated fig-ure for 2001 is now 75.81m b/d, just20,000 b/d higher than in 2000, a devel-opment not experienced since 1984. Theweak demand is due to the combinationof global economic slowdown, a signifi-cant reduction in commercial air travel,lower natural gas prices and the mild winterweather. The quarterly data shows that,compared with the year-earlier figures,petroleum consumption rose by 710,000b/d and 520,000 b/d in 1Q and 2Q,respectively. This increase was offset by

February 2002 23

M A R K E T R E V I E W

declines in the remaining successive quar-ters. According to historical data, thisdemand pattern has not been observedbefore.

On a regional basis, average annualOECD consumption registered a declineof 170,000 b/d and DC demand a de-crease of 50,000 b/d. The only increasecan be seen in the former centrally plannedeconomics (CPEs), where the apparentdemand rose by 240,000 b/d.

OECDThe latest available data, which in-

cludes 11 months (January to November2001), and the best estimate for Decem-ber show a decrease of 170,000 b/d, or 0.4per cent, to average 47.66m b/d. Theentire decline has been concentrated inNorth America and the OECD Pacific, asthey dropped by 140,000 b/d and 90,000b/d, respectively, while Western Europeexpected a rise of 60,000 b/d.

On a quarterly basis, compared withthe year-earlier figures, OECD demandrose by 670,000 b/d, or 1.4 per cent,during 1Q; for the remaining three quar-ters, demand growth declined by 80,000b/d, 450,000 b/d and 810,000 b/d, re-spectively.

A relative slowdown in the economiesof the USA, Japan and Europe in 3Q and4Q, a reduction in jet fuel consumptionfor the period September to Decemberand warmer weather in the USA, wherethe heating degree days were 21 per centbelow normal in 4Q, contributed to theyear’s decline in oil demand.

The total OECD oil requirement inNovember fell by 170,000 b/d. Signifi-cant drops of 230,000 b/d and 90,000b/d in North America and the OECDPacific, respectively were offset by a rise of140,000 b/d in Western Europe. As the

USA was experiencing unusually warmweather in November, when heating oildecreased by 220,000 b/d, cold weatherwas sweeping parts of Western Europe,boosting heating oil consumption by100,000 b/d.

Developing countriesOil demand in developing countries is

estimated to have decreased by 50,000b/d, or 0.3 per cent, to average 18.72mb/d for the year. However, because of thehuge time-lag and the limited reliability ofdata in this group, this assessment is sub-ject to further change. Evidence suggeststhat consumption in Latin America decel-erated, due to the repercussions of the USeconomic slowdown and the crisis in theArgentine economy. ‘Other Asia’ shows amarginal increase; this group of countrieshas been hit strongly by the economicslowdown in their key export markets.

Other regionsApparent demand in ‘Other regions’,

according to primary data, grew by 240,000b/d, or 2.7 per cent, to a total of 9.43mb/d. Within this group, the FSU is ex-pected to enjoy the highest growth, of180,000 b/d, or 4.9 per cent, contrary tothe period 1998–2000, when FSU de-mand contracted every year. China fol-lows with 70,000 b/d, continuing a positivetrend. A minor decline is expected in‘Other Europe’ demand.

Forecasts for 2002The world oil demand forecast for

2002 has been revised down by 90,000b/d to 76.16m b/d, indicating 350,000b/d, or 0.5 per cent, growth. This adjust-ment has been made to account for down-ward revisions to regional and global GDP

growth rate estimates. This demand growthis obviously higher than 20,000 b/d in2001, but lower than 580,000 b/d in 2000and 1.47m b/d in 1999.

On a quarterly basis, the first half ofthe year is expected to witness a moderateincrease of 80,000 b/d, compared with theprevious year, due to continued economicweakness and the recent unseasonablywarm weather. Reflecting the emergenceof economic recovery and the assumptionof normal weather, demand in the secondhalf of the year is projected to be 610,000b/d higher than in the same period lastyear.

Most of the consumption growth isexpected to come from North America,the Middle East, ‘Other Asia’, the FSUand China, while Western Europe willshow a contraction in demand. The OECDPacific’s demand growth will be negligi-ble, while Latin America will suffer, dueto Argentina’s economic collapse.

The current outlook for oil demand ismarked by a key uncertainty in the pro-jection of GDP. If the recovery in thoseeconomies, mainly the USA and emergingAsian countries, which led the oil demand

Table D: FSU net oil exports m b/d

1Q 2Q 3Q 4Q Year

1998 2.77 3.02 3.18 3.20 3.041999 3.12 3.62 3.52 3.49 3.442000 3.97 4.13 4.47 4.01 4.1420011 4.30 4.74 4.83 4.39 4.5720022 4.90 5.31 5.00 4.95 5.04

1. Estimate.2. Forecast.

Table E: OPEC crude oil production, based on secondary sources 1,000 b/d

Jan 02/2000 3Q01 Dec 01* 4Q01 2001 Jan 02* Dec 01

Algeria 808 831 823 813 821 792 –31Indonesia 1,279 1,209 1,180 1,180 1,216 1,163 –16IR Iran 3,671 3,706 3,459 3,479 3,665 3,310 –149Iraq 2,551 2,487 2,030 2,558 2,385 2,192 162Kuwait 2,101 2,012 1,952 1,949 2,032 1,869 –83SP Libyan AJ 1,405 1,366 1,304 1,308 1,361 1,270 –34Nigeria 2,031 2,087 2,095 2,116 2,097 2,000 –95Qatar 698 691 618 632 683 592 –25Saudi Arabia 8,247 7,914 7,500 7,538 7,918 7,246 –254UAE 2,251 2,122 2,026 2,031 2,163 1,960 –66Venezuela 2,897 2,801 2,695 2,701 2,830 2,580 –115

Total OPEC 27,941 27,226 25,681 26,305 27,170 24,974 –707

* Not all sources available.Totals may not add, due to independent rounding.

24 OPEC Bulletin

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growth in the late 1990s, does not mate-rialize, then there is the risk that world oildemand could be flat, or even decline.

World oil supply

Non-OPEC

Figures for 2001The 2001 non-OPEC supply figure

has been revised up by 40,000 b/d to46.53m b/d, compared with the last re-port. The figures for 1Q and 2Q have beenrevised down by 20,000 b/d to 46.22mb/d and 40,000 b/d to 45.97m b/d, re-spectively, while those for 3Q and 4Qhave been revised up by 10,000 b/d to46.64m b/d and by a significant 210,000b/d to 47.27m b/d, respectively. The yearlyaverage increase is estimated at 750,000b/d, compared with the 2000 figure.

Expectations for 2002Our 2002 non-OPEC supply forecast

has been revised up by 110,000 b/d andshows an increase of 940,000 b/d, com-pared with the figure estimated for 2001.The expected 2002 quarterly distributionis estimated at 47.14m b/d, 46.90m b/d,47.58m b/d and 48.23m b/d, respectively,resulting in a yearly average of 47.47m b/d.

The net oil export figures for the FSUfor 2001 and 2002 have been revised upby 10,000 b/d to 4.57m b/d and by 30,000b/d to 5.04m b/d, respectively, comparedwith the last report (Table D).

OPEC natural gas liquidsThe OPEC NGL figures for 1998–2002

remain unchanged from the last report, at3.01m b/d, 3.07m b/d, 3.23m b/d, 3.24mb/d and (forecast) 3.26m b/d, respectively.

OPEC NGL production — 1998–2002m b/d

1998 3.011999 3.072000 3.231Q01 3.242Q01 3.243Q01 3.244Q01 3.242001 3.24Change 2001/2000 0.022002 3.26Change 2002/2001 0.02

period last year. Meanwhile, a draw of10.3m b to 171.2m b on ‘Other oils’capped this build. Other major productinventories displayed minor draws, main-taining more or less the previous month’slevels. The overall level was 81.5m b, orabout nine per cent, above last year’s fig-ure.

During the same period, the US Stra-tegic Petroleum Reserve (SPR) rose by5.2m b to 554.2m b. This rise occurredunder the new ‘royalty-in-kind’ pro-gramme, as a means of filling the SPR tofull capacity (see Table F).

Western EuropeCommercial onland oil stocks in Eur-

16 in January showed a further contra-seasonal build, increasing by a slight 1.2mb, or a rate of 40,000 b/d, to 1,065.7m b.This build, which occurred solely in majorproduct inventories (4.9m b), was cappedby a draw of 3.7m b to 432.2m b on crudeoil stocks, on the back of fewer arrivals,especially Iraqi cargoes. Gasoline contrib-uted the most to the build in productinventories, when it rose by 3.2m b to155.0m b; this was due mainly to lowexports to the US market, as transatlanticarbitrage had been closed in December,encouraging European refiners to storemost of their gasoline output, in a situa-tion of low local demand.

Middle distillates also added to thisbuild, moving up by 1.5m b to 332.7mb. Lower demand, as well as increasingRussian gasoil exports, was behind thisrise. Total oil stocks were 3.5m b higherthan the year-ago level (see Table G).

JapanIn December, commercial onland oil

stocks fell by a further 18.5m b, or a rateof 510,000 b/d, to 182.0m b. Distillatescontributed largely to this draw, decliningby 8.4m b to 37.8m b, on the back of loweroutput, due to weak refiners’ margins.Other major products also contributed tothis decrease, as gasoline and fuel oil de-clined by 1.8m b to 12.3m b and 1.4m bto 18.5m b, respectively. A 70,000 b/dimprovement in refinery throughput, to-gether with lower imports, were behindthe draw on crude oil of 4.1m b to 113.4mb. Total oil stocks were 3.5m b, or abouttwo per cent, above the year-ago level (seeTable H).

OPEC crude oil productionAvailable secondary sources indicate

that, in January, OPEC’s output was24.97m b/d, which was 770,000 b/d lowerthan the revised December level of 25.68mb/d. Table E shows OPEC’s production,as reported by selected secondary sources.

Rig count

With effect from this issue, this section on therig count will be included in the Monthly OilMarket Report.

Non-OPECRig activity in 2001 was 260 rigs higher

than in 2000, with 1,991 rigs in 2001,against 1,732 in 2000. Most of the in-crease in rig activity took place in theOECD, especially North America. InJanuary 2002, the non-OPEC rig countincreased by 138 to 1,771, compared withthe December 2001 figure of 1,633. A 141rig rise in the OECD was partially offsetby a drop of five rigs in developing coun-tries, which was totally attributable to thesituation in Latin America.

OPECOPEC’s rig activity in 2001 was 32

rigs higher than in 2000, with 238 rigs in2001, compared with 206 in 2000. InJanuary 2002, the OPEC rig countdropped by eight to 236, compared withthe December 2001 figure of 244.

Stock movements

USAUS commercial onland oil stocks

showed an unseasonable build of 8.1m b,or a rate of 230,000 b/d, to 1,017.3m bduring December 28–February 1. Most ofthe build occurred with crude oil, whichrose by 9.4m b to 319.3m b, on the backof low refinery runs, due to poor refiners’margins, as well as higher crude oil im-ports. This was followed by gasoline, whichrose by 8.5m b to 216.4m b, due to anincrease in gasoline output, as weak heat-ing oil margins encouraged refiners toproduce more gasoline at the expense ofdistillates, as well as substantially lowerapparent demand, which fell by aboutfour per cent, compared with the same

February 2002 25

M A R K E T R E V I E W

Table F: US onland commercial petroleum stocks1 m b

ChangeJun 29, 01 Oct 5, 01 Dec 28, 01 Feb 1, 02 Jan/Dec Feb 11, 01

Crude oil (excl SPR) 310.7 307.4 309.9 319.3 9.4 294.2Gasoline 221.6 206.1 207.9 216.4 8.5 205.6Distillate fuel 112.8 124.6 137.6 137.3 –0.3 118.2Residual fuel oil 42.5 36.7 40.9 40.6 –0.3 37.1Jet fuel 43.0 44.0 40.7 40.5 –0.2 43.7Unfinished oils 90.4 88.9 90.6 92.0 1.4 91.6Other oils 191.4 219.7 181.5 171.2 –10.3 145.5Total 1,012.4 1,027.4 1,009.2 1,017.3 8.1 935.8SPR 543.3 544.8 549.0 554.2 5.2 541.7

1. At end of month, unless otherwise stated. Source: US/DoE-EIA.

Table G: Western Europe onland commercial petroleum stocks1 m b

ChangeJun 01 Sept 01 Dec 01 Jan 02 Jan/Dec Jan 01

Crude oil 438.5 436.6 436.0 432.2 –3.7 420.0Mogas 155.6 144.6 151.8 155.0 3.2 155.8Naphtha 25.1 26.0 26.4 26.0 –0.4 23.3Middle distillates 331.4 323.4 331.2 332.7 1.5 336.4Fuel oils 122.2 121.0 119.1 119.8 0.7 126.6Total products 634.3 615.0 628.5 633.4 4.9 642.1Overall total 1,072.8 1,051.6 1,064.5 1,065.7 1.2 1,062.1

1. At end of month, and includes Eur-16. Source: Argus Euroilstocks.

Table H: Japan’s commercial oil stocks1 m b

ChangeJun 01 Sept 01 Nov 01 Dec 01 Dec/Nov Dec 00

Crude oil 127.3 118.0 117.5 113.4 –4.1 105.1Gasoline 14.3 13.8 14.1 12.3 –1.8 12.7Middle distillates 33.6 45.7 46.2 37.8 –8.4 40.3Residual fuel oil 19.8 19.9 19.9 18.5 –1.4 20.4Total products 67.7 79.5 80.3 68.6 –11.7 73.4Overall total2 195.1 197.5 197.8 182.0 –15.8 178.5

1. At end of month. Source: MITI, Japan.2. Includes crude oil and main products only.

26 OPEC Bulletin

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OECDIn 4Q01, OECD commercial onland

oil stocks (the USA, Eur-16 and Japan) areestimated to have shown a marginal sea-sonal draw of 20.8m b, or a rate of 230,000b/d, to 2,255.7m b, compared with theprevious quarter. US and Japanese stocksdecreased by 18.2m b and 15.5m b, re-spectively, while a contra-seasonal build of12.9m b in Eur-16 diminished the overallimpact of the draw (see Table I).

Balance of supply/demand

For 2001, world oil demand and non-OPEC oil supply have been revised downby less than 100,000 b/d and up by lessthan 100,000 b/d to 75.8m b/d and 49.8mb/d, respectively. These revisions have re-sulted in a yearly average difference of26.0m b/d, down by 100,000 b/d, com-pared with the last report, with quarterlydistributions of 27.1m b/d, 25.4m b/d,25.8m b/d and 25.9m b/d, respectively.The balance for 1Q has been revised down

Table I: Estimated stock movements in OECD on fourth quarter of 20011

m b

Change Dec/SeptSeptember 01 December 01 m b m b/d

USA 1,027.4 1,009.2 –18.2 –0.20Eur-16 1,051.6 1,064.5 12.9 0.14Japan 197.5 182.0 –15.5 –0.17OECD total 2,276.5 2,255.7 –20.8 –0.23

1. Includes USA, Eur-16 and Japan only.Data as at end of month.

by less than 100,000 b/d to 900,000b/d, while the other three quarters havebeen revised up by less than 100,000b/d to 1.7m b/d, less than 100,000 b/d to1.4m b/d and more than 200,000 b/d to400,000 b/d, respectively. The 2000 bal-ance has been revised up by less than100,000 b/d to 1.2m b/d, compared withlast month’s report.

The year 2002 shows a downward

revision to world oil demand of 100,000b/d to 76.2m b/d, while total non-OPECsupply has been revised up by 100,000b/d to 50.7m b/d. This has resulted inan expected annual difference of around25.4m b/d, down by 200,000 b/d,compared with the last report, with aquarterly distribution of 26.3m b/d, 24.5mb/d, 25.0m b/d and 25.9m b/d, respec-tively (see Table J).

February 2002 27

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Table J: World crude oil demand/supply balance m b/d

1998 1999 2000 1Q01 2Q01 3Q01 4Q01 2001 1Q02 2Q02 3Q02 4Q02 2002

World demandOECD 46.8 47.7 47.8 48.8 46.5 47.5 47.8 47.7 48.7 46.4 47.3 48.5 47.7

North America 23.1 23.8 24.1 24.2 23.7 24.0 23.9 24.0 24.0 23.9 24.0 24.2 24.0Western Europe 15.3 15.2 15.1 15.2 14.8 15.5 15.2 15.1 15.2 14.6 15.3 15.4 15.1Pacific 8.4 8.7 8.7 9.4 8.0 8.1 8.8 8.6 9.4 7.9 8.0 9.0 8.6

Developing countries 18.2 18.6 18.8 18.7 18.8 19.0 18.4 18.7 18.8 18.9 19.1 18.8 18.9FSU 4.3 4.0 3.8 3.9 3.7 3.8 4.4 3.9 3.9 3.7 4.1 4.4 4.0Other Europe 0.8 0.8 0.7 0.8 0.7 0.7 0.7 0.7 0.8 0.8 0.7 0.7 0.8China 3.8 4.2 4.7 4.4 4.9 4.7 5.0 4.7 4.5 5.0 4.6 5.0 4.8(a) Total world demand 73.8 75.2 75.8 76.6 74.6 75.7 76.4 75.8 76.7 74.7 75.9 77.4 76.2

Non-OPEC supplyOECD 21.8 21.3 21.9 21.8 21.6 21.8 22.3 21.9 21.9 21.7 21.9 22.4 22.0

North America 14.5 14.1 14.3 14.2 14.3 14.5 14.7 14.4 14.4 14.4 14.6 14.9 14.6Western Europe 6.6 6.6 6.7 6.8 6.5 6.6 6.9 6.7 6.7 6.5 6.6 6.9 6.7Pacific 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.8

Developing countries 10.5 10.8 11.0 11.0 10.8 11.0 11.0 11.0 11.2 11.0 11.3 11.2 11.2FSU 7.3 7.5 7.9 8.2 8.5 8.6 8.8 8.5 8.8 9.0 9.1 9.3 9.0Other Europe 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2China 3.2 3.2 3.2 3.3 3.2 3.3 3.3 3.3 3.3 3.3 3.4 3.4 3.3Processing gains 1.6 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7Total non-OPEC supply 44.5 44.6 45.8 46.2 46.0 46.6 47.3 46.5 47.1 46.9 47.6 48.2 47.5OPEC NGLs 3.0 3.1 3.2 3.2 3.2 3.2 3.2 3.2 3.3 3.3 3.3 3.3 3.3(b) Total non-OPEC supply and

OPEC NGLs 47.5 47.6 49.0 49.5 49.2 49.9 50.5 49.8 50.4 50.2 50.8 51.5 50.7

OPEC crude oil production1 27.8 26.5 27.9 28.1 27.1 27.2 26.3 27.2Total supply 75.2 74.1 76.9 77.6 76.3 77.1 76.8 76.9Balance2 1.5 -1.1 1.2 0.9 1.7 1.4 0.4 1.1

Closing stock level (outside FCPEs) m bOECD onland commercial 2698 2446 2527 2523 2595 2650 2621OECD SPR 1249 1228 1210 1210 1207 1205 1220OECD total 3947 3675 3737 3733 3803 3855 3841Other onland 1056 983 999 998 1017 1031 1027Oil on water 859 808 876 913 834 863 na .Total stock 5861 5466 5612 5645 5653 5749 na .

Days of forward consumption in OECDCommercial onland stocks 57 51 53 54 55 55 54SPR 26 26 25 26 25 25 25Total 83 77 78 80 80 81 79Memo itemsFSU net exports 3.0 3.4 4.1 4.3 4.7 4.8 4.4 4.6 4.9 5.3 5.0 5.0 5.0[(a) — (b)] 26.3 27.6 26.8 27.1 25.4 25.8 25.9 26.0 26.3 24.5 25.0 25.9 25.4

Note: Totals may not add up due to independent rounding. na not available.1. Secondary sources.2. Stock change and miscellaneous.

Table J above, prepared by the Secretariat’s Energy Studies Department, shows OPEC’s current forecast of world supply and demand foroil and natural gas liquids.

The monthly evolution of spot prices for selected OPEC and non-OPEC crudes is presented in Tables One and Two on page 29, whileGraphs One and Two (on pages 28 and 30) show the evolution on a weekly basis. Tables Three to Eight, and the corresponding graphson pages 31–36, show the evolution of monthly average spot prices for important products in six major markets. (Data for Tables 1–8 isprovided by courtesy of Platt’s Energy Services).

28 OPEC Bulletin

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Graph 1:Evolution of spot prices for selected OPEC crudes,

October 2001 to January 2002

10

15

20

25

30

35

OPEC Basket

Tia Juana Light

Dubai

Arab Heavy

Arab Light

Bonny Light

BregaKuwait Export

Iran Light

Minas

Saharan Blend

JanuaryDecemberNovemberOctober11 22 33 44 11 22 33 44 11 22 33 44 11 22 33 44

$/barrel

55

February 2002 29

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1. Tia Juana Light spot price = (TJL netback/Isthmus netback) x Isthmus spot price.2. OPEC Basket: an average of Saharan Blend, Minas, Bonny Light, Arabian Light, Dubai, Tia Juana Light and Isthmus.Kirkuk ex Ceyhan; Brent for dated cargoes; Urals cif Mediterranean. All others fob loading port.Sources: The netback values for TJL price calculations are taken from RVM; Platt’s Oilgram Price Report; Reuters; Secretariat’s calculations.

Table 1: OPEC spot crude oil prices, 2001–2002 ($/b)

2001 2002Member Country/ Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Januarytype of crude (API°) 5Wav 4Wav 4Wav 4Wav 5Wav 4Wav 5Wav 4Wav 4Wav 5Wav 4Wav 4Wav 1W 2W 3W 4W 4Wav

AlgeriaSaharan Blend (44.1) 26.08 27.80 24.82 25.65 28.47 28.16 24.82 25.96 26.13 20.65 19.00 19.08 19.67 20.88 18.95 19.00 19.63

IndonesiaMinas (33.9) 24.03 25.62 25.64 27.64 28.21 27.86 25.32 24.82 24.59 19.53 18.29 17.64 18.89 19.21 19.17 18.46 18.93

IR IranLight (33.9) 22.63 24.65 23.58 24.05 25.58 25.80 23.78 24.68 24.54 20.04 17.64 17.69 18.90 19.88 18.33 18.45 18.89

IraqKirkuk (36.1) — — — — — — — — — — — — — — — — —

KuwaitExport (31.4) 21.08 23.10 22.03 22.50 24.03 24.25 22.47 23.13 22.99 18.49 16.09 16.14 18.25 19.02 17.65 17.53 18.11

SP Libyan AJBrega (40.4) 25.93 27.79 24.69 25.54 28.85 28.18 24.96 25.73 25.91 20.62 19.00 18.81 19.65 20.88 19.00 19.12 19.66

NigeriaBonny Light (36.7) 25.43 27.40 24.35 25.43 28.51 28.06 24.81 25.41 25.98 20.60 18.92 18.78 19.88 20.81 18.88 18.96 19.63

Saudi ArabiaLight (34.2) 22.31 24.82 23.77 24.24 25.77 26.17 24.03 24.92 24.73 20.16 17.82 17.99 18.95 19.63 18.55 18.22 18.84Heavy (28.0) 20.74 23.32 22.57 23.15 24.60 24.88 22.61 23.77 23.63 19.36 17.00 17.21 18.20 18.78 17.70 17.37 18.01

UAEDubai (32.5) 22.56 24.79 23.67 24.06 25.40 25.86 23.45 24.70 24.37 19.93 17.62 17.60 18.63 19.39 18.01 17.91 18.49

VenezuelaTia Juana Light1 (32.4) 23.18 22.79 21.08 20.79 22.77 22.30 20.55 21.54 20.72 17.66 15.28 14.89 15.77 16.58 14.64 14.73 15.43

OPEC Basket2 24.06 25.41 23.70 24.38 26.25 26.10 23.73 24.46 24.2924.2924.2924.2924.29 19.64 17.65 17.53 18.50 19.30 17.81 17.69 18.33

Table 2: Selected non-OPEC spot crude oil prices, 2001–2002 ($/b)

2001 2002Country/ Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Januarytype of crude (API°) 5Wav 4Wav 4Wav 4Wav 5Wav 4Wav 5Wav 4Wav 4Wav 5Wav 4Wav 4Wav 1W 2W 3W 4W 4Wav

Gulf AreaOman Blend (34.0) 22.43 24.29 23.26 23.82 25.55 25.53 23.61 24.44 24.49 19.93 17.67 17.87 18.76 19.45 18.09 17.94 18.56

MediterraneanSuez Mix (Egypt, 33.0) 22.09 22.61 19.73 21.58 24.56 23.83 21.37 22.48 23.11 17.75 16.09 16.68 17.78 18.59 16.10 15.23 16.93

North SeaBrent (UK, 38.0) 25.60 27.30 24.42 25.37 28.35 27.96 24.66 25.78 25.84 20.54 18.80 18.58 19.71 20.58 18.70 18.82 19.45Ekofisk (Norway, 43.0) 25.51 27.49 24.34 25.38 28.45 27.59 24.55 25.70 25.73 20.35 18.70 18.51 19.62 20.49 18.59 18.67 19.34

Latin AmericaIsthmus (Mexico, 32.8) 24.80 24.63 22.60 22.86 24.62 24.25 22.67 23.86 23.49 18.94 16.61 16.73 17.72 18.63 16.45 16.55 17.34

North AmericaWTI (US, 40.0) 29.42 29.48 27.27 27.37 28.60 27.67 26.53 27.41 26.40 22.20 19.49 19.40 20.36 20.97 18.81 18.79 19.73

Others

Urals (Russia, 36.1) 24.40 24.78 21.72 23.60 26.46 25.60 23.08 24.46 25.05 19.80 17.83 18.37 19.42 20.33 17.68 17.38 18.70

30 OPEC Bulletin

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Graph 2:Evolution of spot prices for selected non-OPEC crudes,

October 2001 to January 2002

10

15

20

25

30

35

OPEC Basket

Urals

West Texas

Isthmus

Ekofisk

Brent

Suex Mix

Oman

JanuaryDecemberNovemberOctober11 22 33 44 11 22 33 44 11 22 33 44 11 22 33 44

$/barrel$/barrel

55

February 2002 31

M A R K E T R E V I E W

Table 3: North European market — bulk barges, fob Rotterdam ($/b)regular gas premium gas fuel oil

2000 naphtha unleaded 87 unleaded 95 gasoil jet kero 1%S 3.5%SJanuary 27.41 27.81 28.23 28.96 32.24 19.85 18.83February 29.87 31.63 32.32 29.85 32.72 21.52 19.81March 31.06 35.71 36.27 30.28 34.01 22.67 22.12April 24.83 32.90 33.42 28.23 32.81 19.44 18.12May 28.39 37.01 38.99 29.87 32.07 20.02 18.70June 30.41 40.57 44.28 31.40 34.40 23.79 21.23July 29.89 36.51 37.67 33.02 36.07 24.13 19.79August 29.79 34.82 36.20 36.46 38.69 21.47 19.69September 33.28 36.87 37.70 42.09 43.84 24.29 23.04October 33.15 34.72 35.28 40.06 43.64 27.06 23.82November 32.51 32.72 33.46 40.68 43.61 25.61 22.18December 29.27 27.77 28.05 34.25 37.50 23.24 18.312001January 27.36 29.44 29.85 30.15 32.03 20.54 15.48February 29.23 32.11 32.49 30.88 33.41 20.48 18.21March 27.19 30.69 31.52 29.38 31.72 20.56 17.58April 27.86 36.47 37.57 30.37 32.45 20.49 17.05May 29.71 37.93 39.09 31.18 34.17 20.48 18.21June 27.21 30.27 31.73 31.06 33.69 19.23 17.97July 22.28 27.06 27.82 29.33 31.55 17.97 17.19August 22.51 27.93 29.36 30.18 31.58 18.18 18.40September 23.19 28.49 29.88 30.87 32.18 19.84 19.23October 19.72 22.36 23.27 27.41 28.53 16.50 16.07November 16.88 19.27 20.20 23.03 24.38 15.49 14.68December 17.48 18.41 19.16 21.35 23.11 14.98 14.952002January 18.98 19.95 20.76 21.67 23.34 16.15 15.24

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 3: North European market — bulk barges, fob Rotterdam

2000 2001

0

10

20

30

40

50

fuel oil 3.5%S

fuel oil 1%S

jet kero

gasoil

premium

regular

naphtha

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb

$/barrel

2002

32 OPEC Bulletin

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Table 4: South European market — bulk cargoes, fob Italy ($/b)gasoline fuel oil

2000 naphtha premium unleaded 95 gasoil jet kero 1%S 3.5%SJanuary 26.26 27.55 28.06 31.43 20.48 17.85February 28.57 32.11 29.97 31.28 22.12 19.05March 29.65 36.27 29.63 32.31 22.40 21.27April 23.41 32.77 26.69 31.16 19.28 17.09May 27.01 38.38 29.15 29.67 20.52 16.51June 28.93 44.06 30.14 31.99 24.50 19.95July 28.26 38.25 32.92 34.18 23.20 18.76August 28.14 36.67 36.09 36.60 20.85 17.85September 31.58 37.87 41.97 41.89 25.00 21.49October 32.48 37.20 41.53 41.85 27.16 23.58November 32.47 33.57 40.44 40.33 24.71 19.47December 27.74 27.79 34.92 35.99 23.46 17.962001January 26.35 28.76 27.32 28.73 20.13 14.35February 26.04 31.89 31.32 29.11 18.80 16.86March 24.13 30.53 27.55 27.89 18.39 16.28April 27.07 36.43 29.00 28.28 19.23 14.96May 29.54 39.45 29.37 29.72 19.39 15.84June 27.15 32.21 30.98 29.40 17.71 15.89July 21.95 25.55 27.77 27.15 17.73 15.59August 22.26 26.60 27.58 27.74 18.20 16.93September 23.46 29.93 27.58 29.36 18.99 17.44October 19.14 23.55 27.58 23.61 15.61 15.07November 16.22 19.41 27.58 20.54 13.61 12.48December 16.91 19.11 27.58 19.16 15.15 13.152002January 18.01 19.89 27.58 19.53 17.65 14.00

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 4: South European market — bulk cargoes, fob Italy

0

10

20

30

40

50

fuel oil 3.5%S

fuel oil 1%S

jet kero

gasoil

premium

naphtha

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb

$/barrel

2000 2001 2002

February 2002 33

M A R K E T R E V I E W

Table 5: US East Coast market — New York ($/b, duties and fees included)gasoline fuel oil

2000 regular unleaded 87 gasoil jet kero 0.3%S LP 1%S 2.2%SJanuary 29.41 34.21 39.42 30.08 21.76 20.42February 33.91 34.64 35.50 31.74 22.90 21.22March 37.10 32.01 34.31 27.07 21.06 20.87April 30.35 30.16 32.20 26.81 20.98 19.85May 37.17 31.39 33.26 28.66 24.59 21.86June 40.12 32.62 33.69 30.69 27.11 23.20July 36.04 32.53 34.42 29.28 24.44 22.20August 36.33 37.17 38.59 29.48 24.50 21.57September 39.90 41.25 43.80 37.21 29.42 25.39October 39.83 41.04 42.86 36.86 29.51 25.96November 39.56 43.46 45.52 35.43 28.66 25.26December 30.96 39.52 40.97 34.59 25.63 22.042001January 34.81 35.51 36.03 33.09 25.40 22.34February 34.68 32.99 34.90 31.51 23.38 19.73March 32.96 31.12 32.91 27.61 23.31 20.30April 39.78 32.83 33.92 27.82 22.80 17.47May 39.06 32.48 35.60 27.84 23.09 18.58June 30.07 31.74 32.92 24.89 20.22 17.64July 28.69 29.31 30.10 23.71 19.33 16.72August 32.56 30.80 32.88 23.69 20.14 18.23September 31.61 30.71 31.77 24.02 20.24 19.80October 25.15 26.40 26.84 20.70 17.91 16.97November 21.68 22.97 23.63 20.28 15.98 14.97December 21.73 21.90 22.52 20.01 16.52 15.282002January 22.90 22.53 23.63 19.23 16.07 15.22

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 5: US East Coast market — New York

0

10

20

30

40

50

fuel oil 2.2%S

fuel oil 1%S

fuel oil 0.3%S LP

jet kero

gasoil

regular

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb20002000 20012001

$/barrel

20022002

34 OPEC Bulletin

M A R K E T R E V I E W

Table 6: Caribbean cargoes — fob ($/b)fuel oil

2000 naphtha gasoil jet kero 2%S 2.8%SJanuary 28.17 30.61 32.85 19.82 18.46February 33.52 31.85 32.95 20.57 19.36March 32.74 30.82 33.01 20.17 19.70April 28.25 29.44 30.74 19.15 18.50May 32.59 31.11 31.84 21.16 19.39June 36.24 32.27 32.78 22.27 21.40July 31.06 32.35 33.38 20.84 19.67August 32.92 36.63 37.80 19.78 18.54September 35.32 41.01 42.78 23.59 20.46October 34.77 39.90 41.32 23.95 21.71November 34.37 40.93 43.64 22.96 17.96December 29.73 34.63 36.40 19.89 16.902001January 34.10 35.56 36.17 20.21 16.48February 29.87 31.85 32.42 18.14 16.31March 28.63 28.97 30.11 18.26 17.16April 33.60 30.51 31.37 15.81 15.03May 29.65 32.07 34.46 17.50 17.10June 25.85 31.58 32.13 16.64 16.27July 25.06 28.84 29.57 15.54 14.45August 29.04 30.49 31.68 17.20 17.11September 26.30 30.10 30.28 18.70 18.71October 19.86 25.47 25.83 16.28 16.23November 18.74 22.07 22.44 14.26 14.11December 19.32 21.10 21.26 14.35 13.882002January 19.55 21.47 22.28 14.54 13.90

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 6: Caribbean cargoes — fob

20002000 20012001

$/barrel$/barrel

0

10

20

30

40

50

fuel oil 2.8%S

fuel oil 2.0%S

jet kero

gasoil

naphtha

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb20022002

February 2002 35

M A R K E T R E V I E W

Table 7: Singapore cargoes ($/b)gasoline fuel oil

2000 naphtha premium unleaded 95 gasoil jet kero 0.3%S 180C 380CJanuary 25.02 28.36 28.14 31.30 21.58 19.66 19.95February 27.09 31.16 29.90 31.14 23.43 20.76 21.15March 29.08 32.58 32.94 32.37 25.85 24.66 24.69April 25.01 28.01 26.73 27.99 24.54 22.13 22.39May 27.27 31.90 28.12 29.09 26.62 23.62 23.60June 28.13 33.08 30.69 31.23 26.78 25.30 25.31July 27.80 36.05 31.86 33.25 25.45 22.00 22.09August 30.19 38.31 37.46 37.98 27.08 21.57 21.64September 34.53 35.05 40.13 42.21 28.44 24.81 24.87October 33.50 33.03 38.96 43.30 26.77 26.35 26.55November 30.43 32.96 34.85 39.88 26.50 24.36 24.49December 25.52 29.97 29.61 32.92 24.45 19.78 19.742001January 25.50 30.02 28.41 29.70 22.54 18.37 17.99February 27.83 31.33 27.57 30.48 22.68 19.91 19.69March 27.43 29.88 26.83 28.72 22.43 20.08 20.04April 28.14 32.76 29.80 30.25 22.60 20.48 20.47May 28.89 32.64 30.79 30.74 23.72 22.02 22.07June 27.57 26.89 30.00 30.84 25.11 20.26 20.16July 24.38 24.36 28.54 28.93 24.08 19.03 19.19August 24.33 26.68 28.71 29.37 21.03 20.70 20.94September 24.67 29.47 29.44 31.05 20.38 21.74 21.85October 20.58 22.23 25.53 25.92 19.10 18.53 18.72November 18.15 20.75 21.87 22.40 15.84 15.47 15.46December 18.36 22.61 20.11 21.77 15.78 16.15 16.442002January 19.20 20.95 20.94 22.77 16.30 16.04 16.19

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 7: Singapore cargoes

0

10

20

30

40

50

fuel oil 380C

fuel oil 180C

fuel oil 0.3%S

jet kero

gasoil

premium

naphtha

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb20002000 20012001

$/barrel$/barrel

20022002

36 OPEC Bulletin

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Table 8: Middle East— fob ($/b)fuel oil

2000 naphtha gasoil jet kero 180CJanuary 24.62 26.63 29.87 18.47February 26.75 28.32 29.64 19.59March 28.42 31.28 30.79 23.40April 24.42 25.01 26.36 20.66May 26.84 26.39 27.46 22.06June 27.63 28.76 29.40 23.60July 27.07 29.73 31.24 20.27August 29.12 35.24 35.88 19.49September 33.03 37.79 40.01 22.98October 31.51 36.62 40.97 24.39November 28.88 32.42 37.38 22.05December 24.19 26.46 29.73 17.062001January 24.29 25.05 26.38 15.68February 26.86 24.40 27.31 17.58March 26.28 24.31 26.41 17.93April 27.42 28.05 28.49 18.83May 28.57 29.11 29.02 20.74June 26.95 28.08 28.93 18.92July 23.53 26.77 27.16 17.65August 23.49 27.15 27.78 19.28September 24.07 28.00 29.64 20.57October 20.47 24.05 24.42 17.51November 18.24 20.91 21.44 14.55December 17.61 19.33 20.48 14.612002January 19.42 20.08 21.92 15.01

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days.

Graph 8: Middle East — fob

0

10

20

30

40

50

fuel oil 180C

jet kero

gasoil

naphtha

JanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb2000 2001

$/barrel

2002

February 2002 37

M E M B E R C O U N T R Y F O C U SM E M B E R C O U N T R Y F O C U S

Nigeria unveils plans to strengthenoperations of ports this year

Abuja — The Nigerian Minister of Transport, Ojo Maduekwe,has said that the privatization of the country’s ports, scheduledfor this year, would proceed speedily and thoroughly to improveoperations in the West African country.

However, he told newsmen in the capital Abuja that thestate-run Nigerian Port Authority (NPA) would not be sold off,noting that “the government is not in the process of selling theNPA.”

The proposed privatization of Nigerian ports has drawncontroversy over the fate of the workers of the Authority. TheMinister explained that the privatization programme was de-voted to “the improvement of those aspects that will be amenableto privatization, so as to achieve the optimal level of moderni-zation at our ports.”

He said the development of port infrastructure and increasedtraining of personnel and allied workers would be some of thedividends of the envisaged privatization.

“What we are looking at is beyond privatization. The goalis the modernization of the ports and the tool is privatization,”he explained.

Maduekwe went on: “We are studying models around theworld where ports are fully privatized, and the federal govern-ment will only be involved in land ownership, safety of opera-tions and training.”

He said the strengthening of the ports and operations of theNPA were aimed at positioning them effectively for the chal-lenges facing Nigeria as a commercial hub in West Africa’smaritime sector.

According to the Minister, Nigeria was strategically placedin the world to handle increased crisscrossing of ocean liners andvessels from Asia to Europe and America.

He noted, however, that except the mainly private sector-controlled ports of Hong Kong and Singapore, “there is no portin the world where there is zero participation on the part of thegovernment.”

Algeria accepts offers from fourfirms for desalination plant

Algiers — The Algerian Water Authority (ADE) last monthaccepted technical offers from four international firms for therealization of a desalination plant at Oran, in western Algeria.

The firms comprise French water companies Vivendi andOndeo Degrement, the United States-Spanish group of Madesa,and SNC Lavalin of Canada.

The plant would have a capacity of 100,000 cubic metres/day of water and would be constructed with World Bank supportunder a build-operate-transfer procedure.

The successful company would be responsible for the globalfinancing of the plant, which it would operate on a concessionarybasis over a period varying between 10 years and 20 years.

At the end of the prescribed term, the project would betransferred to the ADE. The opening of the sealed tenders isscheduled to be conducted in Algiers in June this year.

The Oran plant would be the country’s second desalinationunit, after the unit to be constructed at Arzew, also awardedrecently to the Japanese association of Itochu/Ihi.

Two other desalination units are projected to be set up inAlgeria, one in Algiers and the other in Skikda, in the east ofthe country.

Iran and Syria hold discussionson boosting energy co-operation

Damascus — The first meeting of the Iran-Syria joint energycommission was held last month with the participation ofrepresentatives from Iran’s Ministry of Energy and Syria’s Ministryof Electricity.

At the talks, Syrian Deputy Minister of Electricity, SofyanAl-Alav, pointed out that peak energy consumption in Syria hadreached 4,699 megawatts, while its power-generating capacitystood at 7,700 mw.

According to a survey, domestic capacity should reach 15,500mw in 2020, which would require investment of $10 billion,the Islamic Republic News Agency (IRNA) reported.

Referring to the fact that Syria imported 90 per cent of itselectrical supplies from overseas, Al-Alav expressed an interestin Tehran-Damascus joint power generation projects.

Iranian Deputy Energy Minister and Managing Director ofthe state-run power firm Tavanir, Mohammad Ahmadian,referred to the potential of the Iranian energy sector.

Syria is currently the most significant market for Iran’selectrical equipment and energy services. So far, 25 agreementshave been signed between the two countries, while 40 more arebeing discussed.

Pertamina seeking out-of-courtsettlement with power firm

Jakarta — Indonesian state oil and gas company Pertaminawill seek an out-of-court settlement with independent powerproducer (IPP) Karaha Bodas.

The move comes despite a recent ruling by a Geneva-basedarbitration panel awarding $261.1 million in compensation tothe firm for the cancellation of a power scheme in 1998.

Pertamina had filed an appeal against the ruling and wasasking the American-Japanese-Indonesian joint venture to re-solve the dispute through an out-of-court mechanism for thesake of all parties, the Jakarta Post newspaper reported.

The international tribunal ordered both Pertamina and stateelectricity company PT PLN to pay compensation, plus interestof four per cent per year starting in January 2001, to KarahaBodas.

The company is 37.5 per cent-owned by Florida Power, 37.5

38 OPEC Bulletin

M E M B E R C O U N T R Y F O C U S

per cent by New York-based Caithness, five per cent by Japan’sTomer, and 10 per cent by Indonesia’s Sumarah Daya Sakti.

Pertamina said it would approach Karaha Bodas to recom-mence the development of the $1 billion geothermal powerproject in the West Java region.

The joint-venture company had invested about $100m inthe scheme before the project was stopped.

PLN would renegotiate the power selling rates with KarahaBodas, said the report, adding that either Pertamina or PLNwould pay arrears due to the IPP, which had signed a contractin 1994 to develop the 400-megawatt project.

Industry observers said the out-of-court settlement would beessential for Indonesian energy and power companies as theyfaced several arbitration suits filed by other IPPs, whose projectshad been affected, or earnings from power sales had suffered,due to huge differences in market demand and the dollar/rupiahexchange rate.

The Indonesian government had been stressing the need torenegotiate the IPP contracts as energy demand in the countryhad fallen below expectations since the mid-1990s economicand political crisis.

The IPP contracts were set on a more optimistic energydemand scenario and double-digit economic growth projections.

Iran’s power capacity to get800-megawatt boost by March

Tehran — The current capacity of existing Iranian powerplants, affiliated to the Energy Ministry, is some 27,000 mega-watts and will be increased by 800 mw by the end of the currentIranian year in March, it was announced last month.

The Managing Director of the Iranian Electricity Promo-tions Organization, Hossein Mahmoudzadeh told reporters thatthree phases of the Shazand power plant in the central city ofArak joined the country’s electricity network this year and afourth phase was set to become operational in the next fewmonths.

The Islamic Republic News Agency (IRNA) quoted him assaying that four phases of the Kerman combined-cycle powerplant in south-eastern Iran had so far become operational,adding that this power plant would have eight phases, the fifthof which was going through test operations.

Six gas units of the Martyr Rajaie power plant, located inthe northern province of Qazvin, comprising nine gas and steamunits, had been put into operation and three other units wouldbecome operational next month, said IRNA.

Mahmoudzadeh noted that the capacity of the country’spower plants would reach 40,000 mw by the end of the country’sthird five-year development plan.

During this period, the absorption of foreign capital in thearea of energy would be paid special attention to, he said, statingthat some reputable German, Swedish and Japanese companieshad announced an interest to take part in Iranian energyprojects.

Regarding efforts made to produce equipment and facilities

needed by the energy sector, the official said that some 90 percent of the required equipment, including generators, electricityposts and power transfer lines, were currently being producedand manufactured by Iranian firms and factories.

Shell’s Nigerian unit to generate400 megawatts of electricity

Abuja — The leading oil and gas producing company inNigeria, Shell Petroleum Development Company (SPDC) isassisting the government to realize its plan of attaining regularand uninterrupted power supplies this year.

This would be done through the generation of 400 mega-watts of electricity by the middle of 2002, said Shell in itsmonthly Shell Bulletin.

The figure would be raised to 1,930 mw by the end of 2004from the Afam V power plant of the state-run National ElectricPower Authority (NEPA).

The power project would boost NEPA’s power generationcapacity by 20 per cent, while the Afam V plant currentlysupplied 100 mw to the national grid.

According to the report, the work, to involve investmenttotalling $540 million, was expected to be undertaken jointlywith Eskom Enterprises, a South African utility company.

SPDC’s Managing Director, Ron van den Berg, was quotedas saying that the project fitted in perfectly with the nationalstrategy of ensuring reliable and cost-effective power supply.

“Our involvement in the project indicates our commitmentto the long-term sustainable development of Nigeria,” he added.

The report also pointed out that the project would help tostimulate the Nigerian economy by enabling the delivery ofreliable, affordable and cleanly generated power to the people.

Shell secured approval to undertake the Afam V power plantfor an initial period of 15 years from an open tender processconducted by NEPA late last year.

UAE’s Borouge begins firstshipments to Egypt, India

Abu Dhabi — The Abu Dhabi Polymers Company (Borouge)this month made its first shipments of petrochemical productsto Egypt and India and will begin exports to Syria shortly, ithas been announced.

Having gone on stream last month, the $1.2 billion Borougepetrochemicals complex had achieved full capacity productionof ethylene and 70 per cent capacity of polyethylene, said thefirm’s Chief Executive Officer, Joost Schrevens.

He noted that production was going ahead at full steam, andsaid that they expected to achieve 100 per cent production ofpolyethylene by the end of February.

Schrevens was quoted by the Gulf News of Dubai as sayingthat some 2,000 tonnes of ethylene had been shipped to Egyptand India.

February 2002 39

M E M B E R C O U N T R Y F O C U S

“As per our plans, one-third of the total production will beexported to Middle East markets and the rest will be shippedto Asia and Europe,” he said.

The Borouge complex at Ruwais comprises a 600,000 tonnes/year ethylene cracker and two Borstar bimodal polyethyleneplants with a combined production capability of 450,000 t/y.

Borouge signed a contract recently with the Abu DhabiNational Tanker Company to undertake shipments of ethylenefrom Ruwais to the hub port of Mina Zayed, as well as to JebelAli in Dubai.

An accord has also been signed by Borouge with Mina Zayed,Mussafah port and Jebel Ali for the export of polyethylene.

Schrevens said Borouge expected positive cash flows startingnext year. “The market is a bit flat this year, but we will breakeven next year and this is as per our plans. The 11 Septemberincidents and what followed slowed down growth,” he noted.

Global demand for polyethylene would touch some 50 milliont/y by the end of 2002, far exceeding production, he went on.

“Borouge will be well-positioned to benefit from the in-creased global demand as by that time, the market will befamiliar with our products and our capacity will also be en-hanced,” he added.

Indonesia to introduce newrulings on tin, rubber exports

Jakarta — Indonesia will soon introduce new rulings on thecountry’s tin and rubber exports, the Jakarta Post newspaperreported last month.

The paper quoted Trade and Industry Minister, RiniSoewandi, as saying that the aim of the move was to controlexports and boost prices for the country’s two vital commodities.

The new tin export ruling would replace Presidential Decree146/1999, which allowed tin concentrate exports. The rulingwould help curb rampant illegal tin mining, said the paper.

The government was also considering designating tin as astrategic commodity, the trading of which would be supervisedby the Ministry, said Ferry Yahya, Director of Agriculture andMining Exports at the Ministry.

The state-owned tin mining firm PT Timah has repeatedlycomplained about rampant illegal mining at its sites.

According to Timah, many thousands of illegal miners wereproducing 30,000 tonnes/year, compared with the company’sproduction of 40,000 t/y from the Bangka and Belitung islands.

Tin concentrate exports by illegal miners had affected globalprices, which had fallen to $3,630/t since the middle of last year,the lowest in three decades, said the paper. Timah said its tinproduction cost was averaging $4,200/t.

The new ruling on rubber exports would also help prop upprices, said the paper, pointing out that the government wouldcut this year’s exports by 10 per cent to some 1.23 million t.

The government had earlier said it would cut rubber outputby 60,000 t this year and by 75,000 t next year throughreplanting in older plantations, while prohibiting the expansionof acreage by encouraging planters to switch crops.

The report said the planned cut in production was part ofIndonesia’s agreement with Thailand and Malaysia to cut rub-ber exports by four per cent over the next two years to lift priceson the global market.

Khelil launches exploitationof Algeria’s first gold field

Algiers — Algerian Energy and Mines Minister, Dr ChakibKhelil, last month launched the exploitation of the country’s firstgold mine, situated in the south of the country.

The Tirek field, which contains pure gold reserves amount-ing to about 600,000 ounces, has started production withmonthly average output of 55 kilograms.

The project is being supervised by the National Gold Com-pany (ENOR), which has a capital of $110 million. It is owned34.12 per cent by the Algerian oil and gas company, Sonatrach.

Speaking at the ceremony, Khelil also announced theupcoming launch of an international tender for the joint exploi-tation of Tirek and the other gold mines of Amesmessa, locatedin the same area.

The Amesmessa scheme, which has total gold reserves of 1.4million ounces, will require investment of about $40m.

ENOR expects the possible participation of Canadian, SouthAfrican, and Australian firms, all of which had shown an interestin the project.

Saudi Arabia plans to build20 more desalination plants

Riyadh — Saudi Arabia plans to build 20 desalination plantsto meet the growing domestic demand for fresh water, triggeredby soaring population growth, it was reported last month.

Another 13 projects to build 15,000 km of pipelines for thetransport of water, fuel and natural gas were under considerationon the east coast, said Abdullah Ibn Abdul Rahman Al-Hussain,Governor of the Saline Water Conversion Corporation (SWCC).

He noted that demand for domestic consumption of water,which was rising at an average rate of 2.6 per cent annually,would increase from 1.8 billion cubic metres in 2000 to 2.03bncu m in 2004, and to 3.1bn cu m by the year 2020.

The figures were contained in a special report issued bySWCC to mark 20 years of rule by Saudi Arabia’s King Fahd.

Major cities to benefit from the new plants include Riyadh,Jeddah, Makkah, Taif, Dammam and Jubail, as well as otherareas in the central and southern parts of the Kingdom.

The population of the Kingdom is just over 22 million,according to 2000 figures, with 73.6 per cent of the total beingSaudi nationals.

Average individual consumption of drinking water in majorcities has jumped from 120 litres/day in 1980 to 315 lt/d in2000.

Saudi Arabia, which accounts for 21 per cent of the global

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production of desalinated water, has 30 plants built at a totalcost exceeding $18.6bn, including $4bn for operation andmaintenance.

All the country’s desalination plants are run by SWCC, andproduce over 3m cu m/d of fresh water and 5,000 megawattsof electricity.

Several foreign companies are vying to enter the Kingdom’swater desalination industry, which experts estimate will needinvestment of $40bn over the next 20 years. The drive is beingled by companies from the United States, Japan and SouthKorea, but also involves local investors.

The Kingdom’s Supreme Economic Council, headed byCrown Prince Abdullah, has set up a permanent department toreceive and scrutinize offers from local and foreign firms regard-ing desalination projects.

Iran’s industrial exports tohit $2.7 billion in 2002-03

Tehran — Iran’s industrial exports will increase from a valueof $1.72 billion in the current Iranian year (which started onMarch 20, 2001) to $2.7bn next year, according to a report inthe English-language Iran Daily last month.

The paper quoted Ahmad Qasemi, Director General ofExports at the Ministry of Industries and Mines, as saying thatsome $1.2bn worth of goods were exported during March-December last year.

He noted that the country’s third five-year economic devel-opment plan (2000-05) projected industrial exports at $1.72bnfor the current Iranian year, of which 93 per cent had so far beenachieved.

Qasemi said the major industrial exports were ferrous metals(15.3 per cent), mineral products (14.3 per cent), textiles (12.2per cent), and foodstuffs (11.6 per cent).

“The budget for the coming fiscal year projects $5.28bn ofnon-oil exports, 41 per cent of which will comprise industrialproducts,” he pointed out.

UAE seen likely to register$4.38bn trade surplus for 2001

Abu Dhabi — The United Arab Emirates (UAE) is expectedto register a trade surplus of $4.38 billion for 2001, equivalentto seven per cent of the country’s gross domestic product,according to a new study.

The nation’s trade surplus was forecast to decline to $2.64bnin 2002, with the expected weakening of oil prices, said the latestcountry report on the UAE by Business Monitor International(BMI).

The UAE posted a trade surplus of $9.23bn in 2000,according to provisional figures. The central bank is yet toupdate the provisional balance of payments data which it re-leased earlier in 2001.

The BMI report said the trade surplus would continue tobe the dominant contributor to a healthy current accountsurplus and it expected the current account to record a $5.5bnsurplus in 2001.

For 2002, the current account would stand at $4.07bn, saidthe BMI. Again, this marked a sharp fall on the 2000 surplus,which provisionally stood at $9.21bn, equivalent to 15.1 percent of GDP, it added.

Indonesian government mullsnew laws on investment

Jakarta — The Indonesian government will be tabling a newbill on investment in the country, to replace the existing lawswhich are more than three decades old, it was announced lastmonth.

“We will submit a new bill to the House of Representativesfor deliberation in February,” said Theo F Toemion, the Chair-man of the Investment Co-ordinating Board.

He stressed that the government planned to provide equaltreatment both to foreign and local investors under the new law.

The proposed new bill, to replace the 1967 law on foreigninvestment and the 1968 law on domestic investment, wouldaim to make Indonesia a more attractive investment destination.

Theo noted that he had studied several countries’ investmentlaws and planned to set up a single agency to approve investmentprojects and offer attractive incentives, including tax holidays.

The new law is part of moves to reverse the recent steepdecline in foreign investment in Indonesia, which dropped bya hefty 41.5 per cent year-on-year to $9.02 billion in 2001.

Investors have been expressing concern about political andsecurity uncertainties, as well as laws prohibiting their opera-tions. Under existing laws, foreign investors are expected to takeon a local partner after a certain number of years in operation.

A new law on wealth-sharing with provinces has led toconfusion affecting several foreign-owned projects. Provincialadministrations had been claiming right of partnerships androyalty fees, said diplomatic sources.

Nigeria and Switzerland signaccord on debt rescheduling

Abuja — The governments of Nigeria and Switzerland havesigned a debt rescheduling agreement, covering the $152 millionowed to the Alpine nation by Nigeria.

The debt is being rescheduled for repayment in 18 years,including a three-year moratorium period, at a fixed interest rateof 4.7 per cent per year.

Nigerian Minister of Finance, Adamu Ciroma, signed forthe Nigerian government, while the Swiss Ambassador to Ni-geria, Rudolf Knoblauch, signed for his country.

Speaking at the signing ceremony, Ciroma expressed thehope that the rescheduling would open a new chapter in relations

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between the two countries and promote greater bilateral eco-nomic, commercial and financial co-operation.

“I seize this opportunity to reaffirm Nigeria’s commitmenttowards actualizing the agreements and in working towards areduction in Nigeria’s external debt burden through discussionand negotiation with our creditors,” he said.

Ciroma said the rescheduling would also provide a platformfor the resumption of normal business, trade and investmentrelations between the two countries, which were hindered by aprevious inability to resolve the problem created by a backlogof debt service arrears.

He urged Switzerland to accelerate the restoration of insur-ance cover by the Swiss Export Credit Agency for Nigerianimports from Switzerland, particularly by private-sector organi-zations.

Ciroma also called for the Swiss government to sponsor tradeand investment missions to Nigeria, with a view to ensuring aspeedy improvement in business relations between the twocountries.

The Head of Nigeria’s Debt Management Office, AkinArikawe, pointed out that the government had earlier concludedan agreement with the 15 member countries of the Paris Clubof creditor nations, to which Nigeria owed 75 per cent of its totaldebt of about $28.6 billion.

The total debt to be rescheduled under the accord was theequivalent of $20bn, he said, adding that Nigeria would signa bilateral agreement with each of the Paris Club memberswithin the framework of the debt rescheduling deal.

Arab states posted growthof 12.5 per cent in 2000

Abu Dhabi — The economies of Arab countries grew bynearly 12.5 per cent in 2000, with most of the increase achievedin the Middle East, due to strong oil prices, according to officialand independent estimates.

The combined gross domestic product of the 22-nation ArabLeague leapt to $709 billion in 2000 from around $629bn in1999, concluded a recent study on the performance of Arabeconomies in 2000.

The study was prepared by the Abu Dhabi-based ArabMonetary Fund (AMF), the 10-member Organization of theArab Petroleum Exporting Countries (OAPEC), and the Ku-waiti-based Arab Fund for Economic and Social Development.

“There was growth of around 12.5 per cent, mainly becauseof expansion in industries and other sectors and higher exports,mainly crude oil,” said the report.

Experts said it was the highest recorded growth rate sincethe early 1980s. Gulf oil producers registered the largest growthin the region as oil sales accounted for more than 80 per centof their income and a third of their GDP.

They estimated that combined GDP in the six-nation GulfCo-operation Council (GCC) jumped by more than 15 per centin 2000 to around $330bn, nearly 45 per cent of total Arab GDP.

An Arab League study presented to an economic conference

in Abu Dhabi last month showed that total Arab oil exportearnings swelled to about $180bn in 2000, up from around$118bn in 1999.

The growth was due to a sharp increase in crude prices tonearly $27/barrel, up from $17.50/b the previous year.

Economists said they expected Arab GDP to have sloweddown in 2001 as crude prices had lost nearly $4/b, with outputalso lower. Oil production was set to go down further this year,in line with the OPEC/non-OPEC deal to cut supplies.

Qatari firm begins supplies ofcaustic soda to local market

Doha — The Qatar Vinyl Company (QVC) has startedsupplying caustic soda to the local market, it was announced lastmonth.

The first local delivery was made to gas firm RasGas,according to Hamad Rashed Al-Nuaimi, who is QVC’s DeputyGeneral Manager.

The company began the production of caustic soda in Aprillast year from its $700 million world class petrochemical unitat Mesaieed.

The plant has been designed to produce a total of 580,000tonnes/year of caustic soda in solution form of 50 per centconcentration.

Nuaimi said the supply of caustic soda was mainly to overseasdestinations. However, with the setting up of a new truck-loading station at Mesaieed, QVC was now able to supply causticsoda to the local and regional market.

QVC was set up to produce raw materials for the PVC

industry. Besides caustic soda, it can produce 175,000 t/y ofethylene dichloride (EDC) and 230,000 t/y of vinyl chloridemonomer (VCM).

The unit is the first producer of EDC, VCM and caustic sodain Qatar, using available ethylene produced by Qapco as oneof the feedstock materials.

Algeria records trade surplusof $10.28 billion in 2001

Algiers — Algeria registered a $10.28 billion trade surplus lastyear, down from the $12.71bn surplus recorded in 2000, it wasofficially reported last month.

According to the National Statistics Centre, the country’stotal global exports were worth about $20.04bn in 2001, downby 9.04 per cent from the $21.85bn recorded the previous year.

Last year’s imports cost the nation $9.76bn, up by 6.4 percent over 2000 figures. Hydrocarbon exports constituted thebulk (97.2 per cent) of Algeria’s sales abroad in 2001, and werevalued at $19.47bn, compared with $21.23bn in 2000.

The 2001 hydrocarbon export figure was revised upwardsfrom a provisional estimate of $18.5bn, which has been an-nounced earlier in the month.

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finance community, including multilat-eral institutions.

In October 1999, the internationalcommunity agreed to make the Initiativebroader, deeper and faster by increasingthe number of eligible countries, raisingthe amount of debt relief each countrywould receive and speeding up delivery.Both HIPC and the subsequent HIPCEnhanced Framework foresee this beingachieved through a strategy of fully pro-portional burden-sharing among all offi-cial creditors. About 38 countries couldultimately qualify for HIPC assistance, ofwhich 34 are in sub-Saharan Africa. Todate, 24 countries have reached their de-cision point under the Enhanced HIPCInitiative and of these, four have reachedtheir completion point under the originalHIPC Initiative. These 24 countries arenow receiving debt relief which will amountto some $36 billion over time. They qualifyfor debt relief in two stages: in the firststage, the debtor country will need todemonstrate the capacity to use prudentlythe assistance granted by establishing asatisfactory track record, normally for threeyears; in the second stage, the country willimplement a full-fledged poverty reduc-tion strategy and an agreed set of measuresaimed at enhancing economic growth.

The OPEC Fund — committed as itis to strategies aimed at securing economicgrowth for the countries it works with —has from the very beginning expressed itssupport of the Initiative and has partici-pated actively in its design.

So far, the OPEC Fund has approved

debt relief under the HIPC Initiative andthe Enhanced framework in the totalamount of $145.8 million. The relief isdirected to 21 countries, 17 of which arein Africa and four in Latin America.

In June 2000, the decision point wasreached for Senegal, and support to acomprehensive debt reduction package forthis country under the HIPC Initiativewas agreed upon by the IMF and theWorld Bank. Total relief from all Sen-egal’s creditors is worth around $850m. Innet present value (NPV) terms, the packageis equal to $688m. This assistance willhelp Senegal advance its poverty reductionprogrammes and stimulate widely sharedand sustainable economic development.

The OPEC Fund has been involved indevelopment activities in Senegal for overtwo decades, providing balance of pay-ments support, helping finance a com-modity imports programme and assistingprojects in the sectors of agriculture, edu-cation, industry, transportation and watersupply and sewerage. The country has alsobenefited from technical assistance grantswhich went towards regional programmesin the energy, agriculture and health sec-tors, and one emergency grant to helpalleviate food shortages. Under this agree-ment, financing in the amount of $6.9mwill be made available to ease Senegal’sdebt burden.

The agreement was signed in Dakar,Senegal by Mamadou Faye, Director ofDebts and Investments of the Republic ofSenegal, and by HE Dr Y Seyyid Abdulai,Director-General of the OPEC Fund.

OPEC Fund for International Development,Parkring 8, PO Box 995, 1011 Vienna, Austria.Tel: +43 1 515640; fax: +43 1 513 9238; tx: 1-31734 fund a; cable: opecfund; e-mail:info@opecfund.org; Web site: http://www.opecfund.org.

OPEC Fund extends debt relief underHIPC to two African countries, and

assists victims of volcano in DR CongoIn January and early February, the OPEC Fund for International Development extended debt relief under theEnhanced HIPC Initiative to two countries, Senegal and Mauritania, and supported a sugar-producing factoryin the Sudan. It also approved four new grants totalling $339,000, including one to help the victims of a volcaniceruption in the Democratic Republic of Congo. Details are given in the following press releases.

No 1/2002Dakar, Senegal, January 16, 2002

Senegal gets debt relieffrom OPEC Fund underthe HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Senegal for the provision ofdebt relief within the framework of theEnhanced Heavily Indebted Poor Coun-tries (HIPC II) Initiative. Endorsed by theInterim and Development Committees ofthe World Bank and the InternationalMonetary Fund in September 1996, theInitiative represents a united effort by theinternational community to address theexternal debt problems of the world’sheavily indebted poor countries. Specifi-cally, it aims to reduce the debt of eligiblecountries to sustainable levels, subject tosatisfactory policy performance, in orderto ensure that adjustment and reformefforts are not put at risk by continuedhigh debt and debt service burdens. As theInitiative requires participation by all rel-evant creditors, debt relief efforts entailco-ordinated actions by the international

February 2002 43

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No 2/2002Nouakchott, Mauritania, January 22, 2002

OPEC Fund extends debtrelief to Mauritania underthe HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theIslamic Republic of Mauritania for theprovision of debt relief within the frame-work of the Enhanced Heavily IndebtedPoor Countries (HIPC II) Initiative.

Endorsed by the Interim and Devel-opment Committees of the World Bankand the International Monetary Fund inSeptember 1996, the Initiative representsa united effort by the international com-munity to address the external debt prob-lems of the world’s heavily indebted poorcountries. Specifically, it aims to reducethe debt of eligible countries to sustainablelevels, subject to satisfactory policy per-formance, in order to ensure that adjust-ment and reform efforts are not put at riskby continued high debt and debt serviceburdens. As the Initiative requires partici-pation by all relevant creditors, debt reliefefforts entail co-ordinated actions by theinternational finance community, includ-ing multilateral institutions.

In October 1999, the internationalcommunity agreed to make the Initiativebroader, deeper and faster by increasingthe number of eligible countries, raisingthe amount of debt relief each countrywould receive and speeding up delivery.Both HIPC and the subsequent HIPCEnhanced Framework foresee this beingachieved through a strategy of fully pro-portional burden-sharing among all offi-cial creditors. About thirty-eight countriescould ultimately qualify for HIPC assist-ance, of which 34 are in sub-SaharanAfrica. To date, 24 countries have reachedtheir decision point under the EnhancedHIPC Initiative and of these, four havereached their completion point under theoriginal HIPC Initiative. These 24 coun-tries are now receiving debt relief whichwill amount to some $36 billion over time.They qualify for debt relief in two stages:in the first stage, the debtor country willneed to demonstrate the capacity to useprudently the assistance granted by estab-

lishing a satisfactory track record, nor-mally for three years; in the second stage,the country will implement a full-fledgedpoverty reduction strategy and an agreedset of measures aimed at enhancing eco-nomic growth.

The OPEC Fund — committed as itis to strategies aimed at securing economicgrowth for the countries it works with —has from the very beginning expressed itssupport of the Initiative and has partici-pated actively in its design.

The OPEC Fund has approved debtrelief under the HIPC Initiative and theEnhanced framework to 21 countries, 17of which are in Africa and four in LatinAmerica.

In February 2000, the decision pointwas reached for Mauritania, and supportfor a comprehensive debt reduction pack-age to this country under the HIPC Ini-tiative was agreed upon by the IMF andthe World Bank. Over time, total relieffrom all of Mauritania’s creditors willamount to approximately $1.1bn, whichimplies debt service savings of roughly$36m per year over the next 10 years, or40 per cent of total yearly debt obligations.In net present value terms (NPV), this reliefrepresents around $622m. This assistancewill help Mauritania cope with its externaldebt burden and reduce the strain onnational budgetary resources, thus freeingup funds to help accelerate structural re-forms and finance needed social pro-grammes.

The OPEC Fund has been involved indevelopment activities in Mauritania forover two decades, providing balance ofpayments support, helping finance a com-modity imports programme and assistingpublic sector projects in the sectors ofagriculture, education, energy and trans-portation.

The Fund has also helped promoteMauritania’s private sector. In addition,the country has also benefited from tech-nical assistance grants for regional pro-grammes in the areas of agriculture, health,energy and transportation, and two othersin support of social development. Addi-tional grants were extended towards thepurchase of educational materials andhelping alleviate food shortages. Underthis agreement, financing in the amountof $9m will be made available to easeMauritania’s debt burden.

The agreement was signed in Nouak-chott by HE Mohamed Ould Nany,Minister of Economic Affairs and Devel-opment of the Islamic Republic of Mau-ritania, and by HE Dr Y Seyyid Abdulai,Director-General of the OPEC Fund.

No 3/2002Vienna, Austria, January 29, 2002

OPEC Fund extendshumanitarian aid toCongo volcano victims

The OPEC Fund for International Devel-opment has approved an emergency assist-ance grant of $100,000 to the DemocraticRepublic of Congo to help purchase reliefitems for victims of the recent volcaniceruption that inundated the city of Gomawith lava flows. At least half of Goma’s500,000-strong population have lost theirhomes and, with most of the businessdistrict destroyed, livelihoods too havebeen compromised.

So far, relief workers have made con-siderable headway in restoring water sup-plies, and food continues to be deliveredto the estimated 350,000 people who havereturned to their homes. By the middle ofthis week, additional shipments shouldreach some 55,000 households. Mean-while, refugee camps in Rwanda are stillstruggling to re-unite families separatedduring the flight from their homeland.Efforts are underway to clear lava fromGoma’s airport, and inhabitants are slowlytrying to rebuild their lives, although mostof the infrastructure remains buried undera layer of lava that will remain hot formonths.

The UN Secretary General, KofiAnnan, has appealed to the internationaldonor community to assist with ongoingrelief and cleanup efforts. Immediate needsare essential supplies such as blankets,plastic sheeting, utensils as well as food,water clothing and other goods.

The OPEC Fund’s contribution tothe aid effort will be used to procureemergency relief items, food and medicalsupplies and will be channeled throughthe International Federation of Red Crossand Red Crescent Societies.

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No 4/2002Khartoum, Sudan, February 7, 2002

OPEC Fund supportssugar producing firmin the Sudan

A private sector loan agreement for $10million was signed between the OPECFund for International Development andthe Kenana Sugar Company in the Sudan.

Operating near Rabak from a 70,000hectare estate, of which 43,000 ha areunder cultivation, the Kenana SugarCompany is presently undergoing a $61mcapacity expansion programme. The aimis to increase sugar production to substi-tute for imports and generate foreign ex-change flows.

The Fund loan will help finance theproject’s core component, the boiler unit,which will furnish sufficient thermal andelectrical energy to increase cane-crushingcapacity to target levels. Output is conse-quently expected to expand by 50 per cent,from a current maximum of 300,000 tonsto some 450,000 t of refined white sugarannually.

This loan represents the OPEC Fund’sfirst private sector operation in the Sudan.Substantial assistance totaling $140m,however, has previously been directed tothe public sector in the form of loans:project loans went to benefit the energy,transportation and agricultural sectors, fourloans were extended for balance of pay-ments support and four others financedcommodity imports programmes.

The country has also benefited from alarge number of Fund grants directed at adiverse range of projects and programmes,from the construction of primary schoolsand rural water supply and sanitationschemes, to health care improvement,research studies and emergency assist-ance.

In addition, the Fund has helped theSudan cover its subscription to the Com-mon Fund for Commodities, the Amster-dam-based international organizationaimed at achieving stable conditions incommodity trade.

The agreement was signed in Khar-toum, the Sudan, by Osman Abdalla ElNazir, Managing Director of Kenana Sugar

Company Ltd, and by HE Dr Y SeyyidAbdulai, Director-General of the OPECFund.

No 5/2002Vienna, Austria, February 13, 2002

Fund approves $80,000grant in support oftraining workshops

The OPEC Fund for International Devel-opment has approved a grant of $80,000in support of a one-year programme, thePromotion of Modern Women Entrepre-neurship for Food Security and PovertyAlleviation in Rural Africa, sponsored bythe African Regional Centre for Technol-ogy (ARCT).

Under this scheme, a series of work-shops will be held in Dakar, Senegal, withthe aim to help develop the technical skillsof micro-, small- and medium enterprisesin the agro-food sector, particularly thoserun by women.

The workshops will provide trainingfor women in the area of modern foodprocessing; rural entrepreneurs on theconstruction and operation of bio-digestorsand the use of compost for horticulturalpurposes; enterprise managers and gov-ernment officials in the negotiation ofcontracts for the acquisition and transferof food technologies for rural micro-enter-prises; and a one-week study tour on thetechnical co-operation and entrepreneur-ship among developing countries in NorthAfrica, which will be attended by womenofficials and entrepreneurs.

ARCT was established in 1977 byAfrican heads of state and plenipotentiar-ies and became operational in 1980.Headquartered in Dakar, the Centre hasa current membership of 31 member states.

Its mandate is to strengthen the tech-nological capabilities of African countries,and become an efficient instrument forthe promotion and co-ordination of tech-nological policies and capacities at regional,national and international levels, espe-cially with regard to food, energy, capitalgoods and information technology devel-opment.

This is the third grant the OPEC Fund

has extended to ARCT. In 1994, $80,000was approved to help upgrade the Centre’straining facilities, and in 1997, a $100,000grant co-financed a training programmeon strengthening technical human resourceskills in sub-Saharan Africa.

No 6/2002Vienna, Austria. February 13, 2002

OPEC Fund supportsresearch project with$60,000 grant

The OPEC Fund for International Devel-opment has approved a grant of $60,000in support of a research project launchedby the Corsica-based DYNMED ResearchGroup. To be implemented within theframework of the European Union’sEuromed Heritage Programme, the initia-tive aims to increase the capacity of south-ern Mediterranean countries to upgrade,manage and promote their own tradi-tional resources through partnership withthe northern countries of the region.

Working together, research teams andlocal actors will first identify the particularskills and know-how that lend themselvesto promotion, and then develop them intoa series of pilot projects designed to en-courage development in the region.

Expected to run over a three-year period(2002-2004), the project will concentrateon traditional economic channels such asceramics, textiles, food processing andmetal and stoneworking. Other areas offocus include technology transfer, strength-ening the role of social agents, developingentrepreneurial and organizational capa-bilities and the endorsement of profes-sional training through seminars andworkshops.

DYNMED was established in 1992 asan interdisciplinary international networkof researchers, consisting of 22 researchgroups from 11 different countries, namely,Italy, France, Spain, Portugal, Greece,Tunisia, Algeria, Egypt, Palestine, Leba-non and Turkey, with Morocco and Syriashowing a keen interest in joining.

The OPEC Fund has made a previouscontribution of $15,000 to DYNMED insupport of an earlier research project.

February 2002 45

S E C R E T A R I A T N O T E S

Secretary General’s diary

The Oil, gas and electricity summit wasorganized by The Economist Conferencesfor Greece & Cyprus, and held in Athens,Greece, January 30–31, 2002.

The 2002 Annual meeting of the WorldEconomic Forum was held in New York,USA, January 31–February 4, 2002.

Secretariat missions

The 7th Mediterranean petroleum confer-ence & exhibition (MPC 2002) was organ-ized by the Tripoli-based InternationalEnergy Foundation, and held in Tripoli,Libya, January 15–17, 2002.

The Interim meeting of international oilorganizations (a continuation of the 4th

International meeting on oil statistics), wasorganized by the IEA/OECD, and held inLuxembourg, January 25, 2002.

The Sixth meeting of experts from energyexporting and importing countries was or-ganized by the IEA, and held in AbuDhabi, UAE, January 28–29, 2002.

Training courses entitled An introductionto futures & Energy futures workshop wereorganized by IPE Training, and held inLondon, UK, January 29–31, 2002.

OPEC Meetings

The 119th Meeting of the Conference will beheld at the OPEC Secretariat, Vienna,Austria, on March 15, 2002.

JanuaryNo 7/2002Vienna, Austria, February 13, 2002

OPEC Fund extends$99,000 for legaltraining seminars

The OPEC Fund for International Devel-opment has approved a grant of $99,000to help finance the attendance of legalprofessionals from developing countries attwo training courses to be held at theInternational Development Law Institute’s(IDLI) seat in Rome, Italy in 2002. Or-ganized by the IDLI, training will be di-rected towards the latest developments ininternational trade and business.

Proper legal expertise plays a vital rolein the development process, where projectfinancing, contracting and investmentinvolve complex negotiations and thedrafting of intricate agreements. How-ever, many developing countries fail toderive the full benefits of internationaltransactions as their representatives oftenlack the specialized legal skills to deal withthe technical issues that frequently arise.As a result, delays and excessive costs occurduring a project’s implementation, result-ing in many lost opportunities.

IDLI was established in March 1983as a non-governmental, international or-ganization and converted in 1991 to apublic international entity by an intergov-ernmental agreement formed by a numberof African, Asian, Northern, Latin Ameri-

can and European countries. IDLI held itsinaugural meeting at the OPEC Fund’sheadquarters in Vienna on March 18,1983. Its mandate is to promote the useof legal resources in the developmentprocess of developing and transitioneconomy countries. To this end, IDLIconducts training courses for legal profes-sionals and, since its inception, has trainedsome 9,600 individuals from 162 coun-tries.

The first course, on Enterprise andinvestment for lawyers, which will be heldin June–July 2002, is designed to assistlawyers and advisors to governments andbusiness communities in meeting the legalchallenges that arise from complex prob-lems associated with a country’s economicrestructuring and its transformation intoa market-oriented economy.

The course will also examine thespecial legal issues that are encounteredduring enterprise formation and opera-tion. A second two week seminar willbe conducted during September 16–27,2002. Legal and regulatory aspects ofe-commerce and public procurementswill examine regulatory and transactionalaspects of electronic commerce, drawingon a number of examples from existingmultilateral, regional and national initia-tives.

The OPEC Fund has been active infurthering the development of IDLI, andhas previously extended three grants toIDLI totaling $359,000 to sponsor theattendance of 50 participants from devel-oping countries at earlier seminars.

46 OPEC Bulletin

O P E C F U N D N E W S

For an in-depth lookat the oil marketand related issues

the OPEC Reviewcontains research papersby experts from across

the world

Now in its 25th annual volume, theOPEC Review is published quarterly.Its content covers the international oilmarket, energy generally, economicdevelopment and the environment.

Subscription enquiries to: BlackwellPublishers Journals, PO Box 805, 108Cowley Road, Oxford, OX4 1FH, UK.Free sample copies sent on request.

Energy economics and related issues

Vol. XXV, No. 4 December 2001

People wishing to submit a paper forpublication should contact the Editor-in-Chief of the OPEC Review, Farouk UMuhammed, at the Public Relations andInformation Department, OPEC Secre-tariat, Obere Donaustrasse 93, A-1020Vienna, Austria.

“The principal objective of the OPEC Review is tobroaden awareness of (energy and related) issues,enhancing scholarship in universities, researchinstitutes and other centres of learning.”

Recent issues

September 2001What have we learned from the experienceof low oil prices? — A.F. AlhajjiThe estimation of risk-premium implicitin oil prices — Jorge Barros LuísThe economics of an efficient relianceon biomass, carbon capture andcarbon sequestration in a Kyoto-styleemissions control environment — Gary W.YoheThe geopolitics of natural gas in Asia —Gawdat Bahgat

June 2001Has the accuracy of energy projections inOECD countries improved since the 1970s?— Jan Bentzen and Hans LinderothOil product consumption in OPECMember Countries: a comparison of trendsand structures — Atmane DahmaniOil and macroeconomic fluctuations inEcuador — François BoyeEnergy indicators — OPEC Secretariat

March 2001Estimating oil product demand in Indone-sia using a cointegrating error correctionmodel — Carol Dahl and Kurtubi

The gas dimension in the Iraqi oil industry— Thamir Abbas Ghadhban and SaadallahAl-FathiThe Russian coal industry in transition: alinear programming application — BoJonsson and Patrik SöderholmThe future of gaseous fuels in Hong Kong —Larry Chuen-ho Chow

December 2000Global energy outlook: an oil price scenarioanalysis — Shokri Ghanem, Rezki Lounnasand Garry BrennandThe hybrid permit cum price ceiling policyproposal: intuition from the prices versusquantities literature — Gary W YoheWorld oil reserves: problems in definitionand estimation — Ghazi M HaiderA vector autoregressive analysis of an oil-dependent emerging economy — Nigeria —

O Felix Ayadi, Amitava Chatterjee andC Pat ObiThe closure of European nuclear powerplants: a commercial opportunity for thegas-producing countries — Jean-PierrePauwels and Carine Swartenbroekx

September 2000Energy taxes and wages in a general equilib-rium model of production — Henry Thomp-sonResource windfalls: how to use them —Rögnvaldur HannessonEnergy consumption in the Islamic Repub-lic of Iran — A M Samsam Bakhtiari and FShahbudaghlouOil and non-oil sectors in the SaudiArabian economy — Masudul A Choudhuryand Mohammed A Al-Sahlawi

June 2000The case for conserving oil resources: thefundamentals of supply and demand —Douglas B ReynoldsVicissitudes in the Hong Kong oil market,1980–97 — Larry Chuen-ho ChowEconomic theory and nuclear energy —Ferdinand E BanksThe economic cost of low domestic prod-uct prices in OPEC Member Countries —Nadir Gürer and Jan Ban

March 2000Energy and interfactor substitution in Tur-key— Carol Dahl and Meftun ErdoganDomestic demand for petroleum in OPECcountries — Ujjayant Chakravorty,Fereidun Fesharaki and Shuoying ZhouCyclical asymmetry in energy consump-tion and intensity: the Japanese experience— Imad A MoosaBefore demand-side management is dis-carded, let’s see what pieces should bekept — Clark W Gellings

December 1999Energy in the Caspian Sea region in thelate 1990s: the end of the boom? — Chris-tian von Hirschhausen and Hella EngererHousehold energy demand in Kuwait: anintegrated two-level approach — M NagyEltony and Mohammad HajeehThe economics of the Nigerian liquefiednatural gas project — M Eghre-Ohgeneand O OmoleIncome determination in the GCC memberstates — Richard G Zind

Oil outlook to 2020

OPEC oil production and marketfundamentals: a causality relationship

Oil demand in North America:1980–2020

The price of natural gas

Adnan Shihab-Eldin,Rezki Lounnas andGarry Brennand

Atmane Dahmani andMahmoud H. Al-Osaimy

Salman Saif Ghouri

A.M. Samsam Bakhtiari

February 2002 47

A D V E R T I S I N G R A T E S & D A T A

Reach decision-makers through OPEC BulletinThe OPEC Bulletin is distributed on subscription and to a selected readership in the following fields: oil and gas industry; energyand economics ministries; press and media; consultancy, science and research; service and ancillary industries. Recipients includeOPEC Ministers, other top-level officials and decision-makers in government and business circles, together with policy advisersin key industrial organizations.

The magazine not only conveys the viewpoints of OPEC and its Member Countries but also promotes discussion and dialogueamong all interested parties in the industry. It regularly features articles by officials of the Secretariat and leading industry observers.Each issue includes a topical OPEC commentary, oil and product market reports, official statements, and the latest energy andnon-energy news from Member Countries and other developing countries.

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48 OPEC Bulletin

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