March 2002 1

Printed in Austria by Ueberreuter Print and Digimedia

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 part of a hydrocarbon installation in Algeria,which has just hosted the second meeting of the GasExporting Countries Forum (see Newsline beginning onpage 19). Photo courtesy Sonatrach.

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 YFocusing on fundamentalsMaking the right decision in today’s international oil marketsdemands a clear-headed analysis of many complex factors

4 F O R U MOPEC’s perspective on energy in Russia and EuropeBy Dr Alí Rodríguez Araque, OPEC Secretary General

7 P R E S S R E L E A S EOPEC and Russia in talks on 2Q market-stabilization measures

8 C O N F E R E N C E N O T E S119th OPEC Conference

15 M E D I A A W A R D SOPEC honours long-serving oil industry journalists at specialawards ceremony

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

29 E N V I R O N M E N T N O T E B O O KSeventh Session of the Conference of the Parties (COP7)

32 M A R K E T R E V I E WOil market monitoring report for February 2002

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

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

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

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

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

Indexed and abstracted in PAIS International

Vol XXXIII, No 3 ISSN 0474-6279 March 2002

2 OPEC Bulletin

N O T I C E B O A R D

Forthcoming eventsLisbon, Portugal, May 14–15, 2002,Lusophone oil & gas 2002: exploration oppor-tunities, development & energy investments. De-tails: Global Pacific & Partners. Tel: +27 11778 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.

Saudi Arabia, May 21–22, 2002, The EasternProvince’s Chamber of Commerce and Indus-try’s 50th Anniversary Oil and Gas Conference.Details: ITE Group Plc, 105 Salusbury Rd,London, NW6 6RG, UK, Tel: +44 (0)207596 5092/5225; fax: +44 (0)207 596 5111/5106; e-mail: tariq.mohammed@ite-exhibitions.com; Web site: www.ite-exhibitions.com.

London, May 21–24, 2002, course on Fun-damentals of petroleum refining processes. De-tails: ENSPM Formation Industrie, 232

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

avenue Napoleon Bonaparte, 92852 Rueil-Malmasion Cedex, France. Tel: +33 1 47 5261 63; fax: +33 1 47 52 70 41; e-mail:michael.howard@enspmfi.com; Web site:www.ifp.fr/enspmfi.

London, UK, May 23–24, 2002, Angola oil& gas summit. Details: The Bookings Depart-ment, IBC Conferences, Informa House, 30–32 Mortimer Street, London W1W 7RE,UK. Tel: +44 (0)1932 893851; fax: +44(0)1932 893893; e-mail: cust.serv@informa.com; Web site: www.ibcenergy.com/angola.

Singapore, May 23–24, 2002, and Doha,Qatar, May 27–28, 2002, International gassales contracts seminar. Details: The Confer-ence Connection, PO Box 1736, Singapore911758. Tel: -65 6226 5280; fax: -65 62264117; e-mail: info@cconnection.org.

London, UK, May 27–28, 2002, Iran EnergyForum. Details: CWC Associates, 3 TyersGate, London SE1 3HX, UK. Tel: +44 (0)207089 4200; fax: +44 (0)20 7089 4201; e-mail: bookings@ thecwcgroup.com; Web site:www.thecwcgroup.com.

Helsinki, Finnland, May 27–29, 2002, 9th

annual Central European gas conference. De-tails: www.alphatania.com; www.overview-gas.com.

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.

Houston, Tx, USA, May 30–31, 2002, 6th

annual Worldwide independents forum 2002.Details: Global Pacific & Partners. Tel: +2711 778 4360; fax: +27 11 880 3391; e-mail: info@glopac.com; Web site: www.petro21. com/events.

London, UKMay 2–3, 2001

Nigeria oil and gas 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

Kuwait appoints newActing Minister of Oil

Kuwait has appointed the country’s Min-ister of Infor-mation, HESheikh AhmadFahad Al-Ahmad Al-Sabah (pict-ured here), asActing Min-ister of Oil.The movefollows the

Kuwaiti government’s acceptance of theresignation of HE Dr Adel K Al-Sabeehin the wake of a recent explosion at agathering centre in Kuwait. Born in 1963,the new Acting Minister has a degree inpolitical science from the University ofKuwait, an Hon PhD in InternationalLaw from Dong-A University in SouthKorea and an Hon PhD from the USAcademy of Sports. He is also Chairmanof the National Council for Culture, Artsand Letters, and has held numerous high-level posts in the world of sport.

Montreux, Switzerland, June 3–5, 2002,Montreux Energy Roundtable XIII, Invest-ment in a world of uncertainty & volatility.Details: Richard McKenn, President,Montreux Energy, BIN SA, 11 Route deDrize, PO Box 1811, 1227 Geneva, Switzer-land. Tel: +41 22 827 2338; fax: +41 22 8272340; e-mail: richard@wat.ch; Web site: www.montreuxenergy.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.

Kuala Lumpur, Malaysia, June 9–11, 2002,Asia oil & gas conference. Details: The Con-ference Connection, PO Box 1736, Singa-pore 911758. Tel: -65 6226 5280; fax: -656226 4117; e-mail: info@cconnection.org;Web site: www.cconnection.org.

London, UK, June 17–19, 2002, Productionseparation systems. Details: The Bookings De-partment, IBC Conferences, Informa House,57–61 Mortimer Street, London W1N 8JX,UK. Tel: +44 (0)20 7637 4383; e-mail: cust.serv @informa. com; Web site: www.ibcenergy. com.

Moscow, Russia, June 25–26, 2002, MIOGE2002, 11th Moscow international oil & gasconference. Details: ITE Oil & Gas. Tel: +44(0)207 596 5233; fax: +44 (0)207 596 5106;e-mail: oilgas@ite-exhibitions.com; Web site:www.ite-exhibitions.com/og.

March 2002 3

C O M M E N T A R Y

Focusing on fundamentalsMaking the right decision in today’s international oil markets

demands a clear-headed analysis of many complex factors

E d i t o r i a l p o l i c yOPEC Bulletin is published by the Public

Relations & Information Department. The

contents do not necessarily reflect the official

views of OPEC or its Member Countries.

Names and boundaries on any maps should not

be regarded as authoritative. No responsibility

is taken for claims or contents of advertise-

ments. Editorial material may be freely repro-

duced (unless copyrighted), crediting OPEC

Bulletin as the source. A copy to the Editor-in-

Chief would be appreciated.

C o n t r i b u t o r sOPEC Bulletin welcomes original contribu-

tions on the technical, financial and environ-

mental aspects of all stages of the energy indus-

try, including letters for publication, research

reports and project descriptions with support-

ing illustrations and photographs.

E d i t o r i a l s t a f fEditor-in-Chief Farouk U Muhammed, mni

Editor Graham Patterson

Assistant Editor Philippa Webb

Production Diana Lavnick

Design Elfi Plakolm

Circulation Damir Ivankovic

A d v e r t i s e m e n t sOPEC Bulletin reaches the decision-makersin Member Countries. For details of its rea-sonable advertisement rates see the appropri-ate page at the end of the magazine. Ordersfrom Member Countries (and areas not listedbelow) should be sent directly to the Editor-in-Chief at the Secretariat address. Other-wise, orders should be placed through thefollowing Advertising Representatives:

North America: Donnelly & Associates,PO Box 851471, Richardson, Texas 75085-1471, USA. Tel: +1 972 437 9557; fax: +1 972437 9558.

Europe: G Arnold Teesing BV, Molenland32, 3994 TA Houten, The Netherlands. Tel:+31 30 6340660; fax: +31 30 6590690;e-mail: grim@terep.nl.

Middle East: Imprint International, Suite3, 16 Colinette Rd, Putney, London SW156QQ, UK. Tel: +44 (0)181 785 3775; fax:+44 (0)171 837 2764.

Southern Africa: International MediaReps, Pvt Bag X18, Bryanston, 2021 SouthAfrica. Tel: +2711 706 2820; fax: +2711 7062892.

The international oil markets, by theirvery nature, are highly complex anddifficult to predict. The number

and variety of interlinking factors that caninfluence price movements has become solarge that no-one can claim to have a com-plete overview of the market. Add to themixture the herd mentality of a largenumber of speculative traders willing tobuy or sell as the smallest nugget of seem-ingly insignificant information flashes ontotheir screens, and it is easy to understandwhy price movements are often exagger-ated, counter-intuitive or sometimes evenseem to defy all common sense. In an envi-ronment where the wrong decision (or theright decision made a moment too late) cancost a company many millions, no-onewants to risk being left out in the cold.

This is the reality that the OPEC Oiland Energy Ministers have to take into con-sideration whenever they meet to decide onthe production levels needed to achievemarket stability. Things were no differentwhen the Ministers gathered in Vienna inMarch for the 119th Meeting of the Con-ference — in fact, if anything, there wereeven more factors to analyze than usual. Afew months previously, OPEC and fivenon-OPEC oil-producing nations (Angola,Mexico, Norway, Oman and Russia) hadreached an understanding to co-ordinateoutput, reducing it by almost 2 million b/d,in the face of the global economic slowdown,which was only exacerbated by the eventsof September 11 last year.

By March this year, however, the pic-ture had changed somewhat. For one thing,US economic prospects were starting to lookbrighter than they had for quite some time.It is often said that if the US economysneezes, the rest of the world catches a cold.The converse also holds true to a large ex-tent — when the US economy picks up,the rest of the world starts to feel muchbetter. Some analysts therefore saw im-proved prospects for a recovery in oil de-mand, albeit a relatively modest one.Meanwhile, on the supply side, the increas-

ing tension in the Middle East caused fearsamong traders that supplies from the regionmight be disrupted, for whatever reason.

Thus, in the run-up to the OPEC Meet-ing in March, there were numerous voices— as there often are on such occasions —calling for the Organization to increase itsoil output. In addition, this time there wasalso considerable clamour on the domesticfront in the five non-OPEC nations thathad agreed in December to co-operate inorder to restabilize the market. Numerouscalls were heard for them not to extendtheir cuts into the second quarter of theyear. The pressure exerted from some quar-ters was intense.

Nonetheless, having chosen the path ofco-operation in order to achieve and main-tain a stable market in the final months oflast year, the non-OPEC producers com-mendably chose to stay firmly on that path,as dictated by fundamentals. Their deci-sion to continue with their production re-straint — in the face of increasingly stridentcalls for them not to do so — is one that isappreciated and applauded by OPEC. TheOrganization itself also refused to be swayed,but instead simply chose to do what it hasdone so often: to conduct a detailed andthorough analysis of the market, and tomake a prudent decision based on the con-clusions.

This ability to focus on fundamentalshas always been and continues to be one ofOPEC’s great strengths. Away from thehurly-burly of the international oil markets,calm reflection is possible and decisionsare made on a solid and sensible basis. Withthe world economic recovery still fragile,and the second quarter always one of slackoil demand, it would have been exceed-ingly risky, to say the least, to have releasedmore oil onto the market. The danger ofan oversupplied market and a subsequentprice slump would have been considerable.But by focusing on fundamentals — some-thing at which OPEC excels — such riskscan be minimized and market stabilitymaintained.

4 OPEC Bulletin

F O R U M

The Organization of the PetroleumExporting Countries is a groupingof eleven developing countries from

various regions around the world — theMiddle East, Africa, Latin America andAsia. Our Members not only have rich andvaried histories, but also represent a greatvariety of cultures, ethnicities, religionsand so on.

Nevertheless, they all have one thingin common: the defence of their legitimaterights to their main natural resource — oil;and the fact that their economies are heav-ily reliant on revenues from the sale ofcrude oil and natural gas.

This reliance is more than just a matterof economics: for our Members, it is quiteliterally a matter of survival. Hampered bywhat in many cases amount to single-product economies, they are uniquely vul-nerable to fluctuations in the oil price,especially a prolonged period of low oilprices, such as was witnessed in 1998 andearly 1999.

Recognizing the vital strategic impor-tance of oil — and oil being an exhaustiblenatural resource — the OPEC nationstherefore seek to stabilize its price on theinternational oil markets. The mechanismwhich they employ to do this is to regulatetheir output of crude oil, in order to strikea balance between supply and demand,and, given favourable market conditions,stabilize prices in a range of $22–28/bar-rel.

It is important to note that such mar-ket stabilization measures extend not onlyto restraining oil output when pricesthreaten to fall, but also to increasing itwhen prices are too high. OPEC is oftenportrayed in the media as irresponsibleand greedy, acting only in its own inter-ests.

The nature of the relationshipbetween major oil producers, suchas the OPEC nations and Russiaand the other republics of theformer Soviet Union, has beentransformed from one based onmutual mistrust to one based onmutual co-operation, writes OPECSecretary General, HE Dr AlíRodríguez Araque, in thisarticle.*

* Based on Dr Rodríguez Araque’s address tothe International Institute for the Fuel andEnergy Complex (MITEC) of the MoscowState Institute for International Relations(MGIMO), Moscow, Russia, on March 5,2002.

Yet often the same media will neglectto mention that during the year 2000,when price increases threatened to spiralout of control, the Organization boostedoutput on no less than four occasions in anattempt to moderate prices.

Notwithstanding this, the fact thatOPEC’s actions benefit not only produc-ers, but also consumers of oil, is increas-ingly recognized, and to a great extent isreflected in the fact that several oil-pro-ducing nations, which are not themselvesMembers of the Organization, have co-operated with us in recent years in regulat-ing their own oil output in order to helpstabilize prices. This happened in the springof 1999 and again at the end of last year,when a serious imbalance arose in the oilmarket.

Loss of confidenceThis imbalance was the result of an

excess of supply over demand in the oilmarket. The world economy was on ashaky footing even before the tragic eventsof September 11, and as the scale of theeconomic damage and loss in consumerconfidence which resulted from that terri-ble day became clearer, it was ever moreapparent that only dramatic cuts in worldoil output could prevent a price collapse,and that this burden could no longer becarried by the OPEC nations alone.

That was why OPEC, meeting in No-vember last year, agreed to cut a further 1.5million b/d of output on top of the 3.5mb/d it had already cut during 2001, butonly on the condition that non-OPECnations shared the burden and also madesubstantial cuts.

Happily, several non-OPEC nations— prominent among them Russia, andalso including Norway, Mexico, Oman

OPEC’s perspective on energyin Russia and Europe

March 2002 5

F O R U M

and Angola — understood the gravity ofthe situation and took the necessary ac-tion, contributing cuts amounting to morethan 460,000 b/d.

That was also the reason why I andsome of my distinguished colleagues,among them some of the OPEC Oil andEnergy Ministers, visited Moscow inMarch: to discuss the importance of con-tinuing co-operation between all oil pro-ducers in support of oil market stability.The current fragile state of the worldeconomy leaves us little margin for error inour efforts to maintain a balance betweensupply and demand, and it is thereforecrucial that all oil-producing nations — ofwhich Russia is one of the most important— co-ordinate their policies in order tomaintain a balance in the market.

Oil’s early historyOil first gained strategic importance in

the early years of the twentieth century. Itreplaced coal as the engine of industrialgrowth, and the rise of the automobile andair travel meant the world rapidly becamethirstier and thirstier for oil every day. Thegovernments of the industrialized nationsquickly realized they needed access to se-cure supplies of oil, both in peacetime andin the event of war.

Where to find this oil? The USA hadreserves of its own, but in Europe, the onlypossibilities were the Soviet Union (asit then was) and, to a lesser extent, Roma-nia (for at that time, oil explorationand production technology was not suffi-ciently advanced to make the North Sea anoption).

The European governments — acutelyconscious that any country which founditself short of oil would be economicallyhandicapped — therefore set about search-ing for sources of oil.

As it turned out, oil was to be found,principally in what we today call the devel-oping nations, above all in the MiddleEast, and where the European powerswere able to exert influence, if not colonialgovernance. Thus, countries such as theUK, the Netherlands, France and Italybecame involved in concessions in re-source-rich developing nations, backingtheir private companies or participating inthem as shareholders, or in some casesfounding and promoting state companies.The only exception to this rule was the

USA, which is the only major producingand consuming nation that has neverhad a public oil company. The USA did,however, strongly back its private compa-nies in their bid to get into the MiddleEast.

To cut a long story short, the vastmajority of the reserves that were foundwere in the Middle East. The eventualoutcome was a situation in which themajor international oil companies of Eu-rope and America — known at that time as

the ‘Seven Sisters’ — established whatamounted to effective control over the oilriches of many developing nations in theMiddle East, Latin America, Africa andAsia, including many of the nations thatwere later to form OPEC.

Control also meant, of course, that theindustrialized countries set the rules ac-cording to which the developing nationsshould be paid for their oil. Not surpris-ingly, the oil-exporting countries soon disa-greed, and claimed their right to use theone resource they had in abundance —crude oil — in order to further their eco-nomic development and meet the needs oftheir growing populations.

It was this situation, of course, thatgave rise to the birth of OPEC in 1960.Reacting to a cut in the price of crude bythe Seven Sisters that further reduced theirfiscal revenues from oil, five nations —Iran, Iraq, Kuwait, Saudi Arabia and Ven-ezuela — met in Baghdad in 1960, wherethey formed OPEC to defend their inter-ests.

The stage was thus set for what may bedescribed as a tug-of-war, part of the strug-gle not only for independence from theformer colonial masters, but for controlover the vast natural resources of thesenations.

Over the next decade, OPEC addedmore Members, eventually reaching a to-tal of 13. However, it was not until the1970s, when there was a wave of oil indus-try nationalizations throughout the devel-oping world, and the first significantadjustments in the oil price took place,that the Organization took its rightfulplace on the world stage.

In fact, the 1970s were something of amixed decade for OPEC. The Organiza-tion’s Members certainly succeeded in es-tablishing control over their own resourcesand in obtaining a fairer price for their oil,but this was accomplished only at the costof a great deal of hostility and mutualsuspicion between OPEC and the West.

It is a negative image that to someextent still dogs the Organization to thisday, even though we are working very hardto dispel some of the myths that surroundOPEC.

Era of partnershipIn any case, as far as the relationship

between OPEC, Russia and Europe isconcerned, I am glad to say that the era ofconfrontation and mutual suspicion of the1970s is gone. Today the relationshipbetween all of us can be considered as apartnership with many and varied aspects.It goes without saying that Europe as aregion consumes vast amounts of oil andgas. Of course, Russia is one of Europe’sprincipal suppliers, as indeed are Norwayand the UK — not forgetting, of course,the OPEC nations.

One might therefore think that therewould be fierce competition between thevarious parties. In fact, we believe that ifthe market is sensibly managed, there isroom for everybody. Nobody has to lose

‘It is crucial thatall oil-producingnations, of whichRussia is oneof the mostimportant,co-ordinate theirpolicies in orderto maintain abalance in themarket.’

6 OPEC Bulletin

F O R U M

out. In fact, if we can agree to maintain theco-operation that currently exists, we cancreate a win-win situation.

Notwithstanding the current weak-ness of the global economy, the long-termprospects for world economic growth, andhence for energy demand, remain good.

Despite the fruitfulness of the existingpartnership, there are some aspects of Eu-ropean energy policy which concern us.These include the exorbitant level of fueltaxation in many European countries, andvarious aspects of European energy legisla-tion, including the Energy Charter Treaty.These issues bear a closer examination.

Excessive fuel taxationEveryone in the industrialized world

is, to a greater or lesser extent, a consumerof oil and its products, and one of the mostimportant of these products is gasoline. Ofcourse, there are some parts of the worldwhere taxation levels on gasoline are notparticularly extreme.

Nevertheless, there are some countriesin Western Europe where around three-quarters of the pump price can be ac-counted for by tax! Yet OPEC is oftenblamed by Western politicians for highpetrol prices, as if the cost of crude, andnot taxation, were the main component ofthe final price of products.

Why should this concern OPEC? Forone thing, it is most unfair that the Or-ganization should be made a scapegoat forhigh prices, when it is really some govern-ments in the consuming countries that arecashing in.

For another, the justification oftenused by these governments, that this highlevel of taxation helps to discourage con-sumption of a so-called ‘dirty’ fuel sup-plied by ‘unreliable’ Third World nationsthat are vulnerable to supply disruptions,merely perpetuates an outdated and inac-curate image of the oil-producing devel-oping countries.

If excessive taxation of oil products isone aspect of energy legislation which

Soviet Republics that have significant hy-drocarbon reserves — and by extension,also for the OPEC Members — to usethose natural resources as a lever to en-hance their national development.

Optimism for the futureDespite the various concerns raised in

this article, we remain highly optimistic asregards the prospects for the future of therelationship between OPEC, Russia andthe nations of Europe. In our discussionsto date with the Russian government andsenior oil industry officials, we have allbeen able to agree on the need for oilmarket stability. We are therefore opti-mistic that there is great scope for thefurther development of this partnership.

Additionally, the Western Europeancountries that are currently supplying oilto Europe have limited reserves. North Seaoil production is expected to peak andthen begin a gradual decline in a few years.There will thus be a need for the oil and gasreserves of Russia, the Republics of theCommonwealth of Independent States(CIS) and the OPEC Members to bebrought to market in a way that does notdestabilize prices in international markets.

In other words, although Russia andOPEC might view each other as potentialcompetitors, there is no need for us to viewthe relationship as an adversarial one. Withthe agreement by Russia to restrain ex-ports in order to help stabilize the market,we have already taken significant stepstowards the development of a long-lastingand mutually beneficial partnership be-tween us.

We will therefore continue to makeevery effort to further develop this prom-ising partnership between Russia and theOPEC nations. If each side remains will-ing and able recognize the benefits of co-operation, and thus to act in a manner thatcontributes to stability in the internationaloil market, we see no reason why thispartnership cannot continue to becomean ever-more fruitful one.

‘OPEC andRussia havealready takensignificant stepstowards thedevelopment of along-lasting andmutuallybeneficialpartnership.’

concerns OPEC, another is the EnergyCharter Treaty. This lengthy document,which emerged from the collapse of theSoviet Union, aims to set out a legal frame-

work for Europe’s energy needs. However,it is noticeable that there are several aspectsof the Treaty which are worrying to OPEC.

For example, the Treaty seeks to en-sure that oil-producing nations cannotattach any conditions (or, to use the ap-propriate WTO jargon, trade-related in-vestment measures) to investment in theirenergy industries.

In other words, the energy-rich coun-tries cannot specify, as a condition of anycontract, that, for example, a certain per-centage of the work should be carried outby domestic firms, or that there should bea related transfer of technology, or enforceany other similar conditions.

Clearly, this makes it harder for na-tions such as Russia and the other former

P R E S S R E L E A S E

March 2002 7

No 1/2002Vienna, Austria, March 1, 2002

A top-level OPEC delegation is to begintwo days of talks on Monday (March 4)with their Russian counterparts on meas-ures to ensure stable and reasonable oilprices during the second quarter of thisyear.

OPEC President Dr Rilwanu Lukman,Secretary General Dr Alí Rodríguez Araqueand Director of Research Dr AdnanShihab-Eldin, will urge senior Govern-ment and energy officials, from the world’ssecond-largest oil-producing nation, toextend its policy of restricting crude oilexports into the second quarter. This willbe to maintain market stability, in view ofthe expected seasonal weakness in the nextthree months.

Late last year, Russia, along with someother leading non-OPEC producers, of-fered strong support for OPEC’s market-stabilizing initiatives, by agreeing to cut itscrude oil exports by 150,000 barrels/day,with effect from January 1.

However, Russia indicated that its de-cision covered only the first quarter of2002, but that it would review prevailingmarket conditions before deciding whetherto extend export restrictions to the middleof the year.

“We welcome the contribution thatRussia and other non-OPEC producersare making towards stabilising oil prices,”Shihab-Eldin said recently. “This is ex-actly the kind of co-operation we in OPEC

are attempting to foster.” He maintainedthat the welfare of the international oilmarket was the responsibility of all pro-ducers.

During the talks, OPEC will review,with Russia, its oil market outlook, espe-cially the supply and demand balance, andwill seek to ascertain what action Russiaplans to take during the second quarter.

“It is imperative that the cuts already inplace are continued into this period, toensure that a concrete floor remains firmlyunder prices ahead of the summer months,”Shihab-Eldin added.

Earlier this week (February 27), Con-ference President Lukman welcomed adecision by the Government of anotherleading non OPEC producer, Norway, tocarry over its first-quarter commitment tocut output by 150,000 b/d to the secondquarter.

“In taking this action, “he said, “Nor-way will be greatly supporting OPEC’sefforts to balance global supply and de-mand, which is necessary for stabilisingcrude oil prices.”

If other leading non-OPEC producersfollowed Norway’s example, “a concertedand coordinated effort can be sustained inthe market, at least for the first half of thisyear,” Lukman added.

There is, however, a growing consen-sus among forecasters that the worldeconomy will begin to recover in the sec-ond half of this year, increasing the call onoil and triggering a rebound in prices.

“Co-operation is necessary to main-tain stability in the market until well into

2003, by which time sufficient demandmay have developed to allow both OPECand non- OPEC producers to relax reduc-tions,” says Secretary General RodríguezAraque.

Other visits to Moscow are planned bysenior officials from OPEC Members Al-geria and Venezuela, in the build-up to theforthcoming Meeting of the OPEC Con-ference, which begins on March 15 inVienna, Austria.

Background informationOPEC reduced production by a total

of 3.5 million b/d last year, in a bid tostabilise the oil market, which was thenthrown into turmoil by the events of 11September.

Within a month, the price of OPEC’sReference Basket had fallen by around$5/b from the near-$25/b average of thefirst eight months of 2001; further falls inthe ensuing weeks took the price brieflybelow $17/b.

OPEC’s Conference in mid-Novem-ber agreed to cut output by an additional1.5m b/d for six months from January 12002 — making a total reduction of 5mb/d — but only if non-OPEC respondedwith a commitment to a total cut of ten percent of that figure. When non-OPEC fi-nally made such a commitment, to thetune of 462,000 b/d, OPEC implementedits new agreement.

This eased the pressure on prices. Sofar this year, the Basket price has averagedaround $18.5/b, well above the averagesfor November and December.

OPEC and Russia in talks on second-quartermarket-stabilization measures

P R E S S R E L E A S E

8 OPEC Bulletin

C O N F E R E N C E N O T E SC O N F E R E N C E N O T E S

119th Meeting of the ConferenceMarch 15, 2002, Vienna, Austria

No 2/2002Vienna, Austria, March 15, 2002

Opening address to the119th Meeting of the OPEC Conference

by HE Dr Rilwanu LukmanPresident of the Conference, and

Presidential Adviser on Petroleumand Energy, Nigeria

Welcome to the 119th Meeting of theOPEC Conference, which is held, onceagain, at our Secretariat in Vienna. Onbehalf of Your Excellencies, I should liketo extend a special welcome to HE SheikhAhmad Fahad Al-Ahmad Al-Sabah, theActing Minister of Oil for Kuwait, who isattending this Conference for the firsttime, as Head of his country’s Delegation.We look forward to his involvement in our

discussions at this and other OPEC Meet-ings. We should also like to express ourthanks to his predecessor, HE Dr Adel KAl-Sabeeh, and to wish him every successin the future.

“A week is a long time in politics,” afamous statesman once remarked. Howappropriate such a statement would havebeen in today’s international oil market! Ifthis Meeting of the Conference had beenheld, let us say, three weeks ago, it wouldhave had a very different complexion toit. At that time, as we were approachingthe end of a generally mild Northern Hemi-sphere winter, there were widespread fearsabout the already weak oil price structurecoming under further sustained pressurefrom the predicted traditional downturnin the second-quarter oil demand. Prices,after all, had already fallen by around

$6–7/barrel since the tragic events ofSeptember 11.

But now, as we stand on the thresholdof the second quarter, we find ourselves ina situation where there are grounds forcautious optimism, with regard to the mar-ket’s near-term outlook. Prices have ral-lied over the past fortnight, with OPEC’sReference Basket of seven crudes pushingpast the psychological $20/b mark on Feb-ruary 28 for the first time since the secondweek of October — that is a period of fourand a half months. They have since goneon to penetrate the lower limit of OPEC’sprice band, of $22–28/b. Why has thishappened?

The first reason is the high level ofcompliance by our Member Countrieswith the decision we reached at the end oflast year, to reduce our output by an addi-

Below: The Delegations pictured just before the start of the Conference.

March 2002 9

C O N F E R E N C E N O T E S

tional 1.5 million barrels a day, with effectfrom January 1. Taken together with ear-lier OPEC agreements, this meant an over-all reduction of 5m b/d over the 11-monthperiod beginning on February 1, 2001.The purpose of these measures was to

prevent a damaging downward spiral inthe oil price. Let us not forget, at this point,that OPEC has been prepared to act inboth directions, in order to bring about astable oil market, with fair and reasonableprices. In the year 2000, when there was

Above: See here together are (l-r) the United Arab Emirates’ Minister of Petroleum and MineralResources, HE Obaid bin Saif Al-Nasseri; Libya’s Secretary of the People’s Committee of the NOC, HEDr Abdulhafid Mahmoud Zlitni; Saudi Arabia’s Minister of Petroleum and Mineral Resources, HEAli I Naimi; and Nigeria’s Presidential Adviser on Petroleum & Energy and President of theConference, HE Dr Rilwanu Lukman.

Below: Iran’s Minister of Petroleum, HEBijan Namdar Zangeneh (l) and Qatar’sMinister of Energy and Industry, HEAbdullah bin Hamad Al Attiyah (r).

Below: It’s all smiles for OPEC Secretary General, HE Dr Alí Rodríguez Araque (r); Nigeria’sPresidential Adviser on Petroleum & Energy and President of the Conference, HE DrRilwanu Lukman (c); and the Chairman of the Board of Governors, HE Suleiman Jasir Al-Herbish of Saudi Arabia (l).

excessive upward pressure on the price,OPEC increased output on four occa-sions, by a total of 3.7m b/d, to bringprices down to reasonable levels, withinour price band. Our actions were effectivethen, just as they have been effective nowin the opposite situation.

The second reason for the brighterprospects for oil prices has been the sup-port our actions have received from manyleading non-OPEC oil producers. Theagreement reached in Cairo in December,for an overall production/export cut of462,500 b/d by non-OPEC producers, insupport of OPEC’s cumulative 5m b/doutput reduction, had an immediate effecton prices; it prevented further falls andprovided a base from which prices couldstrengthen as the economic outlookimproved. The average monthly priceof OPEC’s Basket rose from around$17.5/b in both November and Decem-ber to $18.3/b in January and $18.9/b inFebruary.

Even so, as is well known, seasonalfactors lead to a drop in demand in thesecond quarter of every year. If the majorproducers do not maintain the presentlevel of output, when stocks are still highand many smaller producers are increasingtheir activities, the market could again be

10 OPEC Bulletin

C O N F E R E N C E N O T E S

flooded with crude and the impact onprices might, once more, be negative.This is why OPEC has been calling fornon-OPEC producers to maintain theirsupport until June. The recently ex-pressed willingness of these producersto do this is already sending a favour-able signal to the market. This has beengreatly welcomed by our Organization.It is, indeed, with much pleasure thatwe greet distinguished officials from sixnon-OPEC oil-producing nations, whoare here as observers. They come fromAngola, Egypt, Mexico, Oman, Russiaand Syria.

At the same time as this is happen-ing, there are new, encouraging signsabout the global economic recovery.There has, for some time, been a con-sensus among forecasters that the worldeconomy will begin to recover in thesecond half of this year, increasing thecall on oil and triggering a rebound inprices. But this may, in fact, be happen-ing earlier than expected. Recent com-ments by the United States’ FederalReserve Chairman, Alan Greenspan,that a US economic recovery was “wellunder way”, together with the release ofencouraging employment figures, havegenerated a new optimism in the eco-nomic outlook that extends beyond theborders of the world’s leading industr-ialised nation. However, it is early daysyet; the messages about the global eco-nomic outlook are still, to some extent,ambiguous and should, therefore, betreated with caution.

Let me say at this point that OPECis greatly concerned about current in-

Left: Venezuela’s Minister of Energy andMines, HE Alvaro Silva Calderón (l),listens to the country’s OPEC Governor,Dr Gloria Mirt Hernández (r).

Below: Indonesia’s Minister of Energyand Mineral Resources, HE Dr PurnomoYusgiantoro (seated r), speaks to the press.

Bottom of page: The Head of the EgyptianDelegation, HE Sameh Shoukry (c), ad-dress the Conference. He is flanked by theHeads of Delegation of Angola, HE JoseMara Botelho de Vasconcelos (l) andMexico, HE Ing Juan Antonio Bargés (r).

March 2002 11

C O N F E R E N C E N O T E S

ternational tensions, particularly in theMiddle East. We hope that there can bepeaceful, timely resolutions of all the con-flicts that are affecting the lives of vastnumbers of people in this troubled period.Such conflicts threaten to destabilise theglobal economy just at the time when itsgeneral outlook is improving. They mayalso distort realities in the markets. In thespecific context of the international oilmarket, therefore, let me make the follow-ing point quite clear — OPEC remainscommitted to steady, secure supplies of oilat all times, with prices that balance theinterests of producers and consumers.

What prices are we talking about? Letus turn the clock back to January–Augustlast year, when the average price of OPEC’sBasket was almost $25/b, which was rightin the middle of our price band. Indeed,the monthly average price stayed within anarrow range of $23.7/b and $26.3/bthroughout that eight-month period. Inother words, we had prices which wereboth sustainable over a long period andacceptable to the market at large. And thencame the shock of September 11, whichhad a highly disruptive impact throughoutthe global economy. Within a fortnight ofthat fateful day, the Basket had fallen by$5/b; it then lost another $2/b in the

following weeks. A further spiralling down-wards was only prevented by effective andtimely OPEC action, supported by non-OPEC. Much of the economic effect ofSeptember 11 appears to have worked itsway through the system; yet oil prices arestill well below the levels that were main-tained over the eight-month period priorto those tragic events in the USA. There-fore, there is every reason to believe thatprices will continue to strengthen in thecoming weeks and months, as they ap-proach longer-term sustainable and widelyacceptable levels.

All in all, therefore, as we begin today’s

Left: The Head of the Omani Delegation, HESalim Mohammed Al-Riyami (seated l), listens tohis Syrian counterpart, HE Dr Ibrahim Haddad(next to him), address the gathering.

Below: The Head of the Russian Delegation, HEOleg G Gordeev (nearest camera), addresses theopening of the Conference.

12 OPEC Bulletin

C O N F E R E N C E N O T E S

Meeting of the Conference, we are cau-tiously optimistic about the near-termoutlook for the international oil market.The very purpose of our gathering is toensure that we gain a thorough insight intocurrent developments. As usual, we arewell-supported in our endeavours by theresearch carried out by the Secretariat sinceour last Conference. We must, therefore,ensure that we reach decisions which willenable the market to function in a healthyequilibrium in the coming months,balancing the requirements of producersand consumers in a fair and reasonablemanner.

In this regard, we shall continue tocount on the support and cooperation ofour non-OPEC partners, since this is ulti-mately to the mutual benefit of all produc-ers, without exception.

No 3/2002Vienna, Austria, March 15, 2002

119th Meeting of theOPEC Conference

The 119th Meeting of the Conference ofthe Organization of the Petroleum Ex-porting Countries (OPEC) convened inVienna, Austria, on March 15, 2002, un-der the Chairmanship of its President, HEDr Rilwanu Lukman, Presidential Ad-viser on Petroleum & Energy of Nigeriaand Head of its Delegation.

The Conference extended a warm wel-come to HE Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, , , , , Acting Minister of Oilof the State of Kuwait, and to all otherHeads of Delegation.

The Conference welcomed high-levelrepresentatives from Angola, the Arab Re-public of Egypt, Mexico, the Sultanate ofOman, the Syrian Arab Republic, and theRussian Federation, whose presence at theMeeting is seen as confirmation of theirsolidarity with the objectives of the Or-ganization to stabilize the market.

The Conference renewed the expres-sion of its appreciation of the pledgesmade by Angola, Mexico, Norway, Omanand the Russian Federation and re-cognized their contribution made so far tothe Organization’s efforts to stabilize themarket.

The Conference reviewed the Secre-

March 2002 13

C O N F E R E N C E N O T E S

tary General’s report, the report of theEconomic Commission Board, the reportof the Ministerial Monitoring Sub-Com-mittee (MMSC), and various administra-tive matters.

The Conference also reviewed the cur-rent market situation and its immediateprospects, and noted the encouraging signsof world economic recovery and its effecton the oil market. The Conference furthernoted the positive market consequences ofthe actions taken by OPEC and non-OPEC producers to bring about stabilityto the market.

In view of the uncertainties and theseasonal, low demand in the second quar-ter, Member Countries strongly empha-sized their firm commitment to theirAgreements of November and December2001, until June 30, 2002, and expressedcommitment to continue maintaining fullcompliance. They further urged non-OPEC producers/exporters to continue toco-operate in efforts to maintain marketstability.

The Conference agreed that marketconditions should continue to be closelymonitored and decided to hold an Ex-traordinary Meeting of the Conference inVienna, Austria, on Wednesday, June 26,2002, in order to review the situation.

The Conference expressed its appre-ciation to the Government of the FederalRepublic of Austria and the authorities ofthe City of Vienna for their warm hospital-ity and the excellent arrangements madefor the Meeting.

Top left: The Chairman of the Board of Gover-nors, HE Suleiman Jasir Al-Herbish of SaudiArabia (l), in discussions with the Head of theIraqi Delegation, HE Taha H Mosa (c) and thecountry’s OPEC Governor, Dr Mussab H Al-Dujayli (r).

Centre left: Nigeria’s Ambassador to Austria, HEAbdulkadir Bin Rimdap (l), is seen here with thecountry’s ECB Representative, Mohammed SBarkindo.

Bottom left: Qatar’s Minister of Energy andIndustry, HE Abdullah bin Hamad Al Attiyah(l), talks to Kuwait’s Acting Minister of Oil andMinister of Information, HE Sheikh AhmadFahad Al-Ahmad Al-Sabah (r).

Above: The Head of OPEC’s Energy StudiesDepartment, Dr Rezki Lounnas (l), makes apoint to Algeria’s Minister of Energy & Mines,HE Dr Chakib Khelil (r).

Below: The Head of OPEC’s PR & InformationDepartment, Farouk U Muhammed mni (r),reads the communiqué at the closing press confer-ence. Also pictured are Dr Rodríguez Araque (c),Dr Lukman (second r), the Director of OPEC’sResearch Division, Dr Adnan Shihab-Eldin (l),and the Head of the Secretary General’s Office,Karin Chacin (second l).

C O N F E R E N C E N O T E S

14 OPEC Bulletin

Left: Dr Rodríguez Araque (nearestcamera), answers a journalist’s question asDr Lukman (c) and Mr Muhammed (r)listen.

Below: The press room was packed as usual.

The Conference passed Resolutionsthat will be published on April 15,2002, after ratification by MemberCountries.

The next Ordinary Meeting of theConference will be convened in Vi-enna, Austria, on Wednesday, Septem-ber 18, 2002.

M E D I A A W A R D S

March 2002 15

Opening remarks byFarouk U Muhammed, mni

Head, PR & Information Department

Excellencies, distinguished media col-leagues, ladies and gentlemen, thank youall so much for being here with us thisevening. As our Media Relations Officer,Dr Abdulrahman Al-Kheraigi, said ear-lier, good things take time to materialize.We are here this evening, ladies and gen-tlemen, to recognize and appreciate pro-fessional excellence. When the idea of thefirst ever OPEC long service awards forjournalists covering the Organization wasmooted, the Public Relations and Infor-mation Department packaged and sent itsrecommendation to the Secretary Gen-eral, who graciously approved. Prepara-tions got under way, and that is why we arehere.

Twenty-five years of continuous OPECcoverage was the criteria used by the or-

ganizing committee in selecting the jour-nalists for the award. A total of eightveterans were so chosen. But of course, weappreciate the professional and dedicatedservice that that has been and is beingprovided by our other colleagues who havebeen reporting on OPEC for many years.We appreciate that it is not easy for ourcolleagues to go through the daily activitiesof reporting on OPEC in particular, andthe energy sector in general. Believe me, Iknow what I am talking about when I sayreporters and editors are always striving tomeet deadlines, sometimes, extremely tightdeadlines.

I have gone through these rigours my-self. As Deputy Editor of the Daily Times,Nigeria’s 75-year-old newspaper (pub-lished since June 1, 1926) I remember thetype of deadline pressures that I endured.And when I became Editor of the DailyTimes, I of course exerted tremendousdeadline pressure on my reporters, subs,

and so on through the production process.Always struggling to beat deadlines is neveran easy task for journalists. Thus, we wel-come and salute you, and we greatly appre-ciate what you have been doingprofessionally for OPEC and the oil in-dustry.

I urge you, dear colleagues, to alwaysbear in mind and to keep in focus, thatbasic tenet of our profession, which in-cludes objectivity, courage, fairness, and ofcourse, factual reporting. Once again, thankyou and have a very pleasant evening.

Address byHE Dr Alí Rodríguez Araque,

Secretary General, OPEC

It is my pleasure and honour to welcomeyou all to this first ever OPEC awardsceremony for those veteran journalists whohave been covering the activities of ourOrganization for the past 25 years, whichwas the period that the organizing com-mittee established as the cut-off point.

As we recognize the 25 veteran jour-nalists who have given OPEC such meri-torious coverage, so also do we salute theircolleagues who have reported our activitiesto the world, for the past 20, 15 and 10years or less.

In a way, I can say that there is acommonality of interest between OPECand our journalist friends. While OPECpursues its cardinal objective of stabilizingthe oil market, the oil trade press, of whichyou are the core representatives, maintainsa constant focus on our activities as well asthe market itself.

Thus, it would be proper to say thatboth OPEC and yourselves have beenmarching on for four decades now, eachcarrying out his responsibilities regardingthe same subject, that is, the oil market.

The Head of OPEC’s PR & Information Department, Farouk U Muhammed, mni, opens the awardsceremony. Seated are the Secretary General, HE Dr Alí Rodríguez Araque (second r) and the Presidentof the Conference and Nigeria’s Presidential Adviser on Petroleum & Energy, HE Dr Rilwanu Lukman(r), while looking on is OPEC’s Media Relations Officer, Dr Abdulrahman Al-Kheraigi (l).

M E D I A A W A R D S

OPEC honours long-serving oil industryjournalists at special awards ceremony

Hotel Intercontinental, Vienna, March 16, 2002

M E D I A A W A R D S

16 OPEC Bulletin

Indeed, your tasks are both mentallyand physically taxing. Within the contextof healthy competition, you always striveto achieve speed and accuracy, in order tobeat your respective deadlines. Certainly,this is not an easy task.

We admire and appreciate your dedi-cation to duty as you analyse, interpret andreport on OPEC and, indeed, the energyindustry to millions of your readers andaudiences around the world.

I wish to once again emphasize that mydoors have been and will always remainwide open for any of our journalist friendswho wishes to seek clarification on anyissue regarding OPEC’s activities.

On behalf of the OPEC MinisterialConference, our Board of Governors, theEconomic Commission Board, as well asthe staff of the Secretariat, I congratulateour veteran journalist friends for receivingthe OPEC award in recognition of theirexcellent professional service. You haveindeed done your profession proud.

I also extend the same sentiments toour other journalist friends, and say, keepup the superb coverage. I am confidentthat you all shall always strive to make yourcoverage of OPEC activities on the basis offacts, balance and fairness. Thank you andenjoy the evening.

Address byHE Dr Rilwanu Lukman,

President of the Conference,Nigerian Presidential Adviser

on Petroleum and Energy

It is indeed a great privilege for me to havebeen asked to address this wonderful gath-ering, and I would like to add my ownwarm welcome to that of the SecretaryGeneral to our friends from the mediawho are here tonight.

We are very happy that OPEC hasbeen able to design this occasion for thosemembers of the media who have, over along period of time, devoted their energiesand resources to reporting faithfully onOPEC, in relation to the world energyscene.

Your job is not an easy one — to reportwhat is happening in the energy arenawith honesty, dedication and persever-ance, especially when you are expected toreport accurately and give a true picture of

what is happening to the whole interna-tional community, who are always waitingeagerly to hear from you.

We are extremely grateful to you for allyour efforts, and I am very fortunate tohave been connected with you. I was firstthrown into the deep end of OPEC affairsin 1986, and I can see here tonight quite afew of those people who I first met atOPEC Conferences both here and in Ge-neva, and I believe that you are easilyamong the very best in your profession.

What we are doing tonight is a smalltoken of our appreciation for the excellentwork which you have done, and we wantyou to accept it in that spirit. We hope andpray that you will continue to help us and

work with us with the same sense of zeal,dedication and honesty that you have ex-hibited in the past. We will continue tohonour and value your contributions. Wethank you very much for coming thisevening and I wish you many more years ofsuccessful professional reporting.

Response on behalfof the journalists by

Ian Seymour,Editor Emeritus,

Middle East Economic Survey

I am not quite sure why I was given thehonour of being asked to say a few wordsin conclusion, but I can only conclude thatthe reason may be that I have been aroundso long that I have become part of thefurniture.

First, I would like to say that you toOPEC on behalf of myself and my fellowlong-serving journalists for these awards.To my mind, these awards constitute amost gracious, thoughtful and friendlygesture on the part of OPEC.

I would like to say how happy I am tosee so many of my old-time comradesassembled here: Journalists like Jim Tan-ner, Ken Miller, Peter Bild, BhushanBahree, Randa Takieddine, and my verygood friend and colleague, WalidKhadduri. We all share many good memo-ries together.

I also see many distinguished Oil Min-isters and OPEC officials, with whom we

Dr Alí Rodríguez Araque (seated) looks onas Dr Lukman addresses the gathering.

Ian Seymour, Editor Emeritus ofthe Middle East Economic

Survey, responds on behalf of thelong-serving journalists.

M E D I A A W A R D S

March 2002 17

journalists have participated in a greatmany memorable events. I would like towelcome them and thank them for partici-pating in this award ceremony. This isbecause one notices over the years a strongrelationship, which is borne between jour-nalists and those who actually participateand lead OPEC decision-making.

There have been many stages in OPEChistory, and it crossed my mind when I wasa very young beginner back in the 1960s.We talk now about the price of the oilbarrel going up and down by so manydollars, and so many billions of dollars ofgovernment revenue being lost.

It is difficult to remember how in thosedays, most of the first 10 years of OPEC’sexistence were spent in hard bargaining

with the oil companies over a cent or two,or even sometimes half a cent per barrel ingovernment revenues.

Then things changed. The big bang ofthe first OPEC oil price explosion was in1973. And then in 1973-74, the OPECprice rises were somehow conflated withthe other big event at the time, that is, theoil measures taken for political reasons bysome (not by OPEC as an Organization)Arab Oil Ministers following the 1973Arab-Israeli war. Somehow, these eventsconflated in the public mind, althoughactually OPEC did not have anything todo with the oil measures as such.

Then, of course, the second oil priceexplosion following the Iranian Revolu-tion, was compounded by the outbreak of

the Iran/Iraq hostilities. Then there wasthe price crash of 1986, and then theefforts to rehabilitate the price, which weresuccessful. Then came the Iraq/Kuwaitconflict and the Gulf War of 1991.

All these huge events on the worldstage had something to do with OPECand, of course, over the years, the numberof media, all sorts of media coverage, in-creased exponentially. So it really becamea very big event on the journalists’ cover-age map.

I would like to tell you a quick story.Let me take your minds back to a very coldDecember morning, 26 years ago, in 1975.The OPEC Oil Ministers were at work atthe OPEC Secretariat, which at that time,was in a different building in Dr KarlLueger Ring, opposite the Town Hall.

I had been taking advantage of this justto hop around town. I hopped into one ofthe major museums and when I came outof there, it was very cold. I did not see anypoint going to the OPEC Secretariat, freez-ing outside and waiting for the Ministersto come out, so I went back to the Inter-continental Hotel where most of the Min-isters were staying in order to wait.

I sat in the restaurant, but there was aparticular table that had a beautiful view soI could see the Ministers as they comeback. I settled down and had a nice lunch,but then I noticed time was going by —1:30 pm, 2 pm, and it got to 2:30 pm andthere was still no sign of anyone. I thoughtthis was very odd. I was the only personeating in the restaurant, and there wasnobody else in the lobby either.

Suddenly I saw somebody I recog-nized, a fellow journalist running downthe corridor, so I asked him what wasgoing on. He turned round and looked atme and said: “The Oil Ministers are beingheld hostage!”

I certainly did not believe him. How-ever, it did not take me long to realize thatit was true, and that in fact, my office wastrying to get hold of me for the latest newsthat had been broadcast around the world,and obviously, I was the last one to hearabout it.

The moral of the story is that, for ajournalist, however well placed you are, onthe right spot at the right time, you couldstill be the last to hear about one of thebiggest news stories. That is my story ofhow I missed that scoop.

The assembled journalists all have many years’ experience of covering OPEC.

The audience, which included the Heads of Delegation of Saudi Arabia and Iraq, show theirappreciation for the journalists’ efforts.

N E W S L I N E

March 2002 19

N E W S L I N E

lgiers — The second ministerial-level meeting of the Gas Export-ing Countries Forum (GECF) was

hosted in the Algerian capital last month.The GECF’s first meeting was held inTehran last year.

Thirteen countries attended the Al-giers event, including OPEC MembersAlgeria, Indonesia, Iran, Libya, Nigeria,Qatar and Venezuela. The non-OPECnations in attendance were Bolivia, Bru-nei, Egypt, Malaysia, Oman and Russia.

Addressing the opening of the GECFgathering, Algerian President AbdelazizBouteflika called for a greater level of co-operation between gas producers andconsumers, which he said was vital for thestability of the gas market.

He stressed that the meetings of theGECF were open to any interested coun-try wishing to taking part, including gas-consuming nations.

The Algerian President went on to saythat the amount of capital required toexpand gas production capability to meetfuture demand growth was so huge that itcould not be met by the producing na-tions alone.

He added that it was regrettable thatthe European Union Gas Directive wasconceived without consultations with gassuppliers, and noted that this developmenthad greatly affected the level of investmentin the gas sector.

“The lack of transparency and thedoubts that (surround) the Directive donot favour the development of new gasprojects,” he said.

Algerian Energy and Mines Minister,Dr Chakib Khelil, noted that the gas ex-porters were not projecting the formationof an organization similar to OPEC.

Instead, the Algiers meeting was de-signed solely to bring together the maingas-exporting countries from Africa, theMiddle East, Latin America, and Asia.

In this way, delegates could discuss co-operation opportunities, joint projects inthe gas sector, and exchange views on theproblems they were experiencing.

Gas, he said, was a source of energy

Algeria hosts second meeting ofGas Exporting Countries Forum,

attended by seven OPEC Membersthat was becoming more and more impor-tant in the global energy sector, and it wastherefore necessary to ensure an adequateframework for its development.

The Iranian Minister of Petroleum,Bijan Namdar Zangeneh, presented a re-port to the meeting, in which he notedthat the GECF countries had 73.2 per centof world gas reserves and just over 63 percent of world gas exports.

This reflected the increasing impor-tance of gas as a fuel in international energymarkets, as well as the significance of theGECF, he said.

He outlined the main challenges fac-ing the world gas sector as being globali-zation, liberalization and privatization; therestructuring of the sector through merg-ers, and the rapid pace of technologicalchange.

The meeting ended with the adoptionof a series of decisions, one of which wasthat Algeria would host two further ex-perts meetings during the course of thisyear, with various studies to be undertakenby Algeria, Iran and Qatar.

The third ministerial-level gathering ofthe GECF will take place in the Qataricapital Doha in early 2003, it was alsodecided.

TotalFinaElf to begincrude production atNigeria’s Amenam fieldAbuja — France’s TotalFinaElf will com-mence crude oil production from its Ni-gerian Amenam/Kpono oil field early nextyear, according to a company official.

The Amenam/Kpono project is one ofthe largest development schemes in theworld today in the traditional shallowwater environment.

The firm’s General Manager for Pub-lic Affairs, John Addeh, said that the fieldhad crude oil reserves of about 500 mil-lion barrels, with a target production ca-pacity of 125,000 barrels/day.

In line with the firm’s policy of pro-

moting local content in Nigeria, the tech-nologically sophisticated Amenam/Kponowell head, jackets and bridges were allfabricated at the project site, noted Addeh.

TotalFinaElf ’s partners in theAmenam/Kpono project are the NigerianNational Petroleum Corporation and USmajor ExxonMobil.

Addeh also said that TotalFinaElfwould soon commence work at the Akpofield, discovered in the deep waters off-shore Nigeria, where production was ex-pected to come onstream in 2006.

Commenting on the upcoming Off-shore West Africa conference in the Nige-rian capital Abuja, Addeh noted thatTotalFinaElf would feature strongly in theconference, where it would share its var-ied expertise in applied science and tech-nology in a number of papers.

The company would sponsor six aca-demics from Nigerian universities to par-ticipate at the conference, aimed at pro-moting excellence in offshore activities.

TotalFinaElf would mount a separateexhibition during the conference to show-case the group’s technical excellence invarious aspects of the oil industry.

Saudi Arabia’s naturalgas projects still oncourse, says NaimiRiyadh — Saudi Arabia and several in-ternational oil majors are in talks to bridgethe gap in negotiations over the country’smulti-billion dollar natural gas projects,local media reported last month.

Saudi Arabian Petroleum and MineralResources Minister, Ali I Naimi, told theArab News that most of the informationpublished about a dispute was baseless.

“But in the negotiations, there arepositions, not differences, and negotiatorsare trying to bridge the gap. Negotiationsare progressing. We are looking forwardto signing the executive agreement,” hesaid.

The Kingdom signed a preliminaryagreement in June last year with eightforeign firms to develop three gas fieldsrequiring investments of more than $20bnin what is known as the Saudi gas initiative.

A final agreement was due to be signedby mid-December, but the two sides de-

A

N E W S L I N E

20 OPEC Bulletin

to rebuild the country’s oil sector after aserious accident.

This included the Oil Ministry and theparliamentary committee charged withinvestigating the recent explosion at theAl-Rawdhatain oil facilities, he said, add-ing that the Ministry was keen to supplythe committee with all the necessary in-formation.

“Our files concerning the oil sector andthe necessary data will be put at the dis-posal of the committee and no piece ofinformation will be hidden from the com-mittee,” he said.

Sheikh Ahmad, who is also the coun-try’s Information Minister, underscoredthe necessity of rehabilitating and upgrad-ing the oil sector because it constituted themain source of national income in Kuwait.

The Oil Ministry, he said, would dis-cuss vital issues, such as security, safety,and operational and production systems,during the investigations, in order to de-termine the defects “with consideration tothe fact that demand on Kuwaiti oil isrelated to commitments in and outsideKuwait.”

He praised the positive role that hadbeen played by the committee to try andpinpoint the industry’s shortcomings toavert further accidents, and said that eve-rybody should be able to put their trust inthe firms operating in the Kuwait oil in-dustry and their personnel.

A huge fire gutted oil-gathering cen-tre number 15 and the gas-boosting sta-tion in the northern region of Al-Rawdhatain earlier this year. Four peopledied and 19 others were hurt in the acci-dent.

The fire is believed to have been theresult of an oil leakage at the main pipe-line emanating from the centre, whichspread to gas booster station number 130and the power sub-station at the samelocation, causing an explosion there.

The then Oil Minister, Dr Adel K Al-Sabeeh, tendered his resignation over theblast, which damaged oil facilities andhalted output from the area.

A Kuwait Cabinet statement quotedthe Crown Prince and Prime Minister,Sheikh Saad Al-Abdullah, as saying he hadaccepted Dr Al-Sabeeh’s resignation, andthat he “understood and appreciated” thereasons behind it.

The official Kuwait News Agency said

that Sheikh Ahmad would remain asActing Oil Minister, until the appoint-ment of a new Minister to the oil portfolio.

Local media reports added that a newOil Minister might not be appointed untilafter June 2003, when Kuwait’s next gen-eral elections are scheduled to be held.

Qatar Petroleum, Shellsign accord to studygas-to-liquids projectDoha — Qatar Petroleum (QP) andShell International Gas last month signeda statement of intent to study the devel-opment of a world-scale gas-to-liquids(GTL) facility, to be integrated with the de-velopment of the North gas field.

The statement of intent was signed byQatari Minister of Energy and Industry,Abdullah Bin Hamad Al Attiyah, who isalso Chairman of QP, and the Chief Ex-ecutive Officer of Shell Gas and Power,Linda Cook.

“We are pleased to welcome Shell toparticipate with us in developing a signifi-cant GTL conversion plant in the state ofQatar,” noted the Minister.

“We all share the vision of the Emirthat GTL synthetic fuels will play an im-portant role in the strategic developmentof Qatar’s hydrocarbon reserves in theyears ahead, and we are setting up a com-mittee to discuss the economics and vol-ume of the project,” he added.

“GTL represents a major export oppor-tunity for Qatar to further commercialiseresources in the North field by producingultra-clean, high-specification products forwhich there is a growing market,” notedCook.

“We are delighted to be working withQatar Petroleum on the development ofa world-scale GTL facility,” she went on.

Shell’s proprietary GTL technology,Shell Middle East distillates synthesis(SMDS), has been developed through a 25-year research programme, and imple-mented in the first-generation commer-cial SMDS facility in Bintulu, Malaysia.

QP and Sasol of South Africa havesigned an agreement to set up an $800million GTL project to produce 34,000barrels/day of environmentally friendlyfuels.

cided to delay it until early March untilafter negotiators had achieved “concreteand substantial” progress.

Western oil executives and experts havesaid that profitability, high taxes and dis-appointment at the size of the gas reserveson offer were the main bones of conten-tion.

“Undoubtedly, the companies havetheir demands, and the state has its de-mands. We are trying to sort out thesedemands into an agreement. I don’t callthis a dispute,” Naimi said.

The Kingdom, which has the fourthlargest proven gas reserves in the world, isplanning a second phase of gas projects,which would be “more substantial” thanthe first, Naimi continued, although hegave no details.

Analysts have noted that the basicobjective of the Saudi gas initiative isto make available cheap fuel in the coun-try’s main industrial centres. This will ex-pedite diversification and expansion of in-dustries, generating plenty of job oppor-tunities.

In a related story, the President andCEO of Saudi Aramco, Abdullah Juma,said the unprecedented success achievedin the oil sector during past 20 years hadcontributed to progress in all walks of life.

The rapidly-expanding gas networkhad now become the backbone of indus-trial development in Saudi Arabia, he tolda seminar on industrial development in theKingdom.

Juma said that Saudi Aramco currentlyproduces 5.4bn cubic feet/day of gas and400m cu ft/d of ethane. The projectscurrently under way will enhance outputto 7bn cu ft/d of gas and 600m cu ft/d ofethane.

“The planned expansion in the gassector reflects the true desire of Aramco tobe a dependable partner in the industrialdevelopment of the Kingdom,” he said.

Acting Kuwaiti Ministercalls for co-operation tosolve oil sector problemsKuwait — Kuwait’s Acting Oil Minis-ter, Sheikh Ahmad Fahad Al-Ahmad Al-Sabah has underlined the importance ofco-operation between all parties in moves

N E W S L I N E

March 2002 21

In briefProduction from the project will start

in 2005. The plant will be 51 per centowned by QP and 49 per cent by Sasol.

The project will consume about 330mcubic feet/day of lean gas, supplied byQatar’s enhanced gas utilization scheme.

The GTL project will produce 24,000b/d of fuel, 9,000 b/d of naphtha, and1,000 b/d of liquefied petroleum gas.

Iran seeks partnershipwith European firmto market its gasTehran — Iranian Petroleum Minister,Bijan Namdar Zangeneh, said last monththat his country was seeking a partnershipwith a European gas company, in its bidto find markets for its gas in Europe.

Iran believed it could find markets forits gas through the export of liquefiednatural gas, while the best overland routefor the export of natural gas from Iran toEurope would be via Turkey and Greece,he said.

Zangeneh said Iran should competewith other gas suppliers to find a footholdin Europe. The European market wasgrowing, but was currently dominated bymajor suppliers which included Russia,Algeria and Norway.

He stressed that Iran should competewith Russia and other suppliers of gas.“This is the nature of the market and webelieve there is enough room for Iran andRussia,” the Minister noted.

Asked whether Iran was consideringselling LNG to Europe, Zangeneh said thathis country was busy holding talks withmany countries, Italy and Spain in par-ticular, in this respect.

Negotiations had been held withRepsol-YPF of Spain and the two sideswere now negotiating the amount of LNG

to be sold by Iran.Italy and Spain are major markets for

Algerian gas and absorb nearly two-thirdsof the country’s exported gas.

Zangeneh said that take-or-pay con-tracts were of great importance for financ-ing projects. He noted that Iran had en-tered into talks with the European Com-mission on prospects for its gas exports.

“I feel that the European Union (EU)needs to diversify its energy suppliers and

we can help them,” he noted, adding thatIran preferred to work with the EU toconnect its natural gas network to that ofEurope.

On the domestic front, he observed,Iran was busy concluding contracts for thedevelopment of phases nine and 10 of theSouth Pars gas field, adding that the dealswould go into effect before the start of thenew Iranian year on March 21.

Zangeneh also noted that France’sTechnip, Iran’s Sunfire, South Korea’s LGcompany, and Iran’s Marine IndustriesCompany had presented proposals for theproject in December last year.

The National Iranian Oil Companyhad fully studied all the bids, he wasquoted as saying by the Islamic RepublicNews Agency.

Indonesia’s Pertaminato continue handlingmarketing of LNGJakarta — The Indonesian governmentis to pass a special decree to allow the stateoil and gas company, Pertamina, to con-tinue the marketing of liquefied naturalgas, it was announced last month.

Pertamina was reliable and in a muchbetter position than other firms to marketthe country’s LNG, according to the Direc-tor General of Oil and Gas at the Energyand Mineral Resources Ministry, DrRachmat Sudibjo.

Appointing a new company to handleLNG trade would be difficult, as it wouldhave to be done through an open tendersystem, said Rachmat, who is also hiscountry’s OPEC Governor.

Also, the new government body set upto regulate the industry would not beallowed to handle commercial businessunder the reformed oil and gas law whichcame into effect recently, he added.

Under the same law, Pertamina, whichis to be privatised from early next year, wasalso due to lose its right to market LNG onbehalf of the state, but Rachmat said thatthe government would issue a specialdecree to enable Pertamina to continuehandling the LNG business.

Pertamina is the largest LNG managingcompany in the world, handling 29 mil-lion tonnes/year of exports to Japan, South

Norway to maintain output curbsBRUSSELS — Norway, the North Sea and Eu-rope’s biggest oil producer, confirmed lastmonth that it has no immediate plans to endits limits on crude oil production. “There isnothing in the market today that would giveus reason to suspend our production cuts,”said the country’s Petroleum Minister, EinarSteensnaes. He also indicated that Norwaywould continue to maintain its output lim-its, whatever other non-OPEC nations de-cided. “If Russia decides not to continue withcuts beyond the first quarter, this won’t nec-essarily mean Norway will follow by suspend-ing its own cuts,” said the Minister. Russiaagreed to cut to its exports by 150,000 b/d aspart of the recent OPEC/non-OPEC pack-age of cuts, but Russian oil companies areknown to be keen to raise output this year,and analysts have expressed skepticism thatthe country will stick to its pledge.

Central Asia’s energy role to growTEHRAN — The break-up of the Soviet Un-ion and the establishment of the CentralAsian republics as independent states hastransformed the energy sector in the region,according to Michael Ward Clegg, of Cam-bridge Energy Research Associates. Address-ing a conference on Middle East energystrategy in Tehran, Clegg noted that over thenext decade, the region’s contribution toworld energy demand would be very signifi-cant, provided that the key missing link inthe chain — the infrastructure necessary todeliver oil and gas to the respective markets— was operational. Iran, said Clegg, was in alocation that had many positive attributeswhen looking at the long-term opportunitiesand challenges. He added that there werelikely to be many opportunities for the Ira-nian oil and gas sector in the coming years,but they would also present many challengesand require difficult decisions to be made.

BP sells Japanese service stationsLONDON — BP Japan announced last monththat it has agreed to sell its 21 service stationsto Japan Energy. Subject to approval from theJapanese Fair Trading Committee, Japan En-ergy will integrate the former BP self-servicestations into its existing network of more than4,400 sites, around 145 of which have beenconverted to self-service over the past year.The price for the transaction was not beingdisclosed but it is expected to be completedduring the first half of 2002. BP’s other op-erations in Japan, which include chemicals,gas and power, lubricants, marine, solar andtrading, are not affected by this decision andthe company said that it intended to continueto develop these businesses.

N E W S L I N E

22 OPEC Bulletin

In briefKorea and Taiwan from the Arun andBadak LNG complexes.

The company would also handle LNG

exports from the planned Tangguh com-plex, due to be built in the next few years,noted Rachmat.

Pertamina is due to start operating asa limited liability company with self-suf-ficient budgets and profitable operationsfrom 2003.

On a separate note, he also disclosedthat the government was planning non-fiscal incentives for oil and gas companies,to offset the impact of the value added taxthat was imposed about two years ago.

The incentives would be part of movesby the government to attract new invest-ment to build two more refineries, cost-ing some $2 billion, to increase the coun-try’s domestic fuel oil production.

The two plants were expected to havea combined output of 250,000 barrels/dayof fuel oil, which would be added to thecurrent 1.05m b/d output from the eightrefineries in the country.

Middle East to boostexports of products,says UAE officialAbu Dhabi — An official of the AbuDhabi National Oil Co (ADNOC) hassaid that the Middle East could expandits share of refined product exports in thenext two decades.

A local newspaper quoted the Man-ager of ADNOC’s Chemicals OperationsCo-ordination Division, MohammedAbdullah Al-Azdi, as saying that despitethe fact that the Middle East had about65 per cent of global crude oil reserves,only eight per cent of global crude oil wasrefined there.

Growth of Middle East refinery capac-ity was restrained, due to low regionaldemand and a global oversupply of refin-ing capacity, said Al-Azdi, noting that nonew grassroots refineries had been builtin the region since the mid-1980s.

In contrast, the pace of developmentof the petrochemical industry had beendramatic, with the Middle East expectedto account for around 16 per cent of glo-bal ethylene capacity by 2010, comparedwith the current eight per cent.

The main challenges for Middle Eastpetrochemical firms were the wave ofindustry consolidations taking placearound the world, and the reduction ofits exposure to one single market, namelyChina.

“The petrochemical industry outsidethe Middle East is consolidating rapidlywith mergers taking place. The region sellslittle to the domestic market and is heav-ily reliant on exports to one market, whichis China,” he noted.

Al-Azdi said that in order to maximizeprofitability, greater integration wasneeded between the refining and petro-chemical industries with purpose-builtsites required for this.

Algerian oil field dealworth $257m awardedto French, Italian firmsNew York — A consortium of two com-panies, France’s Bouygues Offshore andItaly’s Saipem, has won a turnkey contractfor an oil field development project inAlgeria.

The contract, worth $257 million, wasawarded after a public tender process bystate oil firm Sonatrach and its partnersBHP Billiton and Agip.

The project involves the RhourdeOuled Djemma field and five satellitefields, all located in the Berkine Basin, eastof Hassi Messaoud.

The contract covers the engineering,procurement and construction of facilitiesdesigned to gather the oil produced fromthe six fields and process 80,000 barrels/day of oil.

It also includes compressing gas out-put for reinjection into the reservoirs andinjection of water to maintain reservoirpressure. The work is expected to be com-pleted within two years.

The Chairman of Bouygues Offshore,Herve Le Bouc, commented: “This majorcontract is the third in Algeria after theexpansion of the Mesdar oil terminal in2001 and the Gassi Touil gas gathering andcompression station in 1999.

“It confirms Bouygues Offshore’smarket leadership in the country, where itoperates through its BOS Sofresid Algeriesubsidiary,” he noted.

Ecuador pipeline project moves aheadQUITO — Engineering work on Ecuador’snew heavy crude pipeline is over half com-pleted, with building work on the projectcurrently 10 per cent completed, accordingto government sources in the capital Quito.They noted that the pipeline had reached theport of Esmeraldas, with 39,721 tonnes ofpipe being used, representing 30 per cent ofthe total. Land work and concreting was pro-gressing for the provision of pumping stationsin the Amazon region, comprising the unitsof Amazonas, Cayagama, Sardinas andAramo. In the area of Santa Rosa de Quijos,the welding of pipes had started, while in zoneII, work was ahead of schedule. In zone IV,stretching from Mindo to Esmeraldas, workon the curving and welding of pipes began inthe first half of January, while at the oil portof Balao, land works were being concluded,the sources added.

GCC’s current account surplus downABU DHABI — Oil prices kept the overall cur-rent account of the six Gulf Co-operationCouncil (GCC) states in surplus for the thirdyear running in 2001, it was reported lastmonth. However, the situation might dete-riorate this year, according to Malik Younus,an economist at the Saudi National Commer-cial Bank. “Some members could have a defi-cit this year because of lower oil prices andproduction. Others would record small sur-pluses,” he said in an interview published inthe Dubai-based newspaper Gulf News. Ana-lysts see the GCC’s current account balancerecording a surplus of around $20 billion in2001, because oil prices were relatively strongand there were no large increases in importsand remittances. However, this was far lowerthan the $45.5bn surplus recorded in 2000,when average crude prices climbed to morethan $27/b due to strong global demand.

Gas consumption seen rising stronglyTEHRAN — Natural gas consumption will in-crease strongly over the next two decades,according to a senior partner at the UnitedKingdom’s Denton Wilde Sapte, SusanFarmer. Addressing a gathering on MiddleEast energy strategy in Tehran, she said thatgrowth in the use of gas for power genera-tion would be especially dramatic. The ad-vent over the past decade of combined cyclegas turbine power generation technology,with its advantages of lower cost, shorter con-struction time, high efficiency and less pol-lution, had been a strong driver for futureexpansion of the natural gas and liquefiednatural gas markets, she was quoted by theofficial Islamic Republic News Agency(IRNA) as saying.

N E W S L I N E

March 2002 23

In briefFirms sign new accordon exporting Libyannatural gas to Italy

Tripoli — An agreement has been signedby a consortium of energy firms for thedevelopment of Libya’s Western Jama-hiriya gas reserves, according to govern-ment sources.

The accord was signed by the Chair-man of the Libyan Agip Gas Companyand representatives from Italy’s ENI, aswell as contractors from Japan’s JGC,Tecnimont of Italy, and another Frenchfirm.

The project, when in place, wouldprovide Italy with 8 billion cubic feet/yearof gas, as well as providing supplies for theEuropean market in general.

The gas would be transported througha network of undersea pipelines, extend-ing from Millieta to the west of Tripoli, toJila in the south of Italy.

The Libyan National Oil Corporation(NOC) said the first basic stage of theproject was worth $1.2bn, while the en-tire project would cost $5bn to complete.

NOC sources said the total produc-tion capacity of the project was estimatedat 10bn cu ft/y of gas, of which some 2bncu ft/y would be consumed locally.

The company confirmed that thefunding of the project would be via loansfrom the Libyan Central Bank, the LibyanArab Foreign Bank, and various interna-tional financial institutions.

Venezuela and Irandiscuss ways to boostenergy, economic tiesTehran — Top officials from Venezuelaand Iran have discussed ways of boostingmutual ties in energy and economic en-terprises at meetings in the Venezuelancapital Caracas, according to the IslamicRepublic News Agency (IRNA).

Venezuelan Minister of Energy andMines, Alvaro Silva Calderon, and Min-ister of Production and Commerce, AdinaBastidas, met with the visiting IranianMinister of Mines and Industries, EshaqJahangiri.

The two sides explored avenues forbroadening bilateral co-operation in suchareas as industries, mines, oil and petro-leum.

They agreed to lay the groundwork forupgrading Tehran-Caracas relations in thearea of mines, by encouraging the ex-change of experts and by co-operating inmine exploration and exploitation.

IRNA added that the two sides hadalso agreed to expand ties in such areasas petroleum and the production ofsteel, aluminium and pharmaceuticalproducts.

Bastidas also noted that a co-operationagreement between the Iranian and Ven-ezuelan central banks had been a majorsuccess of the talks.

Iran-Venezuela trade transactions arenot encouragingly high. They amount toa value of just $1.5 million annually, whilebilateral co-operation has mostly been lim-ited to ties within OPEC.

Saudi Refining, Shell Oilcomplete acquisition ofTexaco downstream unitsNew York — Saudi Refining Inc (SRI)and Shell Oil have announced that theyhave completed the acquisition of Texaco’sdownstream interests, Equilon Enterprisesand Motiva Enterprises.

The move means that Shell and SRInow each own 50 per cent of Motiva, whileShell has a 100 per cent interest inEquilon.

Texaco’s disposal of its stakes inEquilon and Motiva was part of its mergerwith US rival Chevron to formChevronTexaco.

In addition to managing its joint ven-ture investments, SRI supplies approxi-mately 550,000 barrels/day of crude toMotiva, which has a refining capacity ofapproximately 800,000 b/d.

Shell Oil, which is the US arm of RoyalDutch/Shell, is one of America’s leadingfirms in oil and gas production, gasolineand natural gas marketing, and petro-chemical production.

SRI, which is headquartered in Hou-ston, Texas, is a subsidiary of AramcoServices Company, part of state oil firmSaudi Aramco.

Oil majors blast UK licence plansBRUSSELS — Oil majors operating in theUnited Kingdom sector of the North Sea havehit back angrily at government plans to forcethem to give up their exploration and pro-duction licences to smaller operators willingto use them. The ‘use or lose’ plan, outlinedby Energy Minister Brian Wilson, is in linewith the government’s attempts to reverse thedecline in North Sea oil output. The latestfigures from Royal Bank of Scotland showthat North Sea oil production in 2001 wasdown by 10 per cent from the previous yearbecause of a lack of investment by the ma-jors, following the slump in prices in the late1990s. However, the oil majors have describedthe plan as “completely unnecessary” as theyhave already been steadily releasing undevel-oped North Sea fields. BP pointed out thatof the 85 undeveloped fields it had two yearsago, 44 had been sold on, 10 were under re-view, while 16 were being developed.

More gas used in US home heatingNEW YORK — Some 70 per cent of single-family homes completed in the United Statesin 2000 used natural gas for heating, accord-ing to a new survey by the American Gas As-sociation (AGA). Electric heating had 27 percent of the market, while heating oil had justthree per cent, the survey found. Overall, 59million residential customers, or 61 per centof total existing US households, used naturalgas in 2000, according to figures from theUS Department of Energy. Around 83 percent of these customers used natural gas forhouse-heating purposes, representing 51 percent of total US homes with heat. The totalnumber of natural gas residential customersrose by nearly one million between 1999 and2000, the AGA survey added.

UK Jade field due onstream soonBRUSSELS — A key hydrocarbon field devel-opment in the United Kingdom sector of theNorth Sea is set to come onstream very soonafter a delay of several months, according tothe field’s operator, Phillips Petroleum. Oilproduction from Jade is expected to reach16,000 b/d in late 2002 and gas output isput at 5.3 million cubic metres/day. The field’soil deposits amount to some 30m barrels,while its gas reserves total 380 billion cu ft.The gas will be transported via the Judy fieldand the CATS pipeline to the Teesside termi-nal. The oil will go through the Norpipe pipe-line to Phillips’ Teesside Seal Sands terminal.The crude oil will be co-mingled with themain North Sea light sweet Ekofisk grade andwill be sold as part of the Ekofisk blend. TheJade field is located in block 30/2C of theUK North Sea.

N E W S L I N E

24 OPEC Bulletin

In brief Nigera’s NNPC signsoil agreement with twoindigenous companies

Abuja — The state-run Nigerian Na-tional Petroleum Corporation (NNPC)last month signed a production-sharingcontract (PSC) for the development of OPL320 in the oil-rich Niger Delta with twoindigenous companies, Oranto Petroleumand Orandi Petroleum.

According to Nigerian officials, thedeal was part of the efforts by the govern-ment to boost the level of indigenousparticipation in the upstream sector of thedomestic oil and gas industry.

The Presidential Adviser on Petroleumand Energy, Dr Rilwanu Lukman, signedon behalf of the government and theNNPC, while the Chairman of Oranto,Chief Arthur Eze, represented the twocompanies.

Lukman said the signature bonusaccruable to the government was $13.5million, comprising $7m for prospectingand $6.5m when the agreement was con-verted to an oil mining lease.

“The pact represents a major milestonein the development of the oil industry,particularly in the light of the clamour formore indigenous participation in theupstream sector of the industry,” saidLukman.

He explained that the contract wouldbe for a period of 30 years, 10 years forexploration and 20 years for production.The three companies had agreed to worktogether to prospect for oil in the field.

Lukman added that the prospectingfor oil would begin with two wells, locatedabout 3,000 feet below sea level.

The government, he noted, was will-ing to enter into similar co-operation withother competent indigenous companieswith the financial wherewithal.

Commenting on the deal, the NNPC’sGroup Managing Director, Jackson Gaius-Obaseki, advised the companies to “re-main in the driver’s seat and not to allowthemselves to be reduced to mere agents.”

He gave assurances that the NNPCwould continue to provide a level playingfield for the venture to succeed.

Speaking on behalf of the companies,Eze said they would not only co-operate

fully to develop the field, but would liveup to expectations.

He added that the agreement repre-sented a major feat in the industry andexpressed optimism that it would spurinterest among other indigenous compa-nies.

Qatari Minister stressescommitment to furthernatural gas developmentDoha — Gas supplies from Qatar areexpected to rise to 12 billion cubic feet/day by 2010, and further to 16bn cuft/d by 2020, according to the country’sEnergy and Industry Minister, AbdullahBin Hamad Al Attiyah.

Having the largest single non-associ-ated gas field in the world, with resourcesin excess of 500 trillion cu ft, made Qatar’sgas development attractive for all inves-tors, said the Minister in a statementannouncing the Gastech 2002 conferenceand exhibition, which is due to be held inDoha in October.

In addition to the nation’s gas devel-opment initiative, options for a gas-to-liquids (GTL) programme are under con-sideration, added Al Attiyah.

“We are pursuing the GTL option andwe are discussing various offers that couldmake Qatar the GTL capital of the worldwith 300,000–400,000 b/d of liquidsproduced from about 4bn cu ft/d of gas,”he stated.

Commenting on the sustainability ofglobal growth in the use of liquefied natu-ral gas, the Minister said that gas’s share inprimary energy consumption was notcompatible with its reserves and resourcesworldwide.

“Additionally, growing concern overthe environmental issue has forced majorconsumers to review their energy demandpatterns with greater attention to gas,being a cleaner and friendlier source ofenergy, especially in electricity generation,”he said.

“However, the high cost of liquefac-tion and transportation, in addition to therequired investment in receiving or utiliz-ing gas, especially in the form of LNG, doesnot provide the incentives to build moregrassroots LNG projects.

Over 200 US firms report GHG cutsNEW YORK — A total of 222 United Statescompanies and other organizations have toldthe Energy Information Administration’s vol-untary reporting of greenhouse gases (GHGs)programme that during 2000 they undertook1,882 projects to reduce or sequester GHGs.Reported emission reductions included 187million tonnes of carbon dioxide equivalentin direct reductions, 61m t in indirect reduc-tions, 9m t of reductions from carbon seques-tration, and 12m t of other unspecifiedreductions. Direct emission reductions arethose from sources owned or leased by thereporting entity, while indirect reductions arefrom sources not owned or leased by the en-tity, but which occur as a result of its activi-ties. The EIA’s programme, established in1994, affords an opportunity for any organi-zation to establish a public record of itsachievements in reducing or offsetting GHG

emissions.

US firm invests $808m in EcuadorQUITO — US oil company Occidental hasannounced that it has invested $808 millionover a four-year period for the developmentof various oil fields in Ecuador. The invest-ment, described as a major project by theAmerican company, is expected to createabout 3,370 direct employment opportuni-ties in the oil exploration business. The oilblocks to be developed by the company, un-der a participatory contract agreement withthe government of Ecuador, include theLimon Cocha, Eden-Yuturi, and Indillana oilfields. The sum of $111m has also been setaside by the US company to support futureexploration activities in the area.

API supports Bush’s climate initiativeNEW YORK — The American Petroleum In-stitute (API) has said in a statement that itsupports President George W Bush’s climatechange initiative. The President’s plan “ap-propriately emphasizes the development ofnew technologies to reduce greenhouse gasemissions without damaging the economy,”the API said. The programme will enhancethe already aggressive efforts by industry indeveloping the necessary technologies andprograms to reduce emissions while impor-tant scientific research continues, it added.“For two years, our industry has been com-piling, evaluating and disseminating informa-tion on estimating greenhouse emissions. Wehave shared our work with a wide range ofstakeholders, including other industries, fed-eral and state government, and the environ-mental community,” the API noted. “Wehave found that consistent estimation of GHGsis much more difficult than believed,” it added.

N E W S L I N E

March 2002 25

In brief“This is an issue worth future discus-

sions in order to find a proper solution,even though great strides have been madein reducing the costs of liquefaction andtransportation,” he observed.

Elaborating on the country’s futureLNG plans, Al Attiyah said: “Based on thevarious commitments, our figures indicatethat by 2008, Qatar’s LNG capacity will bearound 31 million tonnes/year, and ifeverything goes according to plan, we willbe the largest LNG exporter in the world.

In the light of these developments, theMinister said that he saw Gastech 2002 asbeing very important, since it would “pro-vide us with a unique opportunity that willfacilitate the achievement of our aspira-tions in developing our gas.”

Iran attends conferencein Moscow to discussCaspian Sea legal issuesMoscow — A senior Iranian official hastold a conference in Moscow on the legalissues affecting the Caspian Sea that hiscountry has the long-term interests of theregion at heart.

“Iran regards a joint regime as the bestchoice for the Caspian Sea,” the country’sRepresentative for Caspian Sea Affairs,Mehdi Safari, told the Moscow gathering.

However, should the interests in theCaspian Sea be divided, Iran must be al-located at least 20 per cent, Safari noted.

The agreements of 1921 and 1940between Iran and the Soviet Union mustbe the basis for determining the status ofcontrol over the Caspian Sea, he added.

Safari cautioned that any delay indetermining a legal framework wouldadversely affect the sea’s ecosystem, and heindicated that Iran was ready for negotia-tions on the issue.

Until an agreement is reached, anyunilateral and provocative acts should beavoided, he was quoted as saying by theIslamic Republic News Agency.

Iran views the Caspian as a symbol offostering co-operation based on the mu-tual interests of the five littoral states,added Safari.

He referred to the Ashkhabad agree-ment reached among the Foreign Minis-ters of the littoral states on preserving its

ecosystem and added: “Any agreement onthe Caspian Sea legal framework must bereached by consensus of the littoral coun-tries.”

The two-day Moscow conference onCaspian Sea legal issues was attended byrepresentatives from Iran, Russia, Kazakh-stan, Azerbaijan and Turkmenistan.

The conference was co-sponsored byRussia’s Ministry of Foreign Affairs, Mos-cow’s Faculty of International Relationsand several Russian gas and oil companies.

Planned reforms ofIndonesia’s Pertaminacould come in 2003Jakarta — The planned reform of In-donesian state oil and gas enterprisePertamina into a limited liability companymay come by early 2003, according to thefirm’s President Director, Baihaki Hakim.

This would be ahead of the widely-expected schedule of November 2003, asstipulated under the country’s new oil andgas law, Baihaki said.

A tendering process had been workedout to select auditors to separate the com-pany and government assets, he noted.

The new law, which came into effectlast November, gives Pertamina two yearsto transform into a limited liability com-pany, transferring its state assets andmanagement responsibilities to a newagency for managing the country’s hydro-carbon resources, which is to be set up bythe government.

Pertamina currently manages all as-pects of the Indonesian oil and gas sector,including the administration of produc-tion-sharing contracts with internationaloil companies, which produce 1.2m–1.3mb/d of crude oil.

Baihaki also disclosed that IndonesianPresident, Megawati Soekarnoputri, wasscheduled to visit South Korea in Marchmonth to help secure a liquefied naturalgas export contract for Pertamina.

He said that Pertamina was seekingways to ensure that its LNG supply con-tract with South Korea continued after theenergy industry was liberalized. The In-donesian firm currently exports 5.2mtonnes/year of LNG to the Korea GasCorporation.

US crude output rises, imports dropNEW YORK — US domestic crude oil pro-duction continued its steady rebound fromthe low levels of a year ago, to increase nearlythree per cent in January 2002, compared tothe same month in 2001, the American Pe-troleum Institute (API) reported. Alaskanproduction of 1.03 million barrels/day was5.3 per cent higher than a year ago, while anestimated 8.47m b/d of foreign crude oilcame into the USA, which was a 3.3 per centdrop from a year ago. There was a big 30.9per cent drop in imported refined products,although this was partly due to the unusuallylarge amount the year before, the report said.Total imports dropped about 11 per cent year-over-year, on top of the nine per cent declinelast December. Gasoline imports of 707,000b/d were down 2.3 per cent from a year ago.January’s import dependency level was at 57.3per cent, compared to 60.7 per cent in Janu-ary a year ago.

IEA sees 2002 demand growth slowingPARIS — The International Energy Agency(IEA) has revised its 2002 demand growthforecast down by 60,000 b/d to 500,000 b/d,on the basis of unseasonably warm winterweather and lower natural gas prices in theUnited States. In its latest monthly Oil Mar-ket Report, the IEA predicts that global de-mand in the first quarter of 2002 will reach76.4m b/d, down 500,000 b/d from a yearearlier and down 200,000 b/d from its esti-mate a month ago. Demand for the second,third and fourth quarters is put at 75.0mb/d, 76.3m b/d and 78.2m b/d, respectively.Average worldwide demand this year shouldbe at least 76.5m b/d, compared with 76mb/d in 2001. On the supply side, the IEAnoted that OPEC production, including Iraq,had fallen to 25.19m b/d. Excluding Iraq,output was estimated at 23.02m b/d, downby 640,000 b/d. Non-OPEC supply eased by100,000 b/d to 47.74m b/d, up 940,000 b/dfrom a year ago.

Novus Petroleum announces gas findJAKARTA — Novus Petroleum of Australia hassaid it has made a hydrocarbon discovery inthe onshore Brantas production sharing con-tract field, in East Java, Indonesia. The Carat-1 discovery, which flowed at a rate of 2.3million cubic feet/day of natural gas as wellas heavy oil, is close to the Wunut gas field.“Preparations are underway to spud Grati-1,the final well in the Brantas PSC to testPiloscene reservoirs in a fault-closed struc-ture,” said Novus in a statement. Grati-1 isclose to a gas-fired power plant owned by theIndonesian state electricity company PTPLN, the statement added.

N E W S L I N E

26 OPEC Bulletin

In briefHowever, supplies were disrupted last

year when separatist forces attacked anddamaged gas fields in northern Sumatra’sArun province, forcing the closure of theArun LNG export terminal.

Dolphin Energy awardsfour new contracts forstudies on gas projectAbu Dhabi — Dolphin Energy Ltd(DEL) of the United Arab Emirates (UAE)has awarded four separate contracts forstudies on its multi-billion dollar Dolphingas project to Fugro Survey (Middle East).

The contracts, worth a total of $5million, call for an offshore geophysicaland geotechnical survey; an onshore geo-technical and topographical survey; andmidstream and upstream environmentalimpact assessments.

The new contracts follow the awardof the $10.3m upstream front-end engi-neering and design (FEED) contract in earlyDecember 2001 to a partnership of Fos-ter Wheeler of the US and Sofresid ofFrance.

The upstream FEED work calls for theengineering, design and management ofthe offshore production platforms in theNorth field, the offshore pipeline from theNorth field to Ras Laffan, a gas process-ing plant and gas compression facilities atRas Laffan, and the product storage, off-site and associated facilities.

DEL is currently evaluating technicaland commercial bids for the midstreamFEED contract. A contractor is to be selectedsoon, a company statement said.

Progress is also being made on theselection of a second strategic partner forDEL, which is currently owned 75.5 percent by the UAE Offsets Group (UOG),while France’s TotalFinaElf owns the re-maining 24.5 per cent.

UOG is said to be negotiating withfive shortlisted international oil companies— BP, Conoco, ExxonMobil, OccidentalPetroleum, and Royal Dutch/Shell — oneof which will be selected to acquire up 24.5per cent of DEL by mid-2002.

The financial structure of the Dolphinproject is also being put in place, with ap-pointment in early January of Credit SuisseFirst Boston as DEL’s financial adviser.

The project cost is put at $3.5 billion,of which $2.5bn will be spent on thedevelopment of the upstream facilities inQatar and $1bn will be used for puttingin place the gas transmission pipeline andassociated facilities.

Kuwaiti oil revenuesseen falling 26.5 percent, says new studyKuwait — Kuwait’s oil revenues in thefirst ten months of the fiscal year 2001–02 are about 26.5 per cent lower comparedwith revenues in the previous fiscal year,it was announced last month.

A report by the Al-Shall Research andStudy Corporation said that 17.5 per centof the drop was due to lower oil prices inthe world market, with nine per cent at-tributable to the decrease in OPEC pro-duction.

By end of January, 10 months into theyear 2001–02, the country’s oil was at theprice of $18.1/barrel, which was a $2/bincrease over the price last December.

The report indicated that Kuwaiti oilaveraged $20.8/b over the last 10 months,dropping from $21.1/b last December andfrom $25.2/b the last fiscal year.

It added that 10 months into the fis-cal year, Kuwait should have secured rev-enue of around $11,394 million if all non-oil revenues were collected in full.

The estimated expenditure of around$17,404m meant that a significant budgetdeficit was expected, according to thereport.

However, the actual deficit wouldprobably be lower than predicted, giventhat actual revenues usually exceed predic-tions and actual expenditures are usuallyless than the estimates, it added.

Algerian Minister givesdetails of country’s newoil taxation systemAlgiers — Algerian Energy and MinesMinister, Dr Chakib Khelil, last monthgave an outline of the country’s new oiltaxation system, which is expected to beimplemented soon.

Chinese province mulls LPG pipelinesNEW YORK — The Largo Vista Group hasannounced that it is negotiating with the pro-vincial government of Guizhou, China, forthe construction rights to liquefied petroleumgas pipelines. The project would cover theconstruction of LPG pipelines for residentialgovernment complexes in the city of Zunyi,the second largest city in Guizhou province.The initial phase of the project would servicemore than 1,000 households. “This pipelinecontract will make the company the sole au-thorized pipeline construction company inthe province,” commented Largo Vista’s Gen-eral Manager of Chinese Operations, LiChuming. The Largo Vista Group distributesLPG in southern China, providing the Chi-nese government with an alternative to thecurrent widely-used energy sources, which arecoal and wood.

Drilling activity mixed in JanuaryNEW YORK — The worldwide rig count forJanuary 2002 stood at 2,016, which was up99 from the 1,917 counted in December2001 but down 358 from the 2,374 countedin January 2001, according to the latest fig-ures from Baker Hughes. The internationalrig count (the whole world except the USAand Canada) for January 2002 was 744, downeight from the 752 counted in December2001, but up 27 from the 717 counted inJanuary 2001. The international offshore rigcount for January 2002 was 235, which wasup 13 from the 222 counted in December2001 and up 29 from the 206 counted inJanuary 2001. The US rig count for January2002 was 867, down 34 from the 901counted in December 2001, and down 251from the 1,118 counted in January 2001. TheCanadian rig count for January 2002 was405, up 141 from the 264 counted in De-cember 2001, and down 134 from the 539counted in January 2001.

TotalFinaElf invests in Brunei blockPARIS — French oil company TotalFinaElf hasannounced the acquisition of block J in thedeep offshore waters of Brunei and is cur-rently negotiating a production-sharing agree-ment with authorities there. Block J coversan area of about 5,000 sq km and is locatedsome 100 km from the Brunei coast in waterdepths ranging from 1,300–1,800 metres.The French company has taken a 60 per centinterest in the block, alongside BHP Billitonwhich has 25 per cent and Amerada Hess with15 per cent. The group said that implemen-tation of the award was contingent on “suc-cessful negotiation of a production sharingagreement.” TotalFinaElf already producesaround 20,000 b/d in Brunei.

N E W S L I N E

March 2002 27

Speaking at a seminar on oil taxation,Khelil said the new regulations were de-signed to attract new investors and pro-mote competition.

The new system introduced a tax called‘occupancy rent’, the idea of which was toencourage investors to speed up activeexploration activities in their respectivefields where applicable.

Under the terms of the new regula-tions, the tax on petroleum revenue wouldbe calculated according to the value ofoutput of the field from the start of pro-duction.

Khelil said that the tax on petroleumrevenue would permit the adaptation ofthe tax system to the size of the discoveredfields.

Also last month, Khelil visited Wash-ington, where he held talks with USEnergy Secretary, Spencer Abraham.

According to a statement from theAlgerian Energy and Mines Ministry, themeeting covered bilateral energy relationsbetween the two countries.

It said that the two sides reviewedprospects for increasing bilateral co-opera-tion in hydrocarbon activities, includingopportunities offered by the Algerian oiland gas sector, following the reformsimplemented by the country.

Khelil invited his US counterpart tovisit Algeria, adding that the visit couldtake place during the spring this year.

Quick action avertsfire at Saudi Arabia’sRas Tanura refineryRiyadh — Saudi Arabian state oil firmSaudi Aramco announced last month thatquick action had averted a fire at the RasTanura refinery.

A small fire and smoke were noticedby workers in one of the compressor unitsof the old section of the Ras Tanura plant,said a Saudi Aramco statement.

The incident was quickly contained bythe refinery teams, who responded imme-diately, isolating the affected unit andextinguishing the fire.

The statement added that the damagewas minor and the product supply sectionof the refinery was unaffected. No inju-ries were reported.

In a separate incident last month, theKuwait National Petroleum Company(KNPC) reported a technical failure in acompressor at the Shuaiba refinery’sisocracker unit.

KNPC’s Director of Public Relations,Rajih Al-Ameer, was quoted by the Ku-wait News Agency as saying that there wasa small fire at the unit, but it was imme-diately put out.

The 36,000 barrels/day isocracker wassecured in line with maintenance proce-dures. Some of the crude that was previ-ously processed in the unit would now beredirected to another facility, while the restwould go into storage until the damagedunit resumed operation.

The required maintenance would becarried out as soon as possible and opera-tions would resume shortly afterwards,said Al-Ameer.

Nigeria’s NNPC andjoint venture partnersreconcile 2001 accountsAbuja — The Nigerian National Petro-leum Corporation (NNPC) and its up-stream joint venture (JV) partners arereconciling their accounts for 2001, ac-cording to a report in local newspaper TheGuardian.

The reconciliation exercise is expectedcompile information on the operations ofthe JVs that will go into the NNPC’soperations report for 2002.

This will determine the state of indebt-edness by the NNPC to the JV operations,and enable the measurement of their per-formance against the value of funds re-leased for oil and gas exploration andproduction for the 2001 fiscal year.

The exercise being carried out underthe supervision of the National PetroleumInvestment Management Services(NAPIMS), a subsidiary of the NNPC,which is also expected to design ways ofeffectively managing cash call paymentsbetween operators and the NNPC.

The affected firms are the Nigerianunits of Royal Dutch/Shell, ExxonMobil,ChevronTexaco and TotalFinaElf, as wellas the Nigeria Agip Oil Company and PanOcean.

The NNPC last year adopted a six-

Conoco, Phillips shareholders okay mergerHOUSTON — US majors Conoco and Phillipshave both announced that their stockholdershave voted to approve the proposed merger.The votes were cast at special stockholdermeetings in March. “We’re pleased with theoutcome and appreciate the support from ourstockholders,” said Conoco Chairman, Presi-dent and CEO, Archie W Dunham. “Webelieve this merger of equals will create sig-nificant additional value for our stockhold-ers. The combination creates an extraordinaryset of complementary capabilities, drawingon the talented management and core com-petencies of both Conoco and Phillips,” headded. Dunham also said the new companywill have strong and stable earnings and cashflow as a result of its portfolio diversificationand a larger relative presence in more politi-cally stable regions of the world.

French imported oil prices firmerPARIS — The price of imported crude oil inFrance firmed by 85 cents/barrel in January,the National Statistics Office said in its latestreport. Benchmark Brent crude oil wasquoted at an average of $19.45/b for Janu-ary, compared with $18.60/b in December2001. “The announcement by the principalproducer countries — OPEC, but also Rus-sia, Norway and Mexico — of a 2m b/d re-duction in their exports as of January 1 hadan impact on prices,” the office said. The risehad an impact on the price of premium gaso-line, which was trading at $168.00/tonne inJanuary, compared with $159.00/t the previ-ous month. Diesel fuel and domestic heatingoil prices were unchanged at $163.00/t, whileheavy fuel prices moved up to $98.00/t, asagainst $93.00/t a month earlier.

EU, GCC to discuss free tradeBRUSSELS — A meeting of the Foreign Min-isters of the six Gulf Co-operation Council(GCC) states and the European Union (EU)was scheduled to be held in Granada, Spainat the end of last month. The GCC hoped touse the forum to press the EU to sign thelong-awaited free trade pact, following theGCC’s removal in December of its customsunion. The absence of a customs union hasbeen the main stumbling block to an EU-GCC trade agreement. “We will present de-tails of the customs agreement at the meetingand we will ask them to hasten measures tosign the free trade agreement. We hope therewill be no more excuses because any delay infinalising this accord will not be in the inter-est of the GCC states,” said a GCC official.The GCC is the main oil supplier to the EUand the two-way trade is worth over $35bnannually, largely in favour of the EU.

In brief

N E W S L I N E

28 OPEC Bulletin

point strategy for managing the cash callventures. The strategies include ensuringprompt payment of cash call claims, strictcompliance to budgeted work programmesby the operators, and compliance by op-erators with the provisions of the jointoperating agreement on cash call pay-ments.

The Nigerian government has ap-proved $3.5 billion for JV operations,representing the average 57 per cent stakeof the Nigerian government in JV deals.

The oil companies have contributed$2.6bn as their part of the funding, whichbrought the total expenditure by the sevenmajor operators to about $6.15bn.

The government has proposed$3.38bn for this year’s exploration andproduction activities, and the proposal isstill before Nigerian legislators, awaitingapproval before it is signed into law byNigerian President Olusegun Obasanjo.

Qatari natural gas fuelsplanned 500-megawattpower plant in IndiaDoha — A proposed power project inIndia which will use Qatari gas is makingprogress and is likely to be commissionedby mid-2005, according to the project’schief promoter, K P Nambiar.

Nambiar, a former senior Indian gov-ernment official, said that Qatar is toprovide natural gas to power a planned500-megawatt power plant in Kerala State,India, once the LNG receiving terminal inKochi, run by Indian firm Petronet, comesinto operation in 2005.

In an interview with Qatari newspa-per The Peninsula, he said that land forthe proposed power plant, which will beset up in Kannur district in the north ofKerala, had already been acquired.

The project is the first major indus-trial initiative in Kerala after the authori-ties launched a drive to fight the state’simage as an investment-hostile environ-ment.

Nambiar added that he had beenworking on the project for the past sevenyears and has already concluded gas sup-ply deals for the plant with Petronet andthe Gas Authority of India.

The cost of the project is estimated at

$340 million, which is believed to be thelowest in India for such a power plant, hepointed out.

According to Nambiar, applicationsfor the necessary approvals have alreadybeen made to India’s Central ElectricityAuthority and a co-promoter for theproject is now being sought. Final approvalfor the project is likely to come by the endof the year.

Sheer Energy getsapprovals for Iranianoil field developmentNew York — Sheer Energy Canada hasannounced that it has received all neces-sary approvals from the Iranian govern-ment with respect to its service contractfor the development of the Masjed-I-Suleyman oil field.

The agreement, a buy-back style con-tract, was negotiated with the NationalIranian Oil Company and Sheer Energy(Cyprus), which is the operator of theproject with a 49 per cent interest.

The balance of the project, 51 per cent,is held by Naftgaran Engineering ServicesCompany of Tehran, which is a subsidi-ary of the Oil Industry Investment Com-pany of Iran.

The terms of the agreement call for theinvestment of approximately $88 millionover a period of four years, to reach thetargeted production level of an incremen-tal 20,000 barrels/day of oil.

The work involves a detailed reservoirsimulation study, recompletion of four tosix wells, drilling two new vertical andeight horizontal wells, and the construc-tion of processing and water re-injectionfacilities.

Repayment will be made from crudeoil sales over the ensuing three years fromproject completion. Compensation for theinvestment is based upon an agreed rateof return at the targeted production level.

The rate of return will increase ordecrease if production rises above or fallsbelow the target level over the paybackperiod.

The Masjed-I-Suleyman field has along history. It was the first oil reservoirdiscovered in the Middle East and wasinitially drilled in 1908.

Lower prices depress UAE’s GDPABU DHABI — The gross domestic productof the United Arab Emirates (UAE) fell byfour per cent last year, compared with 2000,according to a new report. In releasing theeconomic indicators report, the Minister ofPlanning, Sheikh Humaid Bin Ahmed AlMualla, said the decline in GDP was due tothe fall in oil prices worldwide. The nation’sGDP was $68 billon in 2001, compared with$70.76bn in 2000. Oil prices dropped by 16per cent, from an average of $27.6/barrel in2000 to $23/b last year, he noted. Revenuefrom the oil sector fell by 17 per cent in 2001from the year before, reducing its contribu-tion to GDP from 33.4 per cent in 2000 to 28per cent last year. Correspondingly, the non-oil sector’s share of GDP rose from 66.5 percent in 2000 to 72 per cent last year. Themanufacturing sector was the top non-oilcontributor, with 13.8 per cent of GDP in2001, compared with 13.4 per cent in 2000.

Egyptian firm invests in AlgeriaALGIERS — The Egyptian construction firm,Orascom, has started the construction of acement factory at M’sila, situated 300 kmsouth-east of the capital Algiers. The project,to be fully financed by the Egyptian company,will cost $150 million to complete and isscheduled to be brought into production in2004. In the first stage, the factory will pro-duce 1.4m tonnes/year of cement, which willrise to 1.8m t/y in the second phase. Accord-ing to Orascom’s General Manager, NaguibSawiris, the firm planned to invest in otherprojects in Algeria, including another cementfactory, and telecommunications and tour-ism schemes. He was speaking here at a cer-emony marking the activation of a GSM

network, for which his firm received a licence.

BP sells Yorktown refinery to GiantSCOTTSDALE, ARIZONA — BP and Giant In-dustries announced last month that they hadreached an agreement for Giant to acquireBP’s Yorktown, Virginia refinery for $127.5million plus the value of inventory at clos-ing, currently estimated to be $42 million.Additionally, the agreement includes poten-tial payments not to exceed $25 million ifcertain refining margin levels are met begin-ning in the year 2003 and concluding at theend of 2005. The refinery is located inYorktown, Virginia, on the York River andhas a crude oil processing capacity of 62,000b/d. The product slate, approximately 50 percent gasoline, also includes a wide range ofproducts such as diesel fuel, heating oil andcoke. The refinery is the only one in Virginiaand is able to serve the local area, as well asthe New York Harbour.

In brief

March 2002 29

E N V I R O N M E N T N O T E B O O KE N V I R O N M E N T N O T E B O O K

nternational climate change negotia-tors in Marrakech, Morocco, reachedagreement on November 10, 2001 on

a complex set of decisions specifying rulesfor implementing the Kyoto Protocol. Thedecisions by the Seventh Session of theConference of the Parties (COP7) to theUN Framework Convention on ClimateChange (UNFCCC) provided detailedlegal text elaborating on the broad prin-ciples of the Bonn Agreement, reached inJuly at the reconvened COP6 in Bonn,Germany.

The Marrakech Accord effectively com-pletes the work under the Buenos AiresPlan of Action (BAPA), adopted at COP4,and sets the stage for countries to ratify the

Protocol and bring it into force possiblybefore the convening of the World Sum-mit on Sustainable Development in Sep-tember 2002, but with the US formallynot on board.

The Bush administration is studyingwith “serious interest” a proposal to re-duce petrol use by establishing a system oftradable credits for fuel economy improve-ments. The trading of fuel economy cred-its was proposed in a report on fueleconomy (CAFE) standards issued by a Na-tional Academy of Sciences panel.

In the USA, the House-passed energybill, HR4, had stalled in the Senate pavingthe way for a rival piece of legislationdrafted by the Democrats to be intro-

duced for debate. The Senate Democraticenergy bill will try to push a comprehen-sive energy plan, which aims to balanceenergy production and energy efficiency,while avoiding drilling in the ANWR,promoting renewable energy and increas-ing efficiency standards in appliances. Theprovision also aims to open internationalmarkets for US clean energy technologies;expand climate change science programmesand fund research and development fortechnologies to reduce greenhouse gases.

The European Commission has pub-lished its plans for regulatory and fiscalmeasures to promote biofuels as a first steptowards encouraging the take up of alter-native fuels in the transport sector.

The OPEC Secretariat established its own Environmen-tal Task Force (ETF) in 1994 to monitor developmentsin the field of energy use and the environment. Itsprincipal objective is to keep OPEC’s Ministers continu-ously informed about the status of the energy/environ-mental debate, as it affects the Organization and itsMember Countries. The ETF’s work is also seen asadding impetus and authority to the discusssions at high-level meetings involving OPEC.

A Quarterly Environmental Report (QER) is circu-lated to Member Countries, in which the ETF reviewsrecent activities in the various international environ-

mental fora, monitors changes in energy taxation, andprovides background information on relevant forth-coming events, etc. Although this is an internalOPEC document, selected extracts from the publicationappear regularly in the OPEC Bulletin for the benefitof a wider readership.

This month’s selection comes from the QER publishedat the end of the fourth quarter of 2001. It features thehighlights of the issue (below), which include the SeventhSession of the Conference of the Parties (COP7) inMarrakech, Morocco, in November 2001, and a calen-dar of events.

Seventh Session of the Conferenceof the Parties (COP7) is held in

Moroccan city of Marrakech

Issue highlights

I

30 OPEC Bulletin

E N V I R O N M E N T N O T E B O O K

April 26, 2002AltEnergy 2002

Edmonton, Alberta, Canada. AltEnergy2002 is a national conference focusingon the important field of renewable andsustainable energy. This conference willprovide the alternative energy commu-nity with an opportunity to review newresearch and technologies and exchangeideas and information that will helpfurther the industry. For more informa-tion, contact: Linda McCaffrey. Tel: +1403 258 0705; e-mail: expos@uniglobe-tradeshows.com; Web site: www.altenergy2001.org.

May 13–14, 2002Sustainability, trade andenvironment

Chatham House, London, England.Further to the successful agreement inNovember of the start of a new traderound at the WTO ministerial meetingin Doha, this conference will provide anopportunity to discuss with the keyplayers on the trade and environmentscene the major issues arising from theDoha Declaration. Topics will also in-

clude: multilateral environmental agree-ments; developments in dispute settle-ment; institutional challenges; investmentand services; agriculture and fisheries andthe role and position of developing coun-tries. For more information, contact: TheRoyal Institute of International Affairs,Chatham House 10 St James’s Square,London SW1Y 4LE, UK. Tel: +44 (0)207957 5754/00; fax: +44 (0)20 721 2045/7957 5710; e-mail: gwright@riia.org.

May 19–24, 2002Energex 2002

The 9th International Energy Conferenceand Exhibition, Cracow, Poland. Organ-ized by the Mineral and Energy EconomyResearch Institute and the InternationalEnergy Foundation, this conference andaccompanying exhibition have becomerecognized as the leader in promotinginternational transfer of technology inthe field of energy. Energex 2002 aimsto provide the opportunity for engineersand researchers to promote scientificand technological co-operation. Topics tobe covered include new and renewablesources of energy, clean coal technologies,oil and gas, nuclear energy, environmental

Calendar of meetings

control and waste recycling (includingclimate change), energy policies andeconomics, and rational use of energy.For more information, contact: Dr LidiaGawlik, Mineral & Energy EconomyResearch Institute, 30-950 Krakow 65,PO Box 49, Poland. Tel: +48 12 63227 48; fax: +48 12 633 50 47; e-mail:energex@min-pan.krakow.pl.

June 5–14, 200216th Sessions of the SubsidiaryBodies

Bonn, Germany (to be confirmed). Formore information, contact: UnitedNations Framework Convention onClimate Change (FCCC) Secretariat,Haus Carstanjen, Martin-Luther-King-Strasse 8, D-53175 Bonn, Germany.Tel: +49 228 815 1000; fax: +49 228815 1999; e-mail: secretariat@unfccc.de; Web site: www.unfccc.de.

June 17–21, 200212th European Conference andTechnology Exhibition on Biomassfor Energy Industry and ClimateProtection

The European Commission has askedall 15 EU states to ratify the Kyoto Pro-tocol before the World Summit on Sus-tainable Development (Rio+10) inJohannesburg in September. The EU’sgoal is for all member states to ratify theProtocol by June 14, 2002.

Ireland recently approved a C–– 640

million (£395 million) plan to build theworld’s largest offshore wind farm, capa-ble of generating 520 megawatts of elec-tricity.

Norway and Sweden have officiallyrejected the use of sinks in their imple-mentation of the Kyoto commitments.

During COP7 in Marrakech, the

Norwegian Minister of the Environmentannounced the global gas flaring reduc-tion initiative, jointly funded by theNorwegian Government and the WorldBank. This initiative aims to support thepetroleum industry and national govern-ments in their efforts to reduce flaring(and venting) of gas.

March 2002 31

E N V I R O N M E N T N O T E B O O K

Amsterdam, Netherlands. Organized bythe Energy Transport Agriculture (ETA)organization, topics at this year’s con-ference include biomass resources, re-search and development of bioenergyconversion technology resources, dem-onstration and market implementationof bioenergy in the heat and electricitysector, demonstration and market im-plementation of bioenergy in the trans-portation sector, combined applicationof biomass for energy, products andclimate protection, strategy and policyissues, and biomass in the developingworld. For more information contactthe ETA. Tel: +39 055 5002174; Website: www.etaflorence.it.

June 24–27, 2002Second world congress of environ-mental and resource economists

Monterey, California, USA. The four-day programme will consist of plenarysessions with keynote speakers, parallelsessions with contributed papers, andsome sessions with invited papers orpanels on topics of special interest. Thekeynote speakers are Kenneth Arrow,Partha Dasgupta, Daniel McFadden,and Martin Weitzman. Contact:Michael Hanemann (Conference Chair),University of California, Berkeley, 207Giannini Hall #3310, Berkeley, Cali-fornia 94720-3310, USA. Tel: +1 510642 2670; fax: +1 510 845 8639; e-mail: hanemann@are.berkeley.edu;Web site: weber.ucsd.edu/~carsonvs.

September 2–11, 2002World Summit on SustainableDevelopment (RIO+10)

Johannesburg, South Africa. The World

Summit on Sustainable Development willcarry out a ten-year review of progress inimplementing the outcome of the UNConference on Environment andDevelopment held in Rio in 1992. TheSummit will aim to reinvigorate theglobal commitment to sustainable devel-opment at the highest level. For moreinformation please contact: AndreyVasilyev, DESA, New York. Tel: +1 212963 5949; e-mail: vasilyev@un.org. Ma-jor groups contact: Zehra Aydin-Sipos,DESA. Tel: +1 212 963 8811; e-mail:aydin@un.org; Web site: www.johannesburgsummit.org.

September 30–October 4, 20026th International Conference onGreenhouse Gas ControlTechnologies

Kyoto, Japan. Organised by ResearchInstitute of Innovative Technology for theEarth, IEA Greenhouse Gas R&D Pro-gramme and Japan Society of Energy andResources (JSER). The aim of this confer-ence is to provide a forum for the discus-sion of the latest advances in the field ofgreenhouse gas control technologies, in-cluding capture, storage and utilisation ofcarbon dioxide. Other mitigation options,such as efficiency increase and use of re-newable sources of energy are also in-cluded, as well as options for non-CO

2

greenhouse gases, policy and economicmeasures and social impacts, in a series ofparallel sessions. GHGT6 is the foremostconference bringing together the interna-tional community to discuss greenhousegas control technology, putting the differ-ent measures in context with each other asmitigation options. For further informa-tion see Web sites: www.ieagreen.org.ukor www.rite.or.jp/GHGT6.

October 23–November 1, 20028th Session of the Conference ofthe Parties

New Delhi, India (to be confirmed).For more information: FCCC Secre-tariat. Tel: +49 228 815 1000; fax: +49228 815 1999; e-mail: secretariat@unfccc.de; Web site: www.unfccc.de.

May 14–16, 2003Energy & the environment 2003

Halkidiki, Greece. International Con-ference on Sustainable Energy, Plan-ning & Technology in Relationship tothe Environment. Details: GabriellaCossutta, Conference Secretariat, En-ergy and the Environment, WessexInstitute of Technology, Ashurst Lodge,Ashurst, Southampton, SO40 7AA, UK.Tel: +44 (0)238 029 3223; fax: +44 (0)238029 2853; e-mail: gcossutta@wessex.ac.uk; Web site: www.wessex.ac.uk.

June 2–13, 2003Sessions of the Subsidiary Bodies

Bonn, Germany (to be confirmed).Contact: FCCC Secretariat. Tel: +49228 815 1000; fax: +49 228 815 1999;e-mail: secretariat@ unfccc.de; Web site:www.unfccc.de.

December 1–12, 20039th Session of the Conference ofthe Parties (to be confirmed)

Contact: FCCC Secretariat. Tel: +49228 815 1000; fax: +49 228 815 1999;e-mail: secretariat@ unfccc.de; Web site:www.unfccc.de.

32 OPEC Bulletin

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

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

Year-to-date averageJanuary 02 February 02 2001 2002

Reference Basket 18.33 18.89 24.66 18.58Arabian Light 18.83 19.47 23.43 19.11Dubai 18.54 19.02 23.55 18.75Bonny Light 19.65 20.30 26.30 19.94Saharan Blend 19.64 19.73 26.84 19.68Minas 18.88 18.91 24.74 18.89Tia Juana Light 15.37 16.05 23.01 15.67Isthmus 17.42 18.74 24.73 18.00

Other crudesBrent 19.48 20.22 26.36 19.81WTI 19.71 20.67 29.45 20.13

DifferentialsWTI/Brent 0.23 0.45 3.09 0.32Brent/Dubai 0.94 1.20 2.81 1.06

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

Crude oil price movements

The monthly price of OPEC’s ReferenceBasket2 rose for the second consecutivemonth in February, recovering from theslump that had started in September lastyear and had brought down the averagemonthly Basket price by $6.80/barrel, oralmost 28 per cent, in just three months.The Basket regained 56¢/b, or 3.1 percent, with respect to the previous month;however, on a year-on-year basis, it stoodan amazing 25.7 per cent lower. Chrono-logically, the Basket started the monthrising by a marginal 14¢/b, to average$18.44/b in the first week; it firmed evenfurther during the second week, whenit gained another 70¢/b to finish at$19.14/b. The Basket then suffereda setback, falling in the third week by35¢/b; however, it recovered towardsthe month-end, when it gained 39¢/b toaverage $19.18/b. Looking at the sevencrudes that compose the Reference Basket,we find that they all registered gains, withIsthmus and Tia Juana Light leading therises with $1.32/b and 68¢/b; Bonny Lightand Arabian Light followed, increasing by65¢/b and 64¢/b, respectively. Dubai andthe Brent-related crude, Saharan Blend,firmed by 48¢/b and 9¢/b during themonth. Finally, Minas posted the smallest

gain, rising by a marginal 3¢/b to average$18.91/b (see Table A).

Crude oil prices started the monthoscillating within a $1/b range and react-ing to bearish as well as bullish news;however, they failed to move distinctly ineither direction, as the immediate outlookremained obscure. On the positive side,prices firmed on news of a big explosionin an oil-gathering centre in Kuwait, withfirst reports citing a production loss of asmuch as 600,000 b/d, and bullish APIstock data which showed better-than-ex-pected figures. Later on, prices gave upsome of the gains, after Kuwait announcedthat other facilities would compensate forany loss in production and that exportswould not be affected at all. Topping thebearish news was a much larger crude oilinventory build-up reported by the USDepartment of Energy’s Energy Informa-tion Administration, that triggered a sell-off in the futures markets later in the week.During the second week, crude oil pricesfirmed further, supported by news that amajor oil company was awarded a buyingtender by the US Administration to de-liver 18.6 million barrels of crude oil to theUS Strategic Petroleum Reserve (SPR).The announcement by the winner (Shell),that it had potential demand for the entireMarch Brent programme, raised concernover a possible play in the physical Brent

February1

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.

market. Meanwhile, rising tensions be-tween the USA and Iraq overshadowedbearish weekly US inventory data andunleashed a wave of short-covering, asspeculators rushed to close their big shortpositions.

Crude oil prices experienced severalupturns and downturns during the thirdweek, moving higher at the beginning ofthe week, then being pulled down andfinally recovering; but the late rise was notsufficient to put prices in positive terri-tory, with respect to the previous week.Weak short-term fundamentals constitutedthe main factor which put pressure onprices. Meanwhile, comments by theRussian Energy Minister, Igor Yusufov,raised concern, as they were interpreted asloosening Russia’s commitment to itspledged export cuts. A draw on US crudeand product inventories lent support toprices later in the week. Towards the endof the month, prices strengthened, post-ing hefty gains amid better-than-expectedproduct stock figures. Meanwhile, the ever-present tension between some Westernnations and some Middle East major pro-ducers continued to raise worries in themarket. During the week, markets wereconcerned about the United Kingdom’sstrong stance towards Iraq. The tense situ-ation between white-collar oil workers andthe Venezuelan Government over the ap-

March 2002 33

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

pointment of a new board of directors ofthe national oil company, Petroleos deVenezuela, lent upside support to prices.

US and European marketsSupplies of sour crude grades dwin-

dled in the US Gulf Coast as volumes ofIraqi crudes were sent east, where theretroactive price regime imposed by theUnited Nations is not in effect. Adding tothe tightness in sour grades were the out-put cuts implemented by OPEC at thebeginning of the year. All this resulted ina shrinking sweet crude premium oversour grades, encouraging refiners to switchto sweet grades. The prospect of a newtrading play on dated Brent, after Shellannounced that it had enough demand forthe entire March Brent programme, re-duced the USA’s interest in North Sea, aswell as West African, grades priced againstthe benchmark.

With unworkable refiners’ margins inthe US Gulf Coast, refinery throughputdeclined by more than three per cent justin the last week of February and stood at85.9 per cent. Likewise, crude runs fell bymore than 900,000 b/d on a year-on-yearbasis to 13.98m b/d. The contraction inrefiners’ demand became evident, whenan independent refiner tried to resell IraqiBasrah Light and Kirkuk crudes in thesecond half of the month. At mid-month,trade in North Sea grades came to a stand-still, as the market waited to see Shell’smove on physical Brent. The overhang ofother North Sea grades widened the pre-mium to an artificially inflated dated Brent;nevertheless, high crude prices and weakproduct demand still squeezed refiners’margins in the area. Deteriorating refin-ers’ margins in the Mediterranean limiteddemand for Russian crude.

Far Eastern marketsAt the beginning of the month, the

incoming arbitrage cargoes to the Asia-Pacific partially offset cuts in term con-tracts by major regional producers, bringinga bearish mood to Middle East Gulf grades.The approach of the heavy maintenanceseason, that coincided with the end-of-winter demand for distillate-rich grades bykey refiners in North-East Asia, pushedlight sour crudes into big discounts totheir official selling price (OSP). Regionaldistillate-rich grades also weakened. Ma-

regional refinery run cuts, causing tight-ened supply and inducing a recovery inrefiners’ margins; this was in contrast totheir counterparts in the US Gulf andRotterdam, thereby encouraging more dis-cretionary cutting of refinery output in theformer centre, due to poor economics(see Table B).

US Gulf marketThe average gasoline price for Febru-

ary was almost stable, compared with theJanuary level, although US gasoline stockshad fallen by nearly 3m b, indicating clearlythat supply was lagging behind demand.The modest rise in demand did not spurany large rises in the gasoline price, due totwo principal factors: the first was thesurpassing of gasoline stock levels on a

Table C: Refinery operations in selected OECD countries

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

Dec 01 Jan 02 Feb 02 Dec 01 Jan 02 Feb 02

USA 15.03 14.67 14.61 90.9 88.5 88.2France 1.74 1.64 1.60 92.0 86.3 84.5Germany 2.21 2.14R 2.18 98.0 94.9R 96.4Italy 1.82 1.74 1.87 77.4 76.4 82.2UK 1.67 1.62 1.67 94.4 91.1 93.6Eur-162 12.31R 11.98R 12.27 90.0R 87.7R 89.9Japan 4.22 4.35 n.a 85.1 91.0 n.a

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.

laysia’s light sweet Tapis softened, afterthe March buying programmes ended.The last March cargoes were traded at asingle premium to the OSP, compared withthe strong 20–30¢/b premium earlier inthe month.

Product markets andrefinery operations

Product prices in the Atlantic basin mar-kets in February displayed modest gains,light product value increases were largelyled by crude price gains, and the prices ofthe heavy end of the barrel rose on tightsupply. Product prices in Singapore en-joyed large rises on the Shuaiba refineryoutage in Kuwait, on top of widespread

Table B: Selected refined product prices $/b

Change Dec 01 Jan 02 Feb 02 Feb/Jan

US GulfRegular gasoline (unleaded) 21.35 22.63 22.65 +0.02Gasoil (0.2%S) 21.02 21.43 21.76 +0.33Fuel oil (3.0%S) 14.68 14.77 15.22 +0.45

RotterdamPremium gasoline (unleaded) 19.16 20.76R 20.83 +0.07Gasoil (0.2%S) 21.35 21.67R 21.81 +0.14Fuel oil (3.5%S) 14.95 15.25 15.52 +0.28

SingaporePremium gasoline (unleaded) 22.61 20.95 24.11 +3.17Gasoil (0.5%S) 20.11 20.94 21.76 +0.82Fuel oil (380 cst) 16.44 16.19 17.14 +0.95

34 OPEC Bulletin

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

technicals showed that the market wasoversold. However, prices quickly wentthrough a corrective mode later in theweek, especially as the statistics released bythe US Department of Energy were inter-preted by the market as bearish. Weakproduct prices kept weighing on crudeprices, but support came from the firm-ness of the back month.

In the second week of February, sen-timent overpowered fundamentals. De-spite a sharp downward revision to 500,000b/d for global demand growth in 2002 bythe International Energy Agency andbearish US stock data, which showed abuild of 4.7m b in crude oil inventories,NYMEX WTI gained $1.6/b during theweek. A diminishing gasoline supply sur-plus made the market more responsive torefinery disruptions, especially as thechange from winter to summer specifica-tions was approaching.

Talk of a plan in the Brent market toship this crude to the US Strategic Petro-leum Reserve set off another uptrend whichinitiated a technical rally, and funds startedto move out of their short positions. Extraimpetus came from concern over possibleUS military action against Iraq, at a timewhen non-commercials and speculatorswere still substantially short. Evidence offactoring-in the supply disruption wasshown by a narrowing of the March/Aprilspread.

The possibility of US military actioncontinued to support prices in the thirdweek, especially as funds fled from themarket. Non-commercials also closed theirshort positions in product markets(unleaded gasoline and heating oil). Fun-damentally, the crude oil market wasoverpriced, and the only dip in pricesduring the week was due to the collapseof the March/April spread.

There were upside and downside riskfactors at the end of the month. On thedownside, the risks related to economicprospects and OPEC’s compliancewere eliminated, while only that ofRussia’s production remained; on theupside, the number of short non-commercial positions was lowered, therebyeliminating any rally on their account.However, the risk of US military actiongave prices momentum towards the end ofthe month. WTI finished February at$21.74/b.

yearly basis by about five per cent; and thesecond, most importantly, was the confi-dence of the market about US refinerycapabilities to gear up their gasoline out-put if the margins were right, even withstricter summer gasoline specifications,given the two years of experience in pro-ducing this type of gasoline. The middleof the barrel followed crude price gains,although increasing moderately. There-fore, gasoil rose by 33¢/b. This was despitewarmer-than-usual weather and the shiftof the market’s focus to gasoline, spurringrefiners to maximize gasoline productionat the expense of other products thatbecame less well-supplied. It also affectedhigh-sulphur fuel oil (HSFO) output, squeez-ing the already tight market, as the startof two new cokers, with a total capacity of1.8m b/month, in recent months atExxon’s Baytown, Texas, and Marathon’sGaryville, Louisiana, refineries, togetherwith the export of several cargoes to the FarEast, enhanced the fuel oil price by 45¢/b(see Table B).

The margins of the marker crude, WestTexas Intermediate (WTI), turned nega-tive, as its strong price outstripped modestproduct price increases.

US refinery throughput continued tomove down as a result of deterioratingmargins, a factor which first emerged inthe second quarter of 2001. It declined bya marginal 55,000 b/d below its Januaryruns to around 14.61m b/d, equivalent toan 88.2 per cent utilization rate, whichwas 2.4 percentage points lower than theprevious year’s figure (see Table C).

Rotterdam marketAlthough product market fundamen-

tals in Europe were weak in February,product prices posted gains, driven essen-tially by rising crude prices. The averagegasoline price climbed by 7¢/b, despitesustained weak regional demand. Gasoilincreased by 14¢/b, assisted in part by thetight Mediterranean market in the firsthalf of the month, following a refineryoutage in southern France, althoughwarmer weather across the continent de-pressed end-user demand. The HSFO pricerose by 28¢/b, attributed partially toarbitrage trading to the Asian market,together with solid bunker demand (seeTable B).

Refiners’ margins for Brent worsened

further, moving deeper into negative ter-ritory, resulting from the faster rise incrude prices than product prices.

Refinery throughput in Eur-16 (EUplus Norway) registered 12.27m b/d, anincrease of 290,000 b/d above the Januarylevel. Furthermore, the equivalent utiliza-tion rate approached 90 per cent, whichwas 1.5 percentage points higher than thepreceding year’s figure (see Table C).

Singapore marketProduct markets in Singapore, gaso-

line in particular, enjoyed significantstrength during February, owing, to a largeextent, to the outage of the 200,000 b/dShuaiba refinery in Kuwait for almost twoweeks, eliminating product exports toSingapore and thus causing rises in naph-tha and gasoil prices. An increase in thenaphtha value and robust demand fromIndonesia and Vietnam, at a time of lowexports from Chinese refineries, were theunderlying factors behind gasoline soar-ing by $3.17/b. The distillate market, onthe other hand, was better supplied; con-sequently, the effect of the outage ofKuwait’s refinery was mitigated and gasoilgained 82¢/b. A combination of OPEC’scontinued output restraint, mostly com-prising sour crudes, and persistently lowerregional refinery throughput, resulted ina tightly supplied market that pushed upthe HSFO price by 95¢/b.

The relative weakness of Dubai’s pricein Singapore, compared with other worldmarker crudes, coupled with the surge inthe gasoline price, as well as modest in-creases in other product prices, were themain reasons for the recovery in refiners’margins from negative territory. None-theless, their values fluctuated aroundbreak-even point (see Table B).

As usual in January, refinery through-put in Japan rose by almost 130,000 b/dto an average of 4.35m b/d in January.Hence, the equivalent utilization rate wasalso boosted to 91 per cent, which wasalmost at parity with last year’s level (seeTable C).

The oil futures market

NYMEX WTI started February with asharp rise of 90¢/b, on the back of im-proved US economic indicators and as

March 2002 35

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

The tanker market

OPEC area spot-chartering increased bya marginal 1.33m b/d to a monthly aver-age of 11.52m b/d in February. However,compared with the same period last year,the level of OPEC fixtures was 500,000b/d lower, due to production restraint.Meanwhile, non-OPEC spot-charteringsurged by a remarkable 4.09m b/d to11.40m b/d in February, almost matchingthe level of OPEC fixtures. Consequently,global spot fixtures moved 5.42m b/dhigher to 22.92m b/d, which exceeded thecorresponding month of 2001 by 1.58mb/d. OPEC’s share of global spot-charter-ing, therefore, plunged by 7.95 percentagepoints to only 50.27 per cent, and thislevel was 6.08 percentage points below theprevious year’s.

Most of the increment in OPEC char-tering during February was attributed toa rise in spot fixtures from the Middle Easton the westbound long-haul route of170,000 b/d to 1.44m b/d; however, onthe eastbound route, fixtures declined by1.05m b/d to 3.67m b/d. Hence, theMiddle East’s eastbound share of OPEC’stotal fixtures worsened considerably, by14.45 percentage points to 31.83 per cent,while the westbound share improvedslightly, by 0.07 percentage points to 12.54per cent; together, they accounted for 44.37per cent of total chartering in the OPECarea, which was 14.39 percentage pointsbelow the previous month’s level. Prelimi-nary estimates of sailings from the OPECarea decreased by 4.60m b/d to a monthlyaverage of 23.85m b/d.

Sailings from the Middle East alsodeclined, by 1.96m b/d to a monthlyaverage of 16.54m b/d, and that was about70 per cent of total OPEC sailings. Arriv-als in the US Gulf Coast, East Coast andthe Caribbean declined in February by1.43m b/d to a monthly average of 7.59mb/d, while arrivals in North-West Europeand Euromed edged lower by 50,000b/d to 6.71m b/d and 680,000 b/d to5.46m b/d, respectively. Estimated oil-at-sea on February 24 was 474m b, which was43m b above the level observed at the endof last month.

Although the VLCC market in theMiddle East was active due to increasedfixture volumes, especially in the third

week of February, freight rates movedslowly in both directions, amid pessimisticsentiment about the future of the market,in the wake of OPEC’s production re-straint. Furthermore, the amount of ton-nage available in the region for the next 30days, which had increased noticeably,together with aggressive relets from SouthKorean and Japanese oil companies, pre-vented spot tanker-owners from raisingrates too much. Thus, VLCC rates on theMiddle East eastbound long-haul routemoved just three points higher to a monthlyaverage of Worldscale 51, while, on thewestbound route, they softened by fourpoints to W39. The Suezmax market acrossthe Atlantic was steady; however, activeVLCC fixtures from West Africa andNorth-West Europe to US destinations,with the announcement by the USA thatit would restock its Strategic PetroleumReserve, put downward pressure onSuezmax freight rates. Hence, the monthlyaverage freight rates for Suezmax tankersoperating on the routes from West Africaand North-West Europe to the US Gulfand East Coasts softened by three pointseach, to W63 and W66, respectively.Aframax freight rates for tankers operatingon short-haul routes displayed mixedtrends in February. The monthly averagerates along the Caribbean/US East Coastand Mediterranean/North-West Europeroutes improved by 26 points to W150and six points to W127, respectively, dueto a surge in the volume of fixtures.However, freight rates fell by seven pointsto W120 on the route across the Mediter-ranean, amid a sizable reduction in Iraqioil exports from the Turkish port ofCeyhan. Freight rates for 70–100,000 dwttankers, on the route from Indonesia tothe US West Coast, declined by 11 pointsto W103.

Clean tanker freight rates improvedalong the routes from the Middle East andSingapore to the Far East, rising by 19points to W173 and by four points toW176, respectively, amid sustained prod-uct fixtures, as the Asian market started topick up. On the route across the Mediter-ranean, rates increased by 14 points toW166, while, on the route from the Medi-terranean to North-West Europe, theysoftened by two points to W168, due toan upturn in demand for shipments in theMediterranean and less enquiries from

Europe. However, product trade to USdestinations slowed down, prompting ratesto decrease by 20 points to W162 on theCaribbean/US Gulf Coast route and byfive points to W168 on the route fromNorth-West Europe to the US East Coast.

World oil demand

Estimate for 2001

WorldSignificant modifications have been

applied to the 2Q and 4Q figures since thelast report, mainly due to adjustments tothe most up-to-date data relating to allregions. An upward revision to the 2Qestimates is due principally to adjustmentsto the projected demand in the FSU andChina. Significant upward revisions todeveloping countries and OECD demand,partly offset by a significant downwardrevision to projected consumption inChina, have contributed to an upwardrevision to the fourth-quarter data. Year-2001 consumption is, therefore, estimatedto average 75.88m b/d, nearly 80,000b/d higher than that of 2000. On a re-gional basis, demand is estimated to havedecreased by 140,000 b/d in the OECD.However, it is expected to have risen by160,000 b/d in ‘Other regions’ (the formerCPEs), due solely to increases in FSUconsumption, and by 60,000 b/d in thedeveloping countries.

On a quarterly basis, compared withthe year-earlier figure, world demand grewby 1.0 per cent, or 724,000 b/d, to average76.63m b/d in 1Q. It is estimated to havegrown by 0.9 per cent, or 631,000 b/d, toaverage 74.70m b/d in 2Q. The 3Q and4Q, however, are expected to have expe-rienced negative growth. The reasons aredecelerating economic growth in 3Q and4Q and declining aviation fuel consump-tion in 4Q. The 3Q demand is now es-timated at 75.67m b/d, which is about501,000 b/d, or 0.7 per cent, less than thatof 3Q00. Likewise, 4Q demand is esti-mated at 76.52m b/d, nearly 529,000b/d, or 0.7 per cent, less than that of theyear before.

OECDHaving grown by as little as 0.3 per

cent in 2000, OECD product deliveries

36 OPEC Bulletin

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

posted a decline of 141,000 b/d, or 0.29per cent, to average 47.69m b/d in 2001.This drop is the sum of a 206,000 b/ddecline, a 146,000 b/d rise and a 82,000b/d decline in North America, WesternEurope and the OECD Pacific, respec-tively. The considerable declines in 3Qand, especially, 4Q are behind the yearlydrop in demand in the OECD. In addi-tion to weakening GDP growth rate pros-pects in the OECD Pacific, the estimatedlower aviation fuel consumption, espe-cially in the USA, has been responsible forthe overall lower demand in the region.

The total OECD oil requirement in4Q01 demonstrated a significant 684,000b/d, or 1.41 per cent, decline, comparedwith the same period in 2000. This wasthe net result of drops of 776,000 b/d, or3.18 per cent, in North America and20,000 b/d, or 0.23 per cent, in the OECDPacific, which were partly offset by a riseof 112,000 b/d, or 0.73 per cent, in OECDEurope.

Developing countriesOil demand in developing countries is

now expected to experience a minor riseof 60,000 b/d, or 0.32 per cent, to average18.84m b/d for the year. The estimatedgrowth rate in consumption has been re-vised up slightly for the Asian group ofcountries from the previous 0.25 per centto 0.46 per cent. The fundamental factorbehind the lack of growth in demand isthat Asian regional GDP is projected togrow at a lower-than-anticipated rate.These economies are highly export-de-pendent and are extremely reliant uponthe health of their trading partners. Thedemand growth rates for Middle East andAfrica have also been revised up. However,the demand growth rate for Latin Americahas been revised down.

Other regionsApparent demand in the ‘Other re-

gions’ is projected to grow by 157,000 b/d,or 1.71 per cent, to average 9.34m b/d for2001; this is lower than the previous pro-jection of 9.43m b/d. Revisions to tradeand production data for the first quartershow that apparent FSU demand grew by7.01 per cent, or 259,000 b/d, comparedwith the year-earlier figure. The latest as-sessments indicate that there has beengrowth of 2.92 per cent, or 107,000 b/d,in 2Q. Estimates also indicate a significantrise of 7.11 per cent, or 251,000 b/d, inapparent consumption in 3Q, followed byanother considerable increase of 5.86 percent, or 246,000 b/d, in 4Q. During 1Qand 2Q, net exports were 335,000 b/d, or8.45 per cent, and 581,000 b/d, or 14.08per cent, higher than in the correspondingquarters of 2000. The 3Q and 4Q couldhave registered substantial gains of 364,000b/d, or 8.15 per cent, and 329,000 b/d,or 8.21 per cent, respectively. The overallyearly average rise in FSU net oil exportsin 2001 would, therefore, be a substantial403,000 b/d, equivalent to 9.72 per cent.Favourable oil prices and the need formore revenue, in order to service inter-national loans, seem to be the motivesbehind consistently rising exports. Indig-enous production and trade data for thefirst three months of the year show aconsiderable drop in Chinese apparentconsumption. According to the latest fig-

ures, apparent demand declined by355,000 b/d, or 7.53 per cent, during 1Q.Even though the decline seems huge, oneshould not forget that this comparison ismade with 1Q00, when demand surgedby record levels. 2Q apparent demand,however, demonstrated a significant riseof 594,000 b/d, or 13.59 per cent. Thiswas in line with the considerable recoveryin total imports, which registered an im-pressive 44.46 per cent rise in 2Q. 3Qconsumption registered a 243,000 b/d, or4.96 per cent, decline, followed by a simi-lar decline of 211,000 b/d, or 4.45 percent, in 4Q.

Forecast for 2002Although all quarterly averages have

been adjusted, the average 2002 worlddemand forecast has undergone littlechange, and is now 76.23m b/d, com-pared with the previous forecast of 76.16mb/d. The average yearly increment hasremained basically the same and now standsat 346,000 b/d, or 0.46 per cent, com-pared with the 347,000 b/d, equivalent to0.46 per cent, as mentioned in the previ-ous report.

The estimated growth level for 2002is significantly higher than for 2001. How-ever, this assessment is subject to furtheradjustment, as more information becomesavailable on major factors, such as theeconomic growth outlook, the trend in airtravel and aviation fuel consumption, and

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 4.71 4.83 4.34 4.5520022 4.95 5.32 5.04 4.94 5.06

1. Estimate.2. Forecast.

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

Feb 02/2000 3Q01 4Q01 2001 Jan 02* Feb 02* Jan 02

Algeria 808 831 810 820 785 775 –10Indonesia 1,278 1,209 1,175 1,214 1,142 1,145 3IR Iran 3,671 3,706 3,481 3,665 3,353 3,314 –39Iraq 2,552 2,487 2,559 2,383 2,255 2,447 192Kuwait 2,101 2,012 1,949 2,032 1,859 1,828 –31SP Libyan AJ 1,405 1,366 1,308 1,361 1,262 1,268 6Nigeria 2,031 2,087 2,113 2,097 1,987 1,947 –40Qatar 698 691 634 683 598 589 –10Saudi Arabia 8,248 7,914 7,546 7,920 7,228 7,121 –107UAE 2,251 2,122 2,034 2,163 1,944 1,934 –10Venezuela 2,897 2,801 2,703 2,831 2,577 2,559 –18

Total OPEC 27,940 27,227 26,311 27,169 24,990 24,926 –65

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

March 2002 37

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

prices. On a regional basis, the highestaverage yearly volume growth is forecast at171,000 b/d, or 0.91 per cent, for thedeveloping countries, followed by 122,000b/d, or 1.30 per cent, for ‘Other regions’and 53,000 b/d, or 0.11 per cent, for theOECD.

World oil supply

Non-OPEC

Figures for 2001The 2001 non-OPEC supply figure

has been revised up by 20,000 b/d to46.55m b/d, compared with the last re-port. The quarterly distribution figure for1Q remains unchanged at 46.23m b/d,while the other three quarters have beenrevised up by 60,000 b/d to 46.03m b/d,down by 20,000 b/d to 46.62m b/d andup by 30,000 b/d to 47.30m b/d, respec-tively. The yearly average increase is esti-mated at 770,000 b/d, compared with the2000 figure.

Expectations for 2002Our 2002 non-OPEC supply forecast

has been revised up since the last report,by 180,000 b/d to 47.64m b/d. This is anincrease of 1.09m b/d, compared with theestimated 2001 figure. The 2002 quar-terly distribution is estimated at 47.61mb/d, 47.17m b/d, 47.61m b/d and 48.18mb/d, respectively.

The FSU’s net oil export estimate for2001 has been revised down by 20,000b/d to 4.55m b/d, compared with the lastreport. Our forecast for 2002 has beenrevised up by 20,000 b/d to 5.06m b/d(see 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 3.26m b/d, respectively.

OPEC NGL production — 1998–2002m b/d

1998 3.011999 3.072000 3.231Q01 3.242Q01 3.243Q01 3.24

Western EuropeCommercial onland oil stocks in Eur-

16 continued to display an unseasonablebuild in February, when they rose by afurther 9.5m b, or a rate of 340,000 b/d,to stand at 1,066.6m b. Crude oil and totalmajor products contributed to this risenearly equally, climbing by 4.9m b to432.7m b and by 4.6m b to 633.9m b,respectively.

High imports, mainly from West Af-rican, Iraqi and Russian grades, were be-hind the build in crude oil stocks. Thedownturn in transatlantic North Sea ex-ports also contributed to this increase.Most of the growth in total major prod-ucts occurred with gasoline and distillates,which rose by 3.0m b to 159.0m b and by3.5m b to 337.6m b, respectively. Weakdemand at the same time, with an increaseof 300,000 b/d in refinery throughput,encouraged stock-building in Europe.Total oil stocks were 9.5m b higher thanthe year-earlier level (see Table G).

JapanIn January, commercial onland oil

stocks witnessed a further draw of 11.4mb, or a rate of 370,000 b/d, to 170.6m b.Lower crude oil imports from the MiddleEast, on account of OPEC’s productioncuts, as well as increasing refinery through-put ahead of the seasonal shut-downs inthe second quarter, pushed crude oil downby a considerable 13.1m b to 100.3m b.However, a marginal increase of 1.6m bto 70.2m b in total product inventories,mainly in gasoline, which rose by 1.8m bto 14.1m b, reduced the overall draw.Total oil stocks were 5.9m b, or aboutthree per cent, lower than the year before(see Table H).

Balance of supply/demand

For 2001, both world oil demand andnon-OPEC oil supply have been revisedup by less than 100,000 b/d and areestimated at 75.9m b/d and 49.8mb/d, respectively. These revisions haveresulted in a yearly average difference of26.1m b/d, up by less than 100,000b/d, compared with the last report, withquarterly distributions of 27.2m b/d,25.4m b/d, 25.8m b/d and 26.0m b/d,respectively. The quarterly balances have

4Q01 3.242001 3.24Change 2001/2000 0.022002 3.26Change 2002/2001 0.02

OPEC crude oil productionAvailable secondary sources indicate

that, in February, OPEC output was24.93m b/d, which was 60,000 b/d lowerthan the revised January level of 24.99mb/d. Table E shows OPEC production, asreported by selected secondary sources.

Rig count

Non-OPECRig activity slowed in February. West-

ern Europe and Latin America were themost affected regions, witnessing drops of22 and 12 rigs, respectively, comparedwith January’s figures.

OPECOPEC’s rig count increased by ten to

246 in February, compared with January’sfigure.

Stock movements

USAUS commercial onland oil stocks lost

the previous month’s build, when theydeclined by 15.9m b, or a rate of 570,000b/d, to 1,001.4m b during February 1–March 1. Relatively healthy demand, es-pecially for gasoline, which improved bynine per cent, compared with last month,and decreasing distillate output, whichdeclined by 110,000 b/d, pushed distil-lates and gasoline down by 3.7m b to212.7m b and by 6.5m b to 130.8m b,respectively.

Also, fuel oil showed a slight decreaseof 2.8m b to 37.8m b, while jet kerosenestabilized at 40.5m b. Crude oil rose by1.2m b to 320.5m b, due to lower refineryruns and poor refiners’ margins. The overalllevel was 72.3m b higher than last year’sfigure.

During the same period, the USStrategic Petroleum Reserve (SPR) in-creased further by 5.5m b to 559.7m b,on the new ‘royalty-in-kind’ programme(see Table F).

38 OPEC Bulletin

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

Table F: US onland commercial petroleum stocks1 m b

ChangeJun 29, 01 Dec 28, 01 Feb 1, 02 Mar 1, 02 Feb/Jan Mar 1, 01

Crude oil (excl SPR) 310.7 309.9 319.3 320.5 1.2 280.4Gasoline 221.6 207.9 216.4 212.7 –3.7 205.8Distillate fuel 112.8 137.6 137.3 130.8 –6.5 117.2Residual fuel oil 42.5 40.9 40.6 37.8 –2.8 38.4Jet fuel 43.0 40.7 40.5 40.5 0.0 42.4Unfinished oils 90.4 90.6 92.0 90.1 –1.9 97.0Other oils 191.4 181.5 171.2 168.9 –2.3 147.9Total 1,012.4 1,009.2 1,017.3 1,001.4 –15.9 929.1SPR 543.3 549.0 554.2 559.7 5.5 541.7

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

Table G: Western Europe onland commercial petroleum stocks1 m b

ChangeSep 01 Dec 01 Jan 02 Feb 02 Feb/Jan Feb 01

Crude oil 436.61 435.96 427.85 432.74 4.89 415.74Mogas 144.63 151.81 155.98 158.95 2.97 154.56Naphtha 25.96 26.40 25.08 24.20 –0.88 23.02Middle distillates 323.40 331.20 334.05 337.58 3.53 337.55Fuel oils 120.97 119.08 114.21 113.17 –1.04 126.23Total products 614.96 628.49 629.32 633.90 4.58 641.36Overall total 1,051.57 1,064.45 1,057.17 1,066.64 9.47 1,057.10

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

Table H: Japan’s commercial oil stocks1 m b

ChangeJun 01 Sep 01 Dec 01 Jan 02 Jan/Dec Jan 01

Crude oil 127.3 118.0 113.4 100.3 –13.1 105.2Gasoline 14.3 13.8 12.3 14.1 1.8 14.6Middle distillates 33.6 45.7 37.8 37.2 –0.6 36.8Residual fuel oil 19.8 19.9 18.5 19.0 0.5 20.0Total products 67.7 79.5 68.6 70.2 1.6 71.3Overall total2 195.1 197.5 182.0 170.6 –11.4 176.5

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

been revised down by less than 100,000b/d to 900,000 b/d, 1.7m b/d, 1.4mb/d and 300,000 b/d, respectively. The2001 annual average balance is estimatedat 1.1m b/d. The 2000 balance has beenrevised down by less than 100,000 b/d to

1.1m b/d, compared with last month.For 2002, Table I shows an upward

revision to world oil demand of less than100,000 b/d to 76.2m b/d, while totalnon-OPEC supply has been revised up byless than 200,000 b/d to 50.9m b/d, re-

sulting in an expected annual difference ofaround 25.3m b/d, down by more than100,000 b/d, compared with the last re-port. The quarterly distribution is 25.8mb/d, 24.4m b/d, 25.0m b/d and 26.1mb/d, respectively.

March 2002 39

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

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 48.9 46.5 47.5 48.0 47.7 48.7 46.4 47.3 48.7 47.7

North America 23.1 23.8 24.1 24.2 23.7 24.0 23.7 23.9 24.1 23.9 24.0 23.9 24.0Western Europe 15.3 15.2 15.1 15.2 14.8 15.5 15.5 15.2 15.2 14.6 15.3 15.7 15.2Pacific 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 19.1 18.9 18.8 18.8 18.9 19.2 19.2 19.0FSU 4.3 4.0 3.8 4.0 3.8 3.8 4.4 4.0 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 5.0 4.6 4.5 4.6 4.5 5.0 4.6 4.5 4.7(a) Total world demand 73.8 75.2 75.8 76.6 74.7 75.7 76.5 75.9 76.7 74.8 75.9 77.5 76.2

Non-OPEC supplyOECD 21.8 21.3 21.9 21.8 21.6 21.8 22.3 21.9 22.3 21.8 21.9 22.2 22.0

North America 14.5 14.1 14.3 14.2 14.3 14.5 14.6 14.4 14.8 14.6 14.6 14.6 14.7Western Europe 6.6 6.6 6.7 6.8 6.5 6.6 6.9 6.7 6.7 6.5 6.5 6.8 6.6Pacific 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7

Developing countries 10.5 10.8 11.0 11.0 10.8 11.0 11.1 11.0 11.3 11.1 11.3 11.4 11.3FSU 7.3 7.5 7.9 8.3 8.5 8.6 8.8 8.5 8.8 9.0 9.2 9.4 9.1Other 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 3.3 3.3 3.3 3.3 3.3 3.4 3.3 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 47.6 47.2 47.6 48.2 47.6OPEC 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 49.3 49.9 50.5 49.8 50.9 50.4 50.9 51.4 50.9

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 77.5 76.4 77.1 76.9 77.0Balance2 1.5 -1.1 1.1 0.9 1.7 1.4 0.3 1.1

Closing stock level (outside FCPEs) m bOECD onland commercial 2698 2446 2527 2521 2596 2655 2617OECD SPR 1249 1228 1210 1210 1207 1206 1222OECD total 3947 3675 3737 3731 3803 3860 3840Other onland 1056 983 999 998 1017 1032 1027Oil on water 859 808 876 913 833 867 853Total stock 5861 5466 5612 5642 5654 5759 5719

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 80 79Memo itemsFSU net exports 3.0 3.4 4.1 4.3 4.7 4.8 4.3 4.5 4.9 5.3 5.0 4.9 5.1[(a) — (b)] 26.3 27.6 26.8 27.2 25.4 25.8 26.0 26.1 25.8 24.4 25.0 26.1 25.3

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 41, whileGraphs One and Two (on pages 40 and 42) show the evolution on a weekly basis. Tables Three to Eight, and the corresponding graphson pages 43–48, 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).

40 OPEC Bulletin

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

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

November 2001 to February 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

FebruaryJanuaryDecemberNovember11 22 33 44 11 22 33 44 11 22 33 44 11 22 33 44

$/barrel

55

March 2002 41

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

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

AlgeriaSaharan Blend (44.1) 27.80 24.82 25.65 28.47 28.16 24.82 25.96 26.13 20.65 19.00 19.08 19.64 19.37 20.21 19.53 19.82 19.73

IndonesiaMinas (33.9) 25.62 25.64 27.64 28.21 27.86 25.32 24.82 24.59 19.53 18.29 17.64 18.88 18.37 18.68 19.11 19.49 18.91

IR IranLight (33.9) 24.65 23.58 24.05 25.58 25.80 23.78 24.68 24.54 20.04 17.64 17.69 18.95 19.58 19.32 18.25 18.63 18.95

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

KuwaitExport (31.4) 23.10 22.03 22.50 24.03 24.25 22.47 23.13 22.99 18.49 16.09 16.14 18.11 18.22 18.88 18.52 19.14 18.69

SP Libyan AJBrega (40.4) 27.79 24.69 25.54 28.85 28.18 24.96 25.73 25.91 20.62 19.00 18.81 19.71 20.10 20.81 19.96 20.42 20.32

NigeriaBonny Light (36.7) 27.40 24.35 25.43 28.51 28.06 24.81 25.41 25.98 20.60 18.92 18.78 19.65 20.13 20.77 19.94 20.37 20.30

Saudi ArabiaLight (34.2) 24.82 23.77 24.24 25.77 26.17 24.03 24.92 24.73 20.16 17.82 17.99 18.83 18.92 19.68 19.34 19.93 19.47Heavy (28.0) 23.32 22.57 23.15 24.60 24.88 22.61 23.77 23.63 19.36 17.00 17.21 18.00 18.07 18.83 18.47 19.08 18.61

UAEDubai (32.5) 24.79 23.67 24.06 25.40 25.86 23.45 24.70 24.37 19.93 17.62 17.60 18.54 18.56 19.21 18.85 19.45 19.02

VenezuelaTia Juana Light1 (32.4) 22.79 21.08 20.79 22.77 22.30 20.55 21.54 20.72 17.66 15.28 14.89 15.37 15.57 16.35 16.04 16.24 16.05

OPEC Basket2 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 18.33 18.44 19.14 18.79 19.18 18.89

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

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

Gulf AreaOman Blend (34.0) 24.29 23.26 23.82 25.55 25.53 23.61 24.44 24.49 19.93 17.67 17.87 18.54 18.58 19.24 18.89 19.52 19.06

MediterraneanSuez Mix (Egypt, 33.0) 22.61 19.73 21.58 24.56 23.83 21.37 22.48 23.11 17.75 16.09 16.68 16.74 16.57 17.63 16.92 17.31 17.11

North SeaBrent (UK, 38.0) 27.30 24.42 25.37 28.35 27.96 24.66 25.78 25.84 20.54 18.80 18.58 19.48 20.00 20.71 19.86 20.32 20.22Ekofisk (Norway, 43.0) 27.49 24.34 25.38 28.45 27.59 24.55 25.70 25.73 20.35 18.70 18.51 19.35 19.74 20.41 19.43 19.92 19.88

Latin AmericaIsthmus (Mexico, 32.8) 24.63 22.60 22.86 24.62 24.25 22.67 23.86 23.49 18.94 16.61 16.73 17.42 18.18 19.09 18.73 18.96 18.74

North AmericaWTI (US, 40.0) 29.48 27.27 27.37 28.60 27.67 26.53 27.41 26.40 22.20 19.49 19.40 19.71 19.96 20.91 20.74 21.06 20.67

Others

Urals (Russia, 36.1) 24.78 21.72 23.60 26.46 25.60 23.08 24.46 25.05 19.80 17.83 18.37 18.58 18.55 19.72 18.53 19.01 18.95

42 OPEC Bulletin

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

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

November 2001 to February 2002

10

15

20

25

30

35

OPEC Basket

Urals

West Texas

Isthmus

Ekofisk

Brent

Suex Mix

Oman

FebruaryJanuaryDecemberNovember11 22 33 44 11 22 33 44 11 22 33 44 11 22 33 44

$/barrel$/barrel

55

March 2002 43

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%SFebruary 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 15.24February 20.84 20.12 20.94 21.81 23.46 14.82 15.52

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMar

$/barrel

2002

44 OPEC Bulletin

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

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%SFebruary 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 n.a 27.74 18.20 16.93September 23.46 29.93 n.a 29.36 18.99 17.44October 19.14 23.55 n.a 23.61 15.61 15.07November 16.22 19.41 n.a 20.54 13.61 12.48December 16.91 19.11 n.a 19.16 15.15 13.152002January 18.01 19.89 27.37 19.53 17.65 14.00February 19.46 20.06 21.29 19.74 15.62 14.88

Sources: Until September 2000 Platt’s Oilgram Price Report & Platt’s Global Alert; as of October 2000 Reuters. Prices are average of available days. na not available

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMar

$/barrel

2000 2001 2002

March 2002 45

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%SFebruary 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 15.22February 23.24 22.71 24.20 18.09 14.94 14.46

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMar20002000 20012001

$/barrel

20022002

46 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%SFebruary 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 13.90February 20.28 21.79 23.40 13.57 13.50

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMar20022002

March 2002 47

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 380CFebruary 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 16.19February 21.86 24.11 21.76 22.54 16.83 16.99 17.14

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMarFeb20002000 20012001

$/barrel$/barrel

20022002

48 OPEC Bulletin

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

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

2000 naphtha gasoil jet kero 180CFebruary 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 15.01February 20.93 20.69 21.50 15.96

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

FebJanDecNovOctSepAugJulJunMayAprMarFebJanDecNovOctSepAugJulJunMayAprMar2000 2001

$/barrel

2002

March 2002 49

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

50 OPEC Bulletin

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

Indonesian government mulls planto revitalize country’s industries

Jakarta — The Indonesian government is working on ablueprint for revitalizing four of the nation’s industries anddeveloping seven others, a move that would boost exports to avalue of $42.2 billion this year from $39.7bn in 2001.

The blueprint, covering the development of industries during2002-04, has been presented to the cabinet and the financialsector policy committee, according to local media reports.

The government should focus on revitalizing textiles, elec-tronics, footwear, and the pulp and paper industries, and de-velop industries covering leather, fishing, crude palm oil, fertilizerand agricultural machinery, food, software, and handicrafts andjewellery, the Jakarta Post quoted Industry and Trade Minister,Rini M Soewandi, as saying.

This would also create more jobs, offsetting the impact ofmassive lay-offs of millions of workers, due to the lingeringeconomic recession, which began in 1997, the reports noted.

They pointed out that the present government’s main eco-nomic agenda was to create jobs. However, the country’s indus-trial sector remained in the doldrums because of external factorsand internal problems.

The external factors included the global economic slowdownin the major export destinations — the United States, Japan andEurope, said the reports.

The domestic problems included poor security measures andlaw enforcement, a high-cost economy, labour issues, and a lackof financing, they added.

Iran exports more than $1.3bnworth of mining products

Tehran — A senior Iranian official said last month that thecountry has exported $1.3 billion worth of industrial and miningproducts since the start of the Iranian year that began in March2001.

Deputy Minister of Industries and Mines, Jafar Sarqeini,made the announcement on the sidelines of a conference onmines, industrial safety, health and the environment held inKhazarabad, Sari, in northern Iran.

The value of the non-oil goods exported during this periodamounted to $3.3bn, 39 per cent of which were goods subjectto the Ministry’s tariffs, reported the Islamic Republic NewsAgency (IRNA).

Forty-two per cent of the goods subject to Ministry tariffsexported since last March tariffs were minerals, while 15-20 percent of the investments made in the industries related to theminerals and mining sectors.

Sarqeini noted that at the outset of third plan, exportrevenues from the mining sector was $580 million, based on anannual growth rate of 16.3 per cent, and this was expected toincrease to $1.4bn by 2004.

The value added in the mining sector in 2000 amounted to

2,850bn rials, and taking into account the annual growth rateof 5.5 per cent, this figure was forecast to reach 3,580bn rialsin 2004, he went on.

A total of 31.5m tonnes of metallic mine products wereexcavated in 2000, and this figure was expected to increase to62m t in 2004, the Deputy Minister said, adding that produc-tion of iron would double to reach 24m t by the year 2004.

Nigeria boosts disseminationof information on trade

Abuja — The Nigerian government plans to establish a Website for the dissemination of trade information under the newtrade policy announced recently by the Ministry of Commerce.

According to a statement released by the Ministry, thegovernment would also establish information collection anddissemination centres on trade and investments, in view of theimportance of efficient information services in the world tradingsystem.

All public and private sector organizations which had some-thing to do with trade would be encouraged to establish tradeinformation service centres and the government would reopenand establish new commercial desks abroad, the statement said.

“The network of trade information services currently oper-ated by the Nigeria Enterprises Promotion Council (NEPC)would be strengthened and linked with those in operation inother ministries and agencies,” it said.

On the subject of quality certification and control, allagricultural commodities destined for export would have begraded and disinfested before export, the statement noted.

“It is an offence, punishable with a fine or imprisonment,or both, for any scheduled agricultural commodity to be ex-ported without being graded,” it added.

SABIC, Technip sign accordfor new petrochemical plant

Riyadh — The Saudi Arabian Basic Industries Corporation(SABIC) has signed an agreement with Technip for the designand construction of an acetic acid plant.

The unit will be based on SABIC’s new acetic technology,developed by the firm’s research and development unit inRiyadh. It will be the first of its kind to be based on theoxidization of ethane, to be supplied by Saudi Aramco.

SABIC’s Vice-Chairman and Managing Director, MohamedH Al-Mady, said the new plant would be built at the ArabianIndustrial Fibres Company complex (Ibn Rushd), in the indus-trial city of Yanbu.

It is anticipated that the plant will be onstream by thebeginning of the second quarter of 2004, with a productioncapacity of 30,000 tonnes/year, reported the Saudi Press Agency(SPA).

Al-Mady praised the continuous efforts of workers at the

March 2002 51

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

SABIC research and development unit for improving industrialapplications and developing more new products to meet therequirements of markets for intermediates and basic chemicals,polymers, fertilizers, and metals.

Their work had also enhanced SABIC’s role in the fields ofindustrial catalysts, the departments of engineering and projects,and safety and environment, SPA quoted him as saying.

SABIC, the largest Middle East petrochemical producer, is70 per cent owned by the Saudi government, while the remain-ing shares are held by Saudi and Gulf Co-operation Council(GCC) private sector concerns.

Algeria, Libya agree toset up free trade area

Algiers — Algeria and Libya have agreed to set up a free tradearea between the two countries, it was officially announced lastmonth.

The news came at the end of a three-day visit to Algeria bythe Secretary of the Libyan People’s General Committee, EmbarekAbdellah Echamekh.

A statement issued following the discussions betweenEchamekh and Algerian Premier Ali Benflis noted that the twosides had agreed to set up a free trade area.

In this regard, the two North African nations urged theircompanies and organizations to explore additional partnershipopportunities. They also decided on a number of joint projectsin the areas of energy, tourism, finance and banking.

Algiers and Tripoli urged officials in the energy sectors ofthe two countries to determine new methods of partnership inhydrocarbons and to especially target joint projects.

According to the statement, the two sides reviewed thesituation of existing joint ventures and decided on measures toremove obstacles that hindered their smooth running. They alsoagreed on increasing the level of investment between the twocountries.

Abu Dhabi factory startsproduction of steel bars

Abu Dhabi — The Emirates Iron and Steel Factory hasstarted commercial production at its facility in Abu Dhabi, withan output target of 250,000 tonnes/year.

“Commercial production began in a small way last monthwith one shift. Our goal is to produce 250,000 tonnes of steelreinforcing bars this year,” said Gerold Strahlmann, the com-pany’s General Manager.

About $82 million was invested in the first phase of theproject to make steel reinforcing bars to conform to internationalstandards. The factory, which is the largest in the United ArabEmirates (UAE), uses the latest rolling mill technology.

Plans are under way to invest an additional $30 million forexpansion and diversification by adding wire rod and light

sections. The selection of consultants and contractors for thephase is expected to begin soon.

The UAE’s steel requirements presently stand at about700,000–900,000 t/y, with much of the demand being metthrough imports from Saudi Arabia, Turkey and Qatar, and therest being supplied by small domestic producers.

Qatari economy stable andpolicies prudent, says report

Doha — Qatar’s GDP declined slightly last year compared to2000, but the country’s economy remains stable and its eco-nomic policies are prudent, according to a report in the GulfTimes newspaper.

Although 2001 was generally a good year for Qatari economy,the country’s GDP totalled $16.1 billion, down from $16.4bnfor 2000, said the report.

The decline was largely because oil prices were lower in 2001than in 2000. Qatari oil averaged $23.6/barrel last year, whereasin 2000 the average price was $27.1/b, showing a decline of 12.9per cent.

The report went on to note that Qatar’s GDP per capita hasbeen increasing steadily over the last five years, making thecountry the richest Arab state by this measurement.

The nation’s annual per capita income was put at $29,000in 2000, according to a report published by the Abu Dhabi-based Arab Monetary Fund. The United Arab Emirates wasplaced second among Arab nations in terms of per capita income.

Meanwhile, annual inflation in Qatar also fell in 2001, thefirst decline in inflation since 1993. The fall indicated thatQatar’s economy was stable and its monetary policy prudent,noted the report.

Nigeria loses $800m toinefficient power supply

Abuja — Losses due to inefficient power supply by the Nigerianstate-run National Electric Power Authority (NEPA) have beenestimated at about $800 million by a senior Nigerian official.

The Director General of the state-run Bureau of PublicEnterprises (BPE), Malam Nasir El-Rufai, made the claim ina speech delivered at a two-day workshop on power sector reformand privatisation in Lagos last month.

The BPE is charged with the responsibility of selling Nige-rian government interests or stakes in companies, corporationsand parastatals.

El-Rufai, who was represented by the Director of the BPE’sLegal Department, Irene Chigbue, told the gathering of NEPAofficials that another $440 million might have been lost throughinadequate and inefficient fuel distribution.

For Nigeria to attain the desired level of industrial and socialdevelopment, significant reforms in major sectors, like the powersector were inevitable, he went on.

52 OPEC Bulletin

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

The Director General noted that all over the world, it hadbeen found that the greatest resistance and opposition to pri-vatisation of state-owned enterprises was from the labour forceof the enterprises to be privatised.

El-Rufai said that the opposition was understandable in thesense that workers often assumed that privatising or restructur-ing would usually lead to mass retrenchment.

However, this belief was not correct, because the duty of theBPE, as the government agency co-ordinating the privatisationof Nigerian government enterprises, was to ensure that theinterest of the workers was protected.

The same principle would be applied to the privatisation ofNEPA, which union members had protested against by callingfor commercialisation instead.

In his keynote address to the gathering, the Minister ofEmployment, Labour and Productivity, Musa Gwadabe,commended the union members for suspending a plannednationwide strike in protest against the privatisation plans.

Gwadabe added that the Ministry placed great emphasis ondialogue and consultation in the resolution of industrial dis-putes.

Saudi Arabia mulls privateinvestment in power sector

Jeddah — Talks aimed at promoting private investment inSaudi power sector to help finance expansion plans, and as astep towards privatizing the vast electricity industry will sooncommence, according to the Governor of the Saudi ElectricityService Company, Fareed Zaidan.

“We are seriously working on this and there will be severalmeetings with many international and Saudi companies after theHajj to implement this plan,” he was quoted as saying by theOkaz daily.

“We are looking for investors to enter and compete with theSaudi Electricity Company (SEC) to provide better services atlow cost,” he noted.

The Kingdom set up the SEC in 1999 as part of moves torestructure the sector, following the merging of four regionalpower firms that had been reporting losses for years, promptingstate intervention which bailed them out.

The Kingdom, which is trying to keep pace with surgingelectricity demand, has estimated that it will need $90 billionof investment by 2023, 54 per cent of which is for generation,29 per cent for transmission and 17 per cent for distribution.

Zaidan said the first stage of privatizing the heavily subsi-dized electricity industry would be limited to generation, withSEC purchasing power at an agreed price.

“After 10 years (tariffs) will be based on supply and demandand competition,” he said, adding that the regulatory bodywould review tariffs regularly to make sure citizens can affordthem.

Saudi Arabia’s Industry and Electricity Minister, Dr HashimYamani, said last year that the Kingdom was ready to open upthe country’s power transmission sector to private investment.

The country needs an estimated 50,000 megawatts of newgenerating capacity by 2023 and an additional 23,000 km oftransmission lines to create an interconnected national grid.

Saudi Arabia, the world’s largest oil exporter, is committedto the restructuring of its economy, in order to enable an activeprivate sector to play a bigger role in the development process.

Indonesia wants to lowerratio of debt to GDP

Jakarta — The Indonesian government said last month thatit remains fully committed to lowering the country’s ratio of debtto GDP to 60 per cent by 2004.

The ratio is currently about 83 per cent, according toIndonesia’s Co-ordinating Minister for Economic Affairs,Dorodjatun Kundjoro-Jakti.

The government’s foreign debt management policy is fo-cused on lowering the debt-to-GDP ratio, in view of the fact thatgovernment spending on debt repayments remains the singlelargest factor in the country’s budget deficit.

Indonesia’s total debt to the end of December this yearwould remain at $129.7 billion, compared with $139bn at endof April last year, said the Minister.

The $129.7bn debt, at an exchange rate of 10,400 rupiahsto the dollar translates to an 83 per cent debt-to-GDP ratio, whilethe GDP figure was put at 1,688 trillion rupiahs (about $160bn)for this year.

The government was expected to spend 136.19tr rupiahs ondebt repayments for this year, accounting for 40 per cent of thetotal budgetary expenditure.

Dorodjatun conceded that some foreign institutions hadalready raised doubts about Indonesia’s ability to service its debt.He added that he was concerned about the impact of debt-affected budget on the economic growth rate, which was pro-jected at four per cent this year, compared with 3.5 per cent lastyear.

World Bank grants technicalassistance loan to Algeria

Algiers — The World Bank has granted a technical assistanceloan of $8.72 million to Algeria to support its transport system,it was officially announced last month.

The agreement, which was signed in Washington by theAlgerian Ambassador to the United States, Driss Djazairi, andthe World Bank’s Director for North Africa, Christian Delvoie,is aimed at assisting the Algerian government to manage,modernize and expand the country’s transport system.

In January this year, the World Bank granted Algeria anotherloan worth $16.5m, for the modernization of the country’sfinancial system.

In a separate development last month, the President of theAfrican Development Bank (ABD), Omar Kabbaj, announced

March 2002 53

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

plans to finance several projects in Algeria, amounting to about$400m.

The projects include water supply schemes in the east of thecountry, and the rehabilitation of the telecommunicationsnetwork. The plans would be submitted to the ADB’s board ofdirectors for approval soon, he added.

Nigeria ratifies multilateraltrade and investment protocol

Abuja — Nigeria has ratified a multilateral protocol on tradeand investment with more than a dozen countries, the TransportMinister, Ojo Maduekwe, announced last month.

The Federal Executive Council had ratified the outstandingagreements on reciprocal promotion and protection of invest-ments, in order to encourage and protect foreign investmentsin the country, he said.

The protocol was ratified by countries that included theUnited Kingdom, France, the Netherlands, Germany, Italy, andSwitzerland. Also on the list were Turkey, North Korea, SouthKorea, China, Romania, Bulgaria, Egypt and South Africa.

Maduekwe pointed out that the ratification of the protocolwould assist immensely in encouraging these countries to investin Nigeria.

Commenting on developments in the Nigerian industrialsector over the last two years, he said a blueprint for the industrialdevelopment of the country had been produced and this was apositive step.

Over the last two years, the Nigerian government hadcreated a conducive atmosphere that accelerated capacity utili-zation from less than 30 per cent in 1999 to about 80 per centin some industries.

Two sugar companies at Bacita and Numan had beenrehabilitated, whilst the first phase of the rehabilitation of theNafcon fertilizer plant at Onne had been completed, alongsidethe rehabilitation of the Super Phosphate Fertilizer Companyplant at Kaduna.

Saudi Arabia’s SABIC recordsprofit of $475m for 2001

Riyadh — The Saudi Arabian Basic Industries Corporation(SABIC) has posted a net profit of $475.2 million for 2001,reported the Saudi Press Agency (SPA) last month.

The Minister of Industry & Electricity and SABIC Chair-man, Dr Hashim Yamani, was quoted by SPA as saying that thecompany’s sales exceeded $7.71 billion last year, an increase ofnine per cent over 2000.

A total of 27.4m tonnes of products were marketed, repre-senting a rise of 28 per cent as compared with the previous year.SABIC’s total production reached 35.4m t, a 26 per cent riseover the year 2000.

Dr Yamani said that the global recession and events in the

last quarter of the year had a negative impact on the company’sperformance.

SABIC’s Vice-Chairman and Managing Director, MohamedH Al-Mady, said the results were better than those of many othercompanies in the industry.

Many of the firm’s competitors had announced losses, saidAl-Mady, adding that the marketing and sales performance hadhelped offset the negative effects of recession.

Prices across many product lines had reached all-time lows,especially for polyethylene, styrene and ethylene dichloride,which are some of the key lines in the firm’s product portfolio.

Algeria continues to reducelevel of its foreign debt

Algiers — Algeria’s foreign debt stood at $22.57 billion at theend of 2001, down by almost $3bn from the $25.26bn recordedin December 2000, it was officially reported last month.

According to a report by the country’s Central Bank, theratio between annual debt servicing and exports showed a slightincrease, from 19.80 per cent in 2000 to 22.21 per cent in 2001.

The increase, according to the Bank, was due to the fall inoil prices in 2001 and the corresponding decline in oil exportrevenues. The country’s debt servicing was put at $4.46bn lastyear, in comparison with $4.50bn in 2000.

The Bank’s report added that at the end of 2001, thecountry’s short-term debt, stood at only $260 million, out ofa total debt of $22.57bn.

Indonesian state electricity firmto expand power generation

Jakarta — Indonesian state electricity company PT PLN saidlast month that it hoped to add 2,300 megawatts of electricitygenerating capacity by 2005 to avoid a power crisis on thedensely-populated islands of Java and Bali.

About 1,000 mw would come from the expansion of existingplants and another 1,320 mw from an independent powerproducer (IPP), said PLN’s Finance Director, Parno Isworo.

The 1,320-mw IPP-operated Tanjung Jati B power plantin central Java would be in operation by 2004, while PLN wouldexpand generating capacity at the Muara Karang and the MuaraTawar plants in north Jakarta by 2005.

Tanjung Jati was one of the many power plant projects thatwere postponed in 1999, following the crisis the ravaged thecountry’s economy in 1997-98.

The government decided to suspend the contract as PLNwas unable to cover its contractual obligations to the IPPregarding the deal.

Parno pointed out that Java and Bali would face severe powershortages from 2004 if the current capacity of 18,600 mw wasnot increased in good time.

Indonesia’s power demand is forecast to rise by seven per

54 OPEC Bulletin

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

cent a year to 16,300 mw by 2005 from the current peak of13,300 mw. With the planned expansion, power capacity wouldrise to 20,900 mw, sufficient to cover peak demand, said Parno.

Loans were being negotiated with a Japanese banking cor-poration to finance the Muara Karang and Muara Tawar ex-pansions, he disclosed.

Indonesia projects modestrise in non-oil exports

Jakarta — The Indonesian National Agency for ExportDevelopment has forecast a rise of between 2.5–3.0 per cent innon-oil and gas exports to $45 billion this year, compared to$43.4bn in 2001.

However, the Agency’s Chairman, Gusmardi Bustami,cautioned that torrential rains and floods in several parts of thecountry had affected delivery of goods that were destined forexport, and this might affect the figures.

Indonesia’s total exports fell by 9.8 per cent to $56.03bnlast year, the largest percentage drop in 12 years due to therecession in the United States and other export markets, includ-ing Japan and Europe, according to Central Bureau of Statistics.

Exports to the United States reached $7.23bn and Japan$6.62bn last year. In addition, domestic consumption remainedbuoyant during the year, noted the Bureau.

Imports dropped by 8.14 per cent to $30.79bn, resultingin a $15.24bn trade surplus, said Bureau Chief, Soedarti Surbakti.

Japan grants more than $400,000for grassroots schemes in Nigeria

Abuja — The Japanese government has signed grants totalling$254,199 for six non-governmental organizations (NGOs) lo-cated in various Nigerian states, it was announced last month.

A breakdown of the total amount shows that the highestgrant of $66,727 went to the Watershed Initiative in Niger State.Dr Olaniyan Fashola of the Watershed Initiative said that thegrant would enable rice farmers to raise their production levels.

Another $45,045 was earmarked for the construction ofboreholes at Umueze-uga, in the Aguata local government area(LGA) of Anambra State.

Similarly, $43,207 was allocated for the provision andrehabilitation of boreholes and renovation of primary schoolsin Langtang North and the Qua’an Pan LGAs of Plateau State.Another $37,539 was made available for the construction of aprimary school at Koma Hills, in the Jada LGA of Adamawa State.

The sums of $36,042 and $25,639 were granted for therenovation of a primary school in Jagbe Town, in Esako WestLGA, Edo State, and the construction of boreholes at AkpagherVillage, Gboko LGA in Benue State, respectively.

In addition, in November last year, Japan made total do-nations of $190,274 to five NGOs in various Nigerian states,bringing total grants made last year to $444,473.

Japan’s Ambassador to Nigeria, Akira Matsui, said theobjective of the grant programme was to provide financial aidto local and international NGOs, hospitals, primary schools,research institutions, and other non-profit organizations.

“The aim is to help the implementation of their developmentprojects, mainly in the fields of primary health care, primaryeducation, poverty relief, public welfare, and the conservationof the environment,” he noted.

Matsui said Japan’s determination to support economicdevelopment in Africa was based on its realisation that therewould be no stability and prosperity in the world unless theproblems of Africa were resolved.

“The Japanese government intends to co-operate with theNigerian government in a joint effort to ameliorate the sufferingof Nigerians,” he pointed out.

Matsui expressed the hope that the donations would con-tribute to improving the lives of the people and further strengthenthe relations between Japan and Nigeria.

Aid from GCC nations dropssharply between 1995-2001

Abu Dhabi — Financial aid from the six Gulf Co-operationCouncil (GCC) nations has been sharply cut over the past fewyears and is set to slow down further in the coming years,reported the Dubai-based Gulf News.

Official figures showed that the GCC’s financial assistancetotalled only around $8 billion between 1995–2001, com-pared with $29.1bn between 1975–79 and $30.4bn between1980–84.

“This is less than one third of the 1980s level in currentprices,” commented one Abu Dhabi-based economist, addingthat in real terms, it was less than one fifth of the prior level,taking into account inflation rates and the real value of the dollar.

Experts said they expected levels of assistance to other Arabstates and non-Arab developing nations to remain low in thecoming years. This was because oil revenues, on which the GCCnations are heavily reliant, were not expected to sharply increase.

Figures from the Abu Dhabi-based Arab Monetary Fundshowed the official cumulative financial aid provided by theGCC since 1970 totalled around $101.8bn, nearly 94 per centof the overall Arab cash assistance.

Saudi Arabia extended around 64 per cent of the Arab aidwhile 16.5 per cent was provided by Kuwait and 10.5 per centby the United Arab Emirates (UAE).

During the oil boom years, the level of financial assistanceby the GCC countries was one of the highest in the world,accounting for more than 20 per cent of GDP in some years.

The six GCC nations earned more than $180bn in 1980but less than $60bn in 1998. Revenues recovered to around$123bn in 2000 and just above $100bn last year.

“How can you expect the GCC to maintain the aid levelwhen oil prices go below $15/b in some years and some memberssuffer from slow growth, inflation, debt and persistent budgetdeficits?” asked one expert.

March 2002 55

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

“Considering the real value of the dollar now, their debt andfinancial imbalances, eroding investments, growth in theirpopulation and their development needs, I think most membersneed assistance now,” the paper quoted him as saying.

The fiscal plight of the GCC nations is exemplified by thesituation in Saudi Arabia, whose population is growing at a rateof four per cent, while economic growth is limping along at lessthan half that level. In addition, oil output and revenues aresharply down from the levels of the early 1980s.

The Kingdom’s current population was put at nearly 22million in 2000, while its oil production has receded tojust over 7m b/d from more than 12m b/d, and domesticdebt was put at more than $170bn, nearly equivalent to thecountry’s GDP.

“We have suffered a lot from the sharp fluctuation of ouroil prices and you can see the huge difference in revenues fromone year to another,” Saudi Trade Minister, Osama Al Faqihpointed out in recent press comments.

“If we compare 2001 with the previous year, for example,we notice that we had our first surplus in 15 years in 2000, butthis year we are back to square one,” he said.

The GCC’s fellow members in the 22-nation Arab leaguehad been the main beneficiaries of financial aid, receiving morethan two thirds of the total assistance over the past three decades.

The six GCC nations are OPEC Members Kuwait, Qatar,Saudi Arabia and the UAE, together with non-OPEC Bahrainand Oman.

IMF completes latest review ofIndonesia’s economic performance

New York — The board of the International Monetary Fund(IMF) has completed its fourth review of Indonesia’s economicperformance, under a three-year extended fund facility of about$4.5 billion. The move opens the way for a further release ofabout $341 million from the programme.

The board also approved Indonesia’s request for a one-yearextension of the current arrangement to provide time for thereforms envisaged in the programme to take effect. Accordingly,the current arrangement will now expire at the end of December2003.

“The fourth review under the extended arrangement be-tween Indonesia and the IMF has been concluded on the basisof the relatively encouraging overall performance under theprogramme, and the board granted the two necessary waiverswith respect to the structural performance criteria that were notobserved,” commented IMF First Deputy Managing Director,Anne Krueger.

The country’s 2002 budget, which has been approved byparliament, represents a significant step toward ensuring me-dium-term fiscal sustainability.

The timely implementation of the recent budget plans toreduce energy subsidies, accompanied by measures to compen-sate the poor, are viewed as welcome initiatives, as are thegovernment’s plans to strengthen tax administration in 2002.

Nigeria to establish new firmfor production of solid minerals

Abuja — Nigerian President, Olusegun Obasanjo, has di-rected the state-run Nigerian National Petroleum Corporation(NNPC) to establish a company for the production of barytesand bentonite.

The move, which would be done in conjunction withNigeria’s Ministry of Solid Minerals Development, is seen aspart of measures to stop the import of these products, which areused by the country’s oil industry.

Speaking at the inauguration of a committee to examineways of accelerating production of barytes and bentonite, theMinister of Solid Minerals Development, Kanu Agabi, said thatthe President had also requested the NNPC to release funds forthe establishment of the company.

He said that the committee would work to produce a reportfor consideration and implementation. It would also determinethe annual consumption of bentonite and barytes in the Nige-rian oil industry, and determine the availability and locationsof deposits of the two minerals in the country.

Agabi added that the committee would also recommendstrategies for the immediate commercial exploitation and process-ing of the minerals, in order to meet domestic requirement andexport any surplus.

The chairman of the committee, Ahmed Abdulkadir, whois also the General Manager in charge of upstream investmentat the NNPC, said that the committee would work tirelesslytowards achieving its objectives.

Algeria, Venezuela sign dealon bilateral co-operation

Algiers — Algeria and Venezuela last month signed an outlineagreement on bilateral co-operation in the energy, mines, trade,communications, and cultural sectors.

The accord was reached following a meeting of the jointcommission of the two countries, and was signed by AlgerianEnergy and Mines Minister, Dr Chakib Khelil and his Venezue-lan counterpart, Alvaro Silva Calderón.

Speaking at the signing ceremony in Algiers, Khelil describedthe session of the joint commission as being a historic one forboth countries.

The agreement, he said, opened a new stage in bilateraleconomic co-operation, on a par with the strong political rela-tions that already existed between the Algerian and Venezuelanauthorities.

Silva Calderón pointed to the necessity for making up forlost time, which the bilateral co-operation accord accomplished,and for speeding up the necessary means for implementingsigned agreements.

The accord, he added, was reached within the frameworkof reforms being undertaken by the two countries with regardto the prospect of opening up their markets.

56 OPEC Bulletin

O P E C F U N D N E W Sê

envisaged so that the needs of individualcommunities can be specifically addressed.

Of the many activities anticipated, themost important are those aimed at directlysupporting livestock production and dairyfarming. Chief amongst them is the estab-lishment of producers’ associations,through which members will have accessto markets and other services such as creditfor the purchase of livestock and equip-ment, and business development training.Also on a pilot scale, the project will pro-mote the establishment of self-managed,village-based savings and credit associa-tions to provide small loans for micro-enterprises. To help create an enablingenvironment for increased economic ac-tivity, assistance will also be given for thereconstruction of community infrastruc-ture, including schools, health clinics, waterand electricity supplies, roads, bridges andtelecommunications networks.

The project will be implemented overa six-year period, during which time over20,000 households will benefit from thevarious activities. Proceeds from the Fund’sloan will go towards the infrastructuredevelopment component.

This is the Fund’s second public sectorlending operation in Bosnia andHerzegovina; the first loan co-financed aproject in the education sector. Addition-ally, one loan has been approved for theprivate sector to support the developmentof small and medium-sized enterprises.The Fund has also extended five emer-gency grants to Bosnia and Herzegovina.

This agreement was signed in Viennaby HE Dr Azra Hadziahmetovic, Ministerof Foreign Trade and Economic Relations

of Bosnia and Herzegovina, and by HE DrSaleh A Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.

Data summary

Project:Livestock and rural finance develop-ment.

Sector:Agriculture.

OPEC Fund loan:$5m

Lending terms:Interest rate of 1.5 per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Bosnia and Herzegovina.

Executing agency:Ministry of Agriculture, Water Man-agement and Forestry.

Implementation period:Six years.

Appraising agency:International Fund for AgriculturalDevelopment (IFAD).

Loan administrator:IFAD through United Nations Op-erations Service.

Co-financiers:IFAD; beneficiaries; government ofBosnia and Herzegovina.

Total cost:$25.09m

Project description:The project comprises the followingcomponents:

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 signs 21 loan agreementsworth a total of over $145 million

In February, the OPEC Fund for International Development signed 21 loan agreements worth more than $145 millionwith 15 developing countries in Africa, Asia and Europe. Thirteen of the loans will support projects in the agriculture,energy, health and transportation sectors, while seven will provide debt relief within the context of the Heavily IndebtedPoor Countries Initiative. A line of credit was also concluded with the East African Development Bank.

No 8/2002Vienna, Austria, February 26, 2002

Bosnia and Herzegovinaget $5m Fund loan forrural development

The OPEC Fund for International Devel-opment has signed a $5 million loan agree-ment with Bosnia and Herzegovina tohelp address the reconstruction needs ofwar-torn rural communities. Conceivedas a pilot scheme for future replication inother areas, the project will promote thedevelopment of sustainable, small-scalecommercial livestock production and fi-nance the rehabilitation of communityservices and facilities.

After years of civil strife, Bosnia andHerzegovina’s entire infrastructure hassustained considerable damage, particu-larly the agricultural sector, which plays acentral role in the country’s economy.Livestock numbers have been reduced bymore than half, and a lack of credit facili-ties hinders farmers from rebuilding theirenterprises.

Seven underdeveloped rural localities,all traditional livestock raising areas, havebeen selected to participate in the pilotscheme. A wide range of components is

March 2002 57

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

— establishment of producers’ asso-ciations;— development of savings and creditassociations; and— reconstruction of schools, healthclinics water and electricity supplies,roads, bridges and telecommunicationsnetworks.

No 9/2002Vienna, Austria, February 26, 2002

Fund extends $2.5mloan to Burkina Fasofor public health project

The OPEC Fund for International Devel-opment has signed a $2.5 million loanagreement with Burkina Faso towardscompletion of the recently-creatednational public health laboratory (NPHL)in Ouagadougou, the country’s capital.This initiative aims to expand existingfacilities in order to encompass a widerrange of testing services, thus eliminatingthe need to utilize laboratories locatedabroad.

The only referral laboratory of its kindin Burkina Faso, the NPHL offers servicessuch as control tests on foodstuffs, drugsand all other products likely to affectcommunity health. It also supports healthprogrammes, and investigates hygienicconditions in public places, as well ashelping control agriculture and veterinary-related diseases.

The first phase of this project, also co-financed by the Fund, comprised theconstruction of the main laboratory build-ing and its annexes. Under the secondstage, additional facilities totalling 2,197square metres will be built to house atoxicology unit, quality control and test-ing areas and special storage facilities forchemicals, samples and pharmaceuticals.In addition, highly sophisticated measur-ing and analysis equipment will be pro-cured, and a maintenance and repairworkshop for laboratory apparatus built.Sensitization campaigns will be providedto all age groups, especially school chil-dren, on the importance of a proper diet,hygiene and the risks of food and watercontamination. Prevention classes for in-

fectious diseases such as HIV/AIDS willalso be established.

Once the new facilities are operational,health indicators in the country are ex-pected to improve considerably due to theearly detection and treatment of diseases,and through access to modern medicationand health education opportunities. Thepopulation will also be protected from thehealth risks associated with environmentalcontaminants. In the area of agriculture,productivity will increase as livestock ill-nesses will be caught early and potentialepidemics avoided.

Burkina Faso has previously benefitedfrom OPEC Fund loans totalling $101.73million. This amount includes loans forbalance of payments support, a commod-ity imports programme and projects in thetransportation, water supply and sewer-age, education, health and agriculturesectors. The country has also received anumber of technical assistance grants inthe areas of renewable energy, water con-servation, agriculture and health, oneemergency grant for famine victims andresearch grants towards health and educa-tion.

The agreement was signed in Viennaby HE Thomas Sanon, Ambassador ofBurkina Faso to Austria, and by HE SalehA Al-Omair, Chairman of the GoverningBoard of the OPEC Fund.

Data summary

Project:National public health laboratory,phase II.

Sector:Health.

OPEC Fund loan:$2.5m

Lending terms:Interest rate of one per cent perannum, with an annual service chargeof one per cent on amounts with-drawn and outstanding; maturity of20 years, including a grace period offive years.

Borrower:Burkina Faso.

Executing agency:Project Implementation Unit, underthe aegis of the Ministry of Health.

Implementation period:18 months.

Appraising agency:OPEC Fund.

Loan administrator:OPEC Fund.

Co-financier:Government of Burkina Faso.

Total cost: $2.84mProject description:

The project comprises the following:— construction of additional build-ings to the NPHL, totalling 2,197square metres for housing a toxicologyunit, a quality control unit and a unitfor the receipt, registration and analy-sis of imported goods samples;— construction of a maintenance andrepair workshop for laboratory equip-ment;— installation of a water well;— procurement of analysis equipmentand laboratory materials;— purchase of seven vehicles; and— implementation of health andhygiene sensitization campaigns.

No 10/2002Vienna, Austria, February 26, 2002

OPEC Fund extends debtrelief to Chad under theenhanced HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Chad for the provision of debtrelief within the framework of the En-hanced Heavily Indebted Poor 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 reduce the debtof eligible countries to sustainable levels,subject to satisfactory policy performance,in order to ensure that adjustment andreform efforts are not put at risk by con-tinued high debt and debt service burdens.As the Initiative requires participation byall relevant creditors, debt relief efforts

58 OPEC Bulletin

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

entail co-ordinated actions by the interna-tional finance community, including mul-tilateral 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 could ultimatelyqualify for HIPC assistance, of which 34are in sub-Saharan Africa. To date, 24countries have reached their decision pointunder the Enhanced HIPC Initiative andof these, four have reached their comple-tion point under the original HIPC Ini-tiative. These 24 countries are nowreceiving debt relief which will amount tosome $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.

The OPEC Fund has approved debtrelief under the HIPC Initiative and theEnhanced framework to 19 countries, 15of which are in Africa and four in LatinAmerica.

In May 2001, the decision point wasreached for Chad, and support for a com-prehensive debt reduction package to thiscountry under the HIPC Initiative wasagreed upon by the IMF and the WorldBank. Over time, total relief from all ofChad’s creditors will amount to approxi-mately $260 million, which implies debtservice savings of roughly $14m annuallyover a 15 year-period, or 30 per cent oftotal yearly debt obligations. In net presentvalue terms, this relief represents around$170m.

The OPEC Fund has been involved indevelopment activities in Chad for overtwo decades, providing balance of pay-ments support and assisting projects in thesectors of education, water supply andsewerage, transportation and agriculture.The country has also benefited from directFund grants, such as one grant to cover itssubscription to the capital of the CommonFund for Commodities, another to fi-nance a control programme against AIDS,and emergency assistance to help droughtvictims. Under this agreement, financingin the amount of $7m will be made avail-able to ease Chad’s debt burden.

The agreement was signed in Viennaby HE Mahamat Ali Hassan, Minister ofEconomic Promotion and Developmentof the Republic of Chad, and by HE DrSaleh A Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.

No 11/2002Vienna, Austria, February 26, 2002

Chad expands healthcare coverage with $8mOPEC Fund loan

The OPEC Fund for International Devel-opment has signed a $8 million loan agree-ment with the Republic of Chad in supportof a multi-faceted scheme that aims toboost health care coverage in three under-served provinces. On completion, theavailability and quality of medical care forover 750,000 people will be substantiallyhigher, boosting the health of the popu-lation and reducing the spread of endemicillnesses.

Despite government’s focus on meet-ing the basic health needs of the popula-tion, health indicators in Chad remainpoor; maternal/infant mortality rates arehigh, children under the age of five fre-quently perish from preventable causessuch as diarrhoea and measles, and theincidence of infectious diseases, especiallyHIV/AIDS, is on the rise. Reasons for thisare manifold: health facilities are scarce,only one physician is available per 40,000people and few have access to safe waterand sanitation.

This project will target areas possess-

ing some of the lowest levels of health carecoverage, namely, the prefectures of Batha,Biltine and Salamat, where three 12,500sq m district hospitals and 31 health cen-tres will be constructed. At each facility,two residence units will be built to houseone doctor and a midwife for handlingemergencies. Schemes to combat HIV/AIDS and other contagious diseases willcomprise the construction of a blood bankand virology laboratory at the NationalReferral Hospital in the capital cityN’Djamena. In addition, a virology labo-ratory will be built at the district hospitalin Kelo, as will 16 blood transfusion unitsacross the three prefectures. All infrastruc-ture will be provided with a full-range ofmedication and supplies, as well as neces-sary equipment and furnishings. An ex-tensive training component for health carepersonnel across all levels will cover thediagnosis, treatment and prevention ofHIV/AIDS and other related diseases andthe management of epidemics. Strongemphasis will be placed on blood banksafety procedures. Other measures includethe implementation of health and hygienecampaigns, and vaccination programmes.

The OPEC Fund has previously ex-tended nine loans to the Republic of Chad,comprising one for balance of paymentssupport, and eight project loans in theeducation, water supply and sewerage,transportation and agriculture sectors. Thecountry has also benefited from directFund grants, such as one grant to cover itssubscription to the capital of the CommonFund for Commodities, another to fi-nance a control programme against AIDS,and emergency assistance to help droughtvictims.

The agreement was signed in Viennaby HE Mahamat Ali Hassan, Minister ofEconomic Promotion and Developmentof the Republic of Chad, and by HE DrSaleh A Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.

Data summary

Project:Second health.

Sector:Health.

OPEC Fund loan: $8mLending terms:

Interest rate of one per cent per an-

March 2002 59

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

num, with an annual service chargeof one per cent on amounts with-drawn and outstanding; maturity of20 years, including a grace period offive years.

Borrower:Republic of Chad.

Executing agency:Project Implementation Unit, underthe aegis of the Ministry of PublicHealth.

Implementation period:Three years.

Appraising agency:African Development Bank (AfDB).

Loan administrator:AfDB.

Co-financiers:African Development Fund (AfDF);Technical Assistance Fund of theAfDF; government of Chad.

Total cost:$16.23m

Project description:The project will comprise the follow-ing:— construction of three 12,500 squaremetre district hospitals and 31 healthcentres, with two residence units foreach facility, as well as a blood bank,16 blood transfusion units and twovirology laboratories;— provision of related equipment,drugs and medical supplies, furnitureand vehicles; and— training of medical personnel andestablishment of health campaigns.

No 12/2002Vienna, Austria, February 26, 2002

OPEC Fund supportsEast African bankwith $10m credit

An agreement for a $10 million line ofcredit was signed between the OPEC Fundfor International Development and theEast African Development Bank (EADB),a multilateral development institution setup in 1967 to help foster economic andsocial development in Kenya, Tanzaniaand Uganda.

The purpose of the line of credit is to

support the EADB’s term lending pro-gramme to its client base of medium-sizedcompanies in the three countries. Me-dium and long-term loan financing re-mains in relatively scarce supply in theEast Africa region, and this line of creditwill allow the EADB to maintain andincrease its ability to lend on a longer-termbasis. The on-lending will assist in theexpansion of private sector developmentin the region, aid employment creationand boost overall economic growth.

The loan represents the OPEC Fund’sfirst private sector operation in this region,although the Fund has been involved indevelopment activities in support of thepublic sector in all three countries for overtwo decades. Substantial assistance hasbeen directed towards project financingacross all sectors, ranging from education,health, water supply and sanitation toenergy, industry, national developmentbanks, transportation and agriculture. Inaddition, the Fund has provided balanceof payments support and financed com-modity imports programmes. The Fundis also fulfilling its commitment to con-tribute to debt relief efforts for Ugandaand Tanzania under the framework of theHeavily Indebted Poor Countries Initia-tive, and has helped these countries coversubscriptions to the Common Fund forCommodities, the Amsterdam-based or-ganization aimed at achieving stable con-ditions in commodity trade. Additionally,all three countries have benefited fromFund grants for a wide array of develop-ment activities.

The agreement was signed on behalfof the EADB by Fabian R Tibeita, Direc-tor-General, and by P Tehingisa, Secre-tary, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.

No 13/2002Vienna, Austria, February 26, 2002

Fund extends debt reliefto The Gambia underthe HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with the

Republic of The Gambia for the provisionof debt relief within the framework of theEnhanced Heavily Indebted Poor Coun-tries (HIPC II) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In December 2000, the decision pointwas reached for The Gambia, 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 relief from all of TheGambia’s creditors will amount to ap-proximately $90m, which representsaround $67m in net present value terms,or 27 per cent of total yearly debt obliga-tions. This assistance will help The Gam-bia advance its poverty-reductionprogrammes and stimulate economicgrowth.

The OPEC Fund has been involved indevelopment activities in The Gambia forover two decades, providing balance ofpayments support and assisting projects inthe sectors of education, multi-sectoraland transportation. Fund grants were alsoextended for one research scheme in thearea of agriculture and as technical assist-ance towards a grasshopper control cam-paign. Under this agreement, financing inthe amount of $2m will be made availableto ease The Gambia’s debt burden.

The agreement was signed in Viennaby HE Famara L Jatta, Secretary of Statefor Finance and Economic Developmentof the Republic of The Gambia, and byHE Dr Saleh A Al-Omair, Chairman ofthe Governing Board of the OPEC Fund.

No 14/2002Vienna, Austria, February 26, 2002

The Gambia receives$5.78m loan for coastalrestoration project

The OPEC Fund for International Devel-opment has signed a $5.78 millionloan agreement with the Republic ofThe Gambia towards a project aimed atrestoring and stabilizing the country’sdeteriorating coastline. Once completed,the initiative will not only help curb en-

60 OPEC Bulletin

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

vironmental degradation, but will alsopreserve the livelihoods of thousands ofpeople.

The Gambia’s 81-km long coastal zonerepresents a valuable natural resource,abundant with heavy minerals such asquartz sand, a material extensively minedfor the burgeoning construction industry.In addition, the area provides the majorityof the population with jobs, especially inthe fisheries and tourism sectors.

However, development in this regionis accelerating more rapidly than any-where else in the country, placingenormous pressure on the coastline,which has undergone such intense erosionthat large sections of beach have beendestroyed.

The Gambia’s capital city, Banjul,home to a major port situated on thesouthern bank of the Gambian River, liesdirectly across from the Barra ferry termi-nal. Ferries operating between these twopoints are the primary forms of transportfor both goods and people, thereby play-ing an important role in the economy.

However, acute siltation has restrictedtheir movements only to high tide con-ditions. Unless mitigation measuresare implemented immediately to addressthese shortfalls, losses to homes, vital in-frastructure and livelihoods will be con-siderable.

Under the project, five sections of thecoastline will be re-shaped and restoredthrough the construction of groynes (low,broad walls made of sea rock) andrevetments (masonry retaining walls) tohalt erosion.

Land reclamation activities will be im-plemented in some areas, and deterioratedsections will be restored through the useof sandfill. Siltation will be alleviated withthe dredging of around 200,000 squaremetres of sediment from the beaches at theBarra ferry terminal.

Once completed, this initiative willenhance tourism, thereby raising house-hold incomes from the additional employ-ment opportunities. In addition, thestabilized coast will enable local people todevelop their small enterprises, especiallywomen who often make their livings fromselling agricultural produce andhandicrafts.

The OPEC Fund has approved 15earlier loans to The Gambia, comprising

nine for balance of payments support, oneloan for debt relief under the HeavilyIndebted Poor Countries Initiative, andfive others that supported projects inthe multi-sectoral, education and trans-portation sectors. Fund grants also wereextended for one research scheme in thearea of agriculture and as technical assist-ance towards a grasshopper control cam-paign.

The agreement was signed in Viennaby HE Famara L Jatta, Secretary ofState for Finance and Economic Develop-ment of the Republic of The Gambia, andby HE Dr Saleh A Al-Omair, Chairmanof the Governing Board of the OPECFund.

Data summary

Project:Coastal protection.

Sector:Multi-sectoral.

OPEC Fund loan:$5.78m

Lending terms:Interest rate of one per cent per an-num, with an annual service charge onamounts withdrawn and outstanding;maturity of 20 years, including a graceperiod of five years.

Borrower:Republic of The Gambia.

Executing agency:Department of State for Works, Com-munications and Information.

Implementation period:3 ½ years.

Appraising agency:African Development Bank (AfDB).

Loan administrator:AfDB.

Co-financiers:African Development Fund; govern-ment of The Gambia.

Total cost:$19.6m

Project description:The project comprises the following:— construction of groynes andrevetments;— dredging 200,000 sq m of sedi-ment from beaches at the Barra ferryterminal;— land reclamation measures; and— consultancy services.

No 15/2002Vienna, Austria, February 26, 2002

Lao PDR to pursueroad project with $5mOPEC Fund loan

The OPEC Fund for International Devel-opment has signed a $5 million loan agree-ment with the Lao People’s DemocraticRepublic to help rehabilitate roads in fourremote, rural provinces. The project aimsto facilitate access to markets and socialservices, thereby boosting agriculturalproduction and improving living condi-tions among the region’s poor.

Employing over three-quarters of thelabour force, and representing a large sourceof revenue, agriculture is of critical impor-tance to Laos, especially for rural commu-nities who rely on farming not only fortheir livelihoods, but sustenance as well.Development of these remote regions,however, is severely constrained due to thelack of a reliable transportation network.Although relatively extensive (totallingsome 26,000 km), only about 18 per centof the entire network is paved. Many ruralroads, which are often no more than earthtracks, are impassable most of the year.While the government has made progressin upgrading links in urban areas, those inrural provinces remain largely under-funded. As a result, numerous villages areseparated from marketplaces and even themost basic social services, perpetuatingpoverty for thousands of families.

The proposed project will be imple-mented in Laos’ Attapeu, Houaphan,Xaisomboun and Vientian provinces, ar-eas experiencing the most acute economicisolation. Under the initiative, some 220km of rural access roads will be rehabili-tated. Approximately one half of the roadswill be upgraded to bitumen standard,while the remaining will be re-surfacedwith gravel. Additionally, some 100 km offeeder roads in the Houaphan provincewill be improved with a modified gravelsurface including a 3.5 m-wide carriage-way. Mountainous roads will be pavedwith extra-durable materials, and carriage-ways and shoulders will be constructed,allotting additional widths for roads pass-ing through villages, markets and other

March 2002 61

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

congested areas. Drainage systems will alsobe installed to prevent flooding during themonsoon seasons.

Some 6,370 impoverished householdsin 70 villages are expected to benefit fromthe project by having year-round, reliableaccess to marketplaces, employment, healthservices and educational facilities, ulti-mately reducing poverty and leading toself-sustaining growth.

This is the 10th loan the OPEC Fundhas extended to Lao PDR. The othersinclude one for balance of payments sup-port, two for commodity imports pro-grammes and six project loans in theagriculture, energy and transportation sec-tors.

The agreement was signed in Viennaby Vithayapadith Khennavong, Chargé d’Affaires ai of the Lao People’s DemocraticRepublic to Germany, and by HE DrSaleh A Al-Omair, Chairman of the Gov-erning Board of the OPEC Fund.

Data summary

Project:Rural access roads.

Sector:Transportation.

OPEC Fund loan:$5m

Lending terms:Interest rate of one per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Lao People’s Democratic Republic.

Executing agency:Ministry of Communications, Trans-port, Post and Construction.

Implementation period:Four years.

Appraising agency:Asian Development Bank (AsDB).

Loan administrator:AsDB.

Co-financiers:AsDB; government of Lao PDR.

Total cost:$33.46m

Project description:The project comprises the following:— upgrading 220 km of rural roadsto bitumen standard or gravel-surfaced;

— improving 100 km of feeder roadswith modified gravel surface;— addition of carriageways and shoul-ders;— installation of drains; and— consultancy services.

No 16/2002Vienna, Austria, February 26, 2002

Lebanon receives $10mloan from OPEC Fundfor road scheme

The OPEC Fund for International Devel-opment has signed a $10 million loanagreement with the Republic of Lebanonin support of a project to rehabilitate andadd new sections to the northern highway,a route that connects the Beirut-Tripolihighway to the Syrian border. The initia-tive is part of the country’s coastal motor-way programme, which aims to improvelinks with neighbouring countries.

Lebanon’s roads play almost an exclu-sive role in the transportation of goods andpeople, and provide important linkagesbetween urban and rural areas. Althoughthe majority of them are paved, manysections are over 60 years old and, afteryears of neglect, now require extensiverehabilitation. Drainage systems are de-fective, and road markings and signs vir-tually non-existent.

Under the project, twelve sections ofthe 51-km northern highway will be eitherrehabilitated or newly constructed. A 3-4inch asphalt layer will be laid along theentire length of the road, and ditches anddrains will be replaced to protect againstflooding. Road markings and signs willalso be installed, and overpasses, bridges,viaducts and barriers built.

Once completed, the heavy traffic thatcurrently goes through the narrow streetsof Tripoli to reach Beirut will instead bediverted to the newly upgraded road. Theimproved transportation links will helpboost Lebanon’s economic activity byproviding better conditions for the inter-nal transport of agricultural products aswell as the development of export-ori-ented industries. Additionally, ruralpopulations will enjoy a higher standard

of living as the transfer and marketing ofproducts becomes faster and less expen-sive, and basic services more accessible.

Lebanon has previously benefited fromfive OPEC Fund loans for public sectorprojects in the agriculture, health, educa-tion and water supply and sewerage sec-tors. As well, one loan has been approvedfor the private sector to support the devel-opment of Lebanon’s small and medium-sized enterprises. Technical assistancegrants have also been extended for therehabilitation of the country’s health sec-tor and to support an agricultural researchprogramme.

The agreement was signed in Viennaon behalf of the Republic of Lebanon byHE Jamal Abdul-Rahim Itani, Presidentof the Council for Reconstruction andDevelopment, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.

Data summary

Project:Northern coastal road.

Sector:Transportation.

OPEC Fund loan:$10m

Lending terms:Interest rate of four per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five-years.

Borrower:Republic of Lebanon.

Executing agencies:Council for Development and Recon-struction Ministry of Public Works.

Implementation period:Three years.

Appraising agency:Islamic Development Bank (IsDB).

Loan administrator:IsDB.

Co-financiers:IsDB; government of Lebanon.

Total cost:$64.55m

Project description:The project comprises the following:— construction/reconstruction of 12sections of the 51-km northern road;— installation of drainage structures,

62 OPEC Bulletin

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

overpasses, bridges, viaducts, inter-changes and roundabouts; and— provision of road markings andsigns.

No 17/2002Vienna, Austria, February 26, 2002

Fund extends debtrelief to Madagascarunder HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Madagascar for the provisionof debt relief within the framework of theEnhanced Heavily Indebted Poor Coun-tries (HIPC II) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In December 2000, the decision pointwas reached for Madagascar, 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 relief from all of Mada-gascar’s creditors will amount to approxi-mately $1.5 billion, which implies debtservice savings of roughly $62 millionannually over the upcoming years, or 40per cent of total yearly debt obligations.In net present value terms, this relief rep-resents around $814m. This relief willhelp the country direct spending towardsimproving access to health and education,rehabilitating rural roads and water supplysystems, and providing support to poorcommunities.

The OPEC Fund has assisted Mada-gascar with its development activities forsome 20 years, providing balance of pay-ments support and assisting projects in thesectors of energy, transportation, agricul-tural and education. Additionally, thecountry has benefited from technical as-sistance grants in the area of agriculture.Under the agreement, financing in theamount of $4m will be made available toease Madagascar’s debt burden.

The agreement was signed in Viennaby HE Réné Rasata Rainiketamanga,Director of Cabinet and Minister of Fi-nance and Economy of the Republic of

Madagascar, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.

No 18/2002Vienna, Austria, February 26, 2002

Fund extends $8.67mloan to Mozambiquefor road rehabilitation

The OPEC Fund for International Devel-opment has signed a $8.67 million loanagreement with the Republic of Mozam-bique to help finance a major road reha-bilitation project in seven rural districts ofthe Gaza and Tete provinces. Once com-pleted, travel time and the high cost ofmoving agricultural goods will be signifi-cantly reduced, and trading opportunitieswith neighbouring countries will receivea considerable boost.

Agriculture plays an important role inMozambique’s economy, contributing toover one-third of its GDP, and employingmore than three-quarters of the popula-tion. Endowed with numerous untappednatural resources, the country possessesconsiderable economic potential. How-ever, progress is hindered by Mozambique’sinadequate road infrastructure, the pri-mary mode of transportation. Only a smallpercentage is paved and, after years of civilstrife, the network has deteriorated con-siderably, causing additional setbacks fora country where almost three-quarters ofthe population live below the poverty line.Matters were made worse in February2000, when Mozambique was hit withone of the worst floods it had seen in overhalf a century. Government therefore hasplaced the highest priority in rehabilitat-ing the entire transportation sector, espe-cially in rural areas.

Targeted for renovation are the 137-km Chókwè-Macarretane-Lagoa Nova andthe 162-km long Massacama-Columuecorridors, two stretches serving regionswith strong agricultural potential. Worksinclude upgrading and reconstructingunpaved portions to double bitumenstandard, reworking and providing dam-aged areas with an extra surface coat,and the clearing and repairing of drains.

Bridges will be refurbished, and missingones replaced.

Once these important links are up-graded, Mozambique will be in a betterposition to capitalize on its advantageoustrade location with inner Africa. Ruralcommunities will benefit from the faster,less expensive cost of transporting agricul-tural produce. Throughout the implemen-tation of the project, thousands oftemporary jobs will provide families withadditional income. Not only will foodsecurity be improved, but also the accessto social services for previously-isolatedcommunities.

The OPEC Fund has approved 18other loans for Mozambique. Of these,three were directed for balance of pay-ments support, and 15 went towardsprojects in the agriculture, health, trans-portation, education and energy sectors.The country has also been the recipient ofone emergency grant to aid flood victims,and three technical assistance grants in theareas of health care, food safety and agri-culture.

The agreement was signed in Viennaby Fernando Michone Torcida, Chargé d’Affaires of the Embassy of Mozambiqueto Germany, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.

Data summary

Project:Roads rehabilitation and upgrading.

Sector:Transportation.

OPEC Fund loan:$8.67m

Lending terms:Interest rate of one per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Republic of Mozambique.

Executing agency:National Road Administration.

Implementation period:Four years.

Appraising agency:African Development Fund (AfDF).

Loan administrator:OPEC Fund.

March 2002 63

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

Co-financiers:AfDF; government of Mozambique.

Total cost:$45.97m

Project description:The project comprises the following:— upgrading of unpaved stretches todouble bitumen standard;— cleaning/clearing/repairing ofdrains;— refurbishing deteriorated portionswith extra surface coats;— construction of 7.0-m carriagewaysand 1.5-m shoulders on parts of theMassacama-Columue road;— replacing/repairing bridges; and— consultancy services.

No 19/2002Vienna, Austria, February 26, 2002

OPEC Fund supportsrural electrificationscheme in Mozambique

The OPEC Fund for International Devel-opment has signed a $6.9 million loanagreement with the Republic of Mozam-bique in support of an initiative to provideelectrical power to rural communities inits southern and northern regions. Thisproject falls within the scope of a largergovernment scheme to strengthen thecountry’s entire energy sector and, ulti-mately, enhance economic growth.

Mozambique is endowed with a vari-ety of energy sources, including coal,hydropower and gas. However, despitethese relatively abundant resources, en-ergy is derived primarily from fuel-woodand charcoal. Efforts to connect morehouseholds to the national grid have beenhampered by the combination of highpoverty levels, a widely scattered popula-tion and limited public resources. To makematters worse, Mozambique has sufferednumerous setbacks since it was hit in March2000 with some of the worse flooding seenin over 50 years.

Under the project, electrification workswill be conducted in the areas most se-verely affected by the flooding, namely theGaza, Inhambane and Maputo provinceslocated in the south, and the Nampula

province situated in the northern part ofthe country. In all, some 816 km of mediumand 68 km of low voltage lines will beinstalled, and 72 transformer stations ofvarious sizes and voltages built. In addi-tion, 1,800 street lighting points will beconstructed along main roads.

Over 7,000 households (representingaround 51,000 people) will be newlyconnected to the network, and the reliabil-ity of service for existing customers willimprove substantially. Access to modernenergy sources will also help the country’snumerous small and medium-scale enter-prises, many of which are run by women.In addition, expanded electrical servicesare expected to help boost agriculturaloutput from improved irrigation, as wellas bring in more revenue from increasedtourism, benefiting in all some 450,000people.

Mozambique has been the recipient of19 other OPEC Fund loans comprisingthree for balance of payments support,and 16 for projects in the agriculture,transportation, health, energy and educa-tion sectors. The country has also ben-efited from three technical assistance grantsin the areas of health care, food safety andagriculture, as well as one emergency grantto help flood victims.

The agreement was signed by FernandoMichone Torcida, Chargé d’ Affaires ofthe Embassy of Mozambique to Germany,and by HE Dr Saleh A Al-Omair, Chair-man of the Governing Board of the OPECFund.

Data summary

Project:Rural electrification.

Sector:Energy.

OPEC Fund loan:$6.9m

Lending terms:Interest rate of one per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Republic of Mozambique.

Executing agency:Mozambique Electricity Company(Electricidade de Mocambique).

Implementation period:Four years.

Appraising agency:African Development Fund (AfDF).

Loan administrator:African Development Bank.

Co-financiers:AfDF; government of Mozambique.

Total cost:$24.1m

Project description:The project comprises the following:— installation of 816 km of 33 kVmedium voltage lines and 47 km oflow voltage lines;— construction of 72 transformers ofvarying sizes and voltages;— installation of single-phase servicedrops for 6,703 households as well asthree-phase service drops to supply350 service and consumer facilities;— construction of 1,800 street light-ing points along main roads; and— consultancy services.

No 20/2002Vienna, Austria, February 26, 2002

OPEC Fund extendsdebt relief to Nigerunder HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Niger for the provision of debtrelief within the framework of the En-hanced Heavily Indebted Poor Countries(HIPC II) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In December 2000, the decision pointwas reached for Niger, and support for acomprehensive debt reduction package tothis country under the HIPC Initiativewas agreed upon by the IMF and theWorld Bank. Over time, total relief fromall of Niger’s creditors will amount toapproximately $900 million, which corre-sponds to about $521m in net presentvalue terms, which is equal to 54 per centof total yearly debt obligations. This reliefwill free up the country’s debt serviceover the coming years to around $40mannually for expenditures in basic health

64 OPEC Bulletin

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

care, primary education, rural infrastruc-ture and other programmes geared atpoverty reduction.

The OPEC Fund has been involved indevelopment activities in Niger for overtwo decades, providing balance of pay-ments support, helping finance commod-ity imports programmes and assistingprojects in the sectors of agriculture, edu-cation, health, transportation and watersupply and sewerage. The country has alsobenefited from technical assistance grantsin support of regional programmes in theareas of agriculture, energy and telecom-munications, as well as one emergencygrant to help alleviate food shortages. Underthis agreement, financing in the amountof $9.5m will be made available to easeNiger’s debt burden.

The agreement was signed in Viennaby HE Ali Badjo Gamatié, Minister ofFinance and Economy of the Republic ofNiger, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.

No 21/2002Vienna, Austria, February 26, 2002

OPEC Fund extends$5m loan to Sri Lankafor rural development

The OPEC Fund for International Devel-opment has signed a $5 million loan agree-ment with the Democratic SocialistRepublic of Sri Lanka to help finance amulti-faceted rural development scheme.Aims are to create an environment to assistmicro and medium enterprises, particu-larly those relating to agricultural activitiesthat enhance economic growth and offeremployment opportunities.

Although Sri Lanka is traditionallyrural, with an economy based primarily onagriculture, over the past two decades thesector’s contribution to the country’s GDP

has declined. The southern province hassubstantial agricultural potential, but asproduction is undermined due to limitedinfrastructure, a lack of credit extensionservices and inadequate access to marketsand social services, poverty levels in thisregion are inordinately high. In order to

help promote economic growth, Govern-ment is implementing strategies to im-prove the efficiency of the agriculture sectorto make it a more productive componentof the economy, and in turn, help alleviatepoverty.

Under this initiative, some 8,500 small,medium and micro enterprises will beeligible to receive lines of credit, and arange of enterprise development serviceswill provide entrepreneurs with the knowl-edge and skills needed to help developtheir businesses. Infrastructure will beenhanced through the rehabilitation ofover 1,000 km of roads that provide im-portant transport links to marketplacesand social services. Some 92 rural markets,which not only provide outlets for the saleof local produce, but also act as accumu-lation depots for the transport of goods toother parts of the country, will be up-graded, and surrounding access roads built/repaired. In addition, the institutionalcapacity of the southern province’s publicsector entities will be strengthened. Oncecompleted, an estimated 300,000 newemployment opportunities will be cre-ated, making a significant impact onhousehold incomes.

The Fund has extended nine otherloans to Sri Lanka. Of these, two wereextended for balance of payments support,and seven have helped finance projects inthe energy, multi-sectoral, agriculture andeducation sectors. The country has alsobenefited from two research grants andfour technical assistance grants in the areasof agriculture and education, as well as aidto support a food programme.

The agreement was signed in Viennaby HE Anil Kumar Moonesinghe, Am-bassador of the Democratic Socialist Re-public of Sri Lanka to Austria, and by HEDr Saleh A Al-Omair, Chairman of theGoverning board of the OPEC Fund.

Data summary

Project:Southern province rural economicadvancement.

Sector:Multi-sectoral.

OPEC Fund loan: $5mLending terms:

Interest rate of 1.5 per cent per an-num, with an annual service charge of

one per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Democratic Socialist Republic of SriLanka.

Executing agency:Ministry of Plan Implementation.

Implementation period:Six years.

Appraising agency:Asian Development Bank (AsDB).

Loan administrator:AsDB.

Co-financier:AsDB; beneficiaries; participating fi-nancial institutions; government of SriLanka.

Total cost: $41.74mProject description:

The project will comprise the follow-ing:— establishment of a credit line foraround 8,500 small, medium andmicro enterprises;— provision of professional enterprisedevelopment services;— rehabilitation and maintenance of1,000 km of rural roads;— training of local councils on soundroad management;— upgrading of 92 rural markets;— implementation of institutionalstrengthening measures; and— consultancy services.

No 22/2002Vienna, Austria, February 26, 2002

OPEC Fund extendsdebt relief to Tanzaniaunder HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Tanzania for the provision ofdebt relief within the framework of theEnhanced Heavily Indebted Poor Coun-tries (HIPC II) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In April 2000, the decision point wasreached for Tanzania and, in November2001, the country attained its completion

March 2002 65

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

point under the Initiative, ie, the time atwhich it is decided that the country hasmet the conditions for assistance. Overtime, total relief from all of Tanzania’screditors will amount to approximately $3billion, which implies debt service savingsof roughly $116 million over the next tenyears, or 47 per cent of total yearly debtobligations. In net present value terms,this relief represents around $2,026m.Resources made available by debt reliefprovided under the Initiative will be allo-cated to key poverty reduction pro-grammes.

The OPEC Fund has been involved indevelopment activities in Tanzania forover 20 years, providing balance of pay-ments support, helping finance commod-ity imports programmes and assistingprojects in the education, agriculture,health and energy sectors. The country hasalso been the recipient of technical assist-ance grants which went towards regionalprogrammes in the water supply and sew-erage, health and transportation sectors,and two that supported tsetse fly eradica-tion campaigns. Under this agreement,financing in the amount of $14m will bemade available to ease Tanzania’s debtburden.

The agreement was signed in Viennaby HE Andrew Mhando Daraja, Ambas-sador of the Republic of Tanzania toGermany, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.

No 23/2002Vienna, Austria, February 26, 2002

Uzbekistan obtains $5mFund loan for railwaymodernization project

The OPEC Fund for International Devel-opment has signed a $5 million loan agree-ment with the Republic of Uzbekistan insupport of an ongoing government initia-tive to renovate and upgrade the country’srail network. Loan proceeds will co-fi-nance rehabilitation of the final 80 km ofthe 661 km main trunk line betweenDzhizak and Samarkand.

Due to the country’s landlocked po-

sition, railways play a crucial role inUzbekistan’s economy, carrying almosttwo-thirds of all freight volume. However,as the railway sector has been under-fundedsince independence in 1991, some of themost important corridors have deterio-rated to a point where speed restrictionshave become necessary, undermining theefficiency of the system and raising trans-port costs. This, in turn, is inhibiting tradewith low-cost suppliers and establishedmarkets and having a detrimental effect onthe economy. Particularly in need of re-habilitation is the last portion of theDzhizak-Samarkand route, which carriesthe heaviest railway traffic of the entirenetwork. This section passes through nu-merous poverty pockets, whose incomegenerating activities and access to socialservices are compromised by these short-falls.

The project will help respond to theseproblems by upgrading tracks using im-proved materials, such as special rails andfastenings, and modernizing signalling andcommunication systems. On completion,the newly renovated route will facilitatethe flow of agricultural produce and manu-factured goods, thereby encouraging in-ternational trade. Furthermore, since thestretch runs along the famous Silk Road,where many historical and archeologicalattractions remain, the economy is ex-pected to receive an additional boost fromincreased tourism. For the 3.5 millioninhabitants of the project area, the initia-tive will mean better access to market-places, social services and jobs.

This project represents the Fund’s firstpublic sector lending operation in theRepublic of Uzbekistan. One loan has alsobeen approved for the private sector tosupport the development of small andmedium-sized enterprises.

The agreement was signed in Viennaby HE Mamarizo Nurmuratov, Ministerof Finance of the Republic of Uzbekistan,and by HE Dr Saleh A Al-Omair, Chair-man of the Governing Board of the OPECFund.

Data summary

Project:Railway modernization.

Sector:Transportation.

OPEC Fund loan: $5mLending terms:

Interest rate of 1.75 per cent per an-num, with an annual service charge ofone per cent on amounts withdrawnand outstanding; maturity of 20 years,including a grace period of five years.

Borrower:Republic of Uzbekistan.

Executing agency:Uzbekistan Temir Yullari (the nationalrailway organization).

Implementation period:4 ½ years.

Appraising agency:Asian Development Bank (AsDB).

Loan administrator:AsDB.

Co-financiers:AsDB; government of Uzbekistan.

Total cost: $24.5mProject description:

The project comprises the following:— rehabilitation of an 80-km stretchof track, using special rails and elasticfastenings;— installation of telecommunicationsand maintenance equipment; and— consultancy services.

No 24/2002Vienna, Austria, February 26, 2002

Vietnam receives $10mloan from OPEC Fundfor rural development

The OPEC Fund for International Devel-opment has signed a $10 million loanagreement with the Socialist Republic ofVietnam in support of a rural develop-ment project. To be implemented withinthe framework of a government initiativeto reduce poverty in rural communities,this multi-faceted scheme will introducea number of strategies aimed at increasingagricultural production and improvingbasic infrastructure among some 55,000people.

Agriculture plays a key role in Viet-nam’s economy, providing employmentfor the majority of the population andproducing crops, especially rice, for bothexport and domestic consumption. How-

66 OPEC Bulletin

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

ever, rural poverty remains inordinatelyhigh, due to a combination of irregularwater supplies, a lack of modern farmingtechnologies and the frequent occurrenceof monsoons. These hardships are espe-cially prevalent in the Ninh Hai districtsituated in the Ninh Thuan province, oneof the poorest regions in the country. Withshrimp farming and rice cultivation com-prising the key-income generating activi-ties in Ninh Hai, the absence of a reliablewater supply is threatening the livelihoodsof thousands of families. The under-func-tioning irrigation system is capable ofserving only around 15 per cent of thetotal cultivatable land, and most farmersmust depend on other unreliable meanssuch as hand-dug wells or water traps. Thenearby Trau River represents a potentialsource of irrigation water, but no infra-structure exists to tap into its supply. Asa result, crop yields are low, jeopardizinglivelihoods and food security.

Under the project, these shortfalls willaddressed in a variety of ways. A dam andreservoir with a storage capacity of some31 million cubic metres of water will bebuilt on the Trau, and 55 km of irrigationcanals will be installed. Environmentalschemes including reforestation measuresto curb erosion, as well as water resourcemanagement programmes will be imple-mented. Some 369 households will berelocated to a new, settled communityequipped with a kindergarten, school, clinicand running water supply. Agriculturalextension services will also be providedand the irrigation network upgraded andrepaired. Additionally, the local road net-work will be rehabilitated.

The OPEC Fund has previously ap-proved nine loans for Vietnam. Of these,two financed commodity imports pro-grammes and seven others went towardsprojects in the agriculture, education,energy, national development banks andhealth sectors. Fund grants went to meetthe emergency requirements of typhoonvictims and to help finance a rural watersupply programme.

The agreement was signed in Viennaby Mrs Hoang Thi Ninh, Minister Coun-sellor and Chargé d’ Affaires ai of theSocialist Republic of Vietnam to Austria,and by HE Dr Saleh A Al-Omair, Chair-man of the Governing Board of the OPECFund.

Data summary

Project:Multipurpose rural development.

Sector:Agriculture.

OPEC Fund loan:$10.0m

Lending terms:Interest rate of one per cent per an-num, with an annual service charge onamounts withdrawn and outstanding;maturity of 20 years, including a graceperiod of five years.

Borrower:Socialist Republic of Vietnam.

Executing agency:Rural Infrastructure DevelopmentProject Manager.

Implementation period:Three years.

Appraising agency:OPEC Fund.

Loan administrator:OPEC Fund.

Co-financier:Government of Vietnam.

Total cost:$12.31m

Project description:The project comprises the following:— construction of reservoir as well asspillways, and diversion and waterrelease structures— construction of 8.5-km access road;— installation of 13.3 km of maincanals and 42.0 km of primary andsecondary canals;— provision of basic infrastructurefor 369 households;— forestation of 850 of land for ero-sion protection;— agricultural extension services; and— consultancy services.

No 25/2002Vienna, Austria, February 26, 2002

OPEC Fund extendsdebt relief to Zambiaunder HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with the

Republic of Zambia for the provision ofdebt relief within the framework of theEnhanced Heavily Indebted Poor Coun-tries (HIPC II) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In December 2000, the decision pointwas reached for Zambia, and support fora comprehensive debt reduction packageto this country under the HIPC Initiativewas agreed upon by the IMF and theWorld Bank.

Over time, total relief from all ofZambia’s creditors will amount to ap-proximately $3.8 billion, the equivalent ofabout $2.5bn in net present value terms,or approximately 63 per cent of out-standing debt at the end of 1999. Thiswill translate in a reduction in Zambia’sdebt service obligations of some 45 percent.

The OPEC Fund has assisted Zambiawith its development activities for morethan two decades, supporting projectsin the transportation, education, nationaldevelopment banks and agriculturesectors. Under this agreement, financingin the amount of $6 million will bemade available to ease Zambia’s debtburden.

The agreement was signed in Viennaby Bede Mphande, Acting Chief Econo-mist, Investments and Debt ManagementDepartment of the Ministry of Financeand National Planning of the Republic ofZambia, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.

No 26/2002Vienna, Austria, February 26, 2002

Zambia receives $5.6mfrom OPEC Fund forcancer treatment centre

The OPEC Fund for InternationalDevelopment has signed a $5.6 millionloan agreement with the Republic ofZambia to help finance the constructionof a cancer treatment centre in the capitalcity Lusaka. Once completed, the facilitywill be able to offer services for the pre-vention, diagnosis and treatment of

March 2002 67

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

cancer-related diseases, with a capacity forhandling some 1,200 patients per year.

Although Zambia’s government hasadopted a number of measures to addressthe country’s growing cancer rates, in-cluding nationwide awareness campaignsand early detection programmes, cancer-related deaths are still on the rise. Themain reasons for this are the inadequatephysician/patient ratio (one physicianavailable per 10,000 people) and theabsence of a national cancer treatmentfacility.

At present, patients must travel abroadfor radiotherapy treatment. While the gov-ernment covers most of the costs, a finan-cial contribution is also required from thepatient, an option that is out of reach formost Zambians. In addition, qualifiedpersonnel are scarce. Because of the lackof facilities, the majority of oncologistsand radiotherapists have left the countryto seek employment elsewhere.

In response to this urgent need, a cancertreatment unit, with potential for expan-sion, will be constructed at the Universityof Zambia Teaching Hospital. The centrewill house equipment capable of deliver-ing mega-dose radiation therapy, and, forconvenience, will be situated in close prox-imity to pathology, nuclear medicine andradiology departments.

Laboratories, waiting and treatmentrooms will also be provided, and facilitieswill be available to accommodate simul-taneously administered chemotherapytreatment. In addition, training will beprovided to physicians and other medicalpersonnel.

The establishment of a national cancercentre will substantially cut healthcare costsand promote early diagnosis and treat-ment of the disease.

The considerable financial savings willalso enable government to focus on othermedical programmes. Professionals willbe encouraged to undergo advanced on-cology training programmes, and it ishoped that many healthcare personnel whopreviously left Zambia to practice else-where will return.

This loan represents the Fund’s 9th

lending operation in Zambia. Of these,one was extended under the Heavily In-debted Poor Countries Initiative, and eightothers supported projects in the transpor-tation, education, national development

banks and agriculture sectors. The coun-try has also been the recipient of a tech-nical assistance grant in the area ofeducation.

The agreement was signed in Viennaby Bede Mphande, Acting Chief Econo-mist, Investments and Debt ManagementDepartment of the Ministry of Financeand National Planning of the Republic ofZambia, and by HE Dr Saleh A Al-Omair,Chairman of the Governing Board of theOPEC Fund.

Data summary

Project:Cancer diseases hospital.

Sector:Health.

OPEC Fund loan:$5.6m

Lending terms:Interest rate of one per cent perannum, with an annual service chargeof one per cent on amounts with-drawn and outstanding; maturity of20 years, including a grace period offive years.

Borrower:Republic of Zambia.

Executing agency:Ministry of Health.

Implementation period:Five years.

Appraising agency:OPEC Fund.

Loan administrator:OPEC Fund.

Co-financier:Government of Zambia.

Total cost:$6m

Project description:The project comprises the following:— construction of offices, laborato-ries and all attendant site works;— purchase of 60Cobalt radio-therapy unit, high dose rate remoteafter-loading brachytherapy machine,unit treatment simulator, linearaccelerator machine and other diagno-sis and therapy equipment, as wellas hands-on training for service engi-neers;— training for radiotherapists andoncologists; and— technical support services such as

the purchase of library books, refer-ence materials, PCs and other officeequipment.

No 27/2002Vienna, Austria, February 26, 2002

OPEC Fund supportsZimbabwean roadproject with $6m loan

The OPEC Fund for International Devel-opment has signed a $6m loan agreementwith the Republic of Zimbabwe insupport of a road rehabilitation project inthe country’s Matabeleland South prov-ince. This scheme falls within the frame-work of a government initiative to upgradeall roads, especially in rural areas, that haveeither fallen into disrepair or are no longerable to support current and future trafficloads.

With an economy heavily dependenton agriculture, Zimbabwe’s road infra-structure is vital for the movement ofinputs and produce, as well as providingtrade links to neighbouring countries.However, only around 15 per cent of the86,000-km network is paved, with theremainder in poor condition and prone toflooding during the rainy seasons.

As a result, agricultural production isconstrained, placing undue hardship onrural communities that rely on crops forboth subsistence and income generation.This situation holds particularly true inthe Matobo and Gwanda provinces, hometo more than 200,000 people.

Spanning these two key agriculturalregions is the Gwanda-Maphisa road,which has deteriorated considerably and isin urgent need of rehabilitation.

Under the project, 60.3 km of thisgravel stretch will be upgraded to bitumenstandard, including a six-metre wide car-riageway with one-metre shoulders on bothsides. Drainage works will also be installed,and three bridges built. On completion,the improved road will help reduce trans-portation costs, enable easier access tocommercial centres, and allow many pre-viously isolated villages to reach schools,health services and jobs.

A rise in tourism is also anticipated as

68 OPEC Bulletin

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

the road pro-vides an alternate route to theMatopos National Park, a popular attrac-tion for visitors.

The Fund has extended two earlierloans to Zimbabwe in support of a com-modity imports programme and to helpfinance a project in the agriculture sector.As well, the country has benefited fromtwo technical assistance grants in the areasof agriculture and education.

The agreement was signed in Viennaby HE Tirivafi John Kangai, Ambassadorof the Republic of Zimbabwe to Austria,and by HE Dr Saleh A Al-Omair, Chair-man of the Governing Board of the OPECFund.

Data summary

Project:Gwanda-Maphisa road.

Sector:Transportation.

OPEC Fund loan:$6m

Lending terms:Interest rate of 1.25 per cent perannum, with an annual service chargeof one per cent on amounts with-drawn and outstanding; maturity of17 years, including a grace period offive years.

Borrower:Republic of Zimbabwe.

Executing agency:Ministry of Transport and Energy.

Implementation period:Three years.

Appraising agency:Arab Bank for Economic Develop-ment in Africa (BADEA).

Loan administrator:OPEC Fund.

Co-financiers:BADEA; government of Zimbabwe.

Total cost:$17.85m

Project description:The project comprises the followingcomponents:— construction of three bridges;— upgrading 60.3 km of gravel-sur-faced road to bitumen standard;— installation of drainage works; and— design and supervision services.

No 28/2002Vienna, Austria, February 26, 2002

Fund extends debt reliefto Mozambique underthe HIPC initiative

The OPEC Fund for International Devel-opment has signed an agreement with theRepublic of Mozambique for the provi-sion of debt relief within the frameworkof the Heavily Indebted Poor Countries(HIPC) Initiative.

For more details on the HIPC Initiativesee Press Release No 10/2002.

In April 2000, the decision point wasreached for Mozambique and, in Septem-ber 2001, the country attained its comple-tion point under the Initiative, ie, the timeat which it is decided that the country hasmet the conditions for assistance. Overtime, total relief from all of Mozambique’screditors will amount to approximately$600 million, which represents about$306m in net present value terms.

Including assistance provided underthe original HIPC Initiative, this bringstotal estimated debt service relief to Mo-zambique to some $4.3bn. Debt servicepayments are anticipated to be cut byalmost one-half within the next eight years,creating room for additional public ex-penditures on poverty reduction pro-grammes

The OPEC Fund has been involved indevelopment activities in Mozambique ofbenefit to the public sector for over 20years, providing balance of payments sup-port and assisting projects in agriculture,transportation, health, energy and educa-tion. The country has also been the recipi-ent of grant assistance in the areas of healthcare, food safety and agriculture, as well asone emergency grant to help flood victims.Under this agreement, financing in theamount of $10m will be made available toease Mozambique’s debt burden.

The agreement was signed in Viennaby Fernando Michone Torcida, Chargé d’Affaires of the Embassy of Mozambiqueto Germany, and by HE Dr Saleh A Al-Omair, Chairman of the Governing Boardof the OPEC Fund.

No 29/2002Vienna, Austria, February 26, 2002

Loans totalling close to$146m extended by theOPEC Fund

Twenty-one agreements for loans total-ling $145.95 million were signed betweenthe OPEC Fund for International Devel-opment and 15 developing countries inAfrica, Asia and Europe. The financingwas extended to Bosnia and Herzegovina,Burkina Faso, Chad, The Gambia, Laos,Lebanon, Madagascar, Mozambique,Niger, Sri Lanka, Tanzania, Uzbekistan,Vietnam, Zambia and Zimbabwe. Thir-teen of the loans will help support publicsector projects in the agriculture, energy,health, transportation and multi-sectoralareas, while seven will provide debt reliefwithin the context of the Heavily IndebtedPoor Countries Initiative. In addition,through the Fund’s private sector win-dow, an agreement for a line of credit wasconcluded with the East African Develop-ment Bank.

All 13 public sector projects will be co-financed by the concerned governmentsand by a number of international devel-opment institutions, including the ArabBank for Economic Development in Af-rica, the Islamic Development Bank, theAfrican Development Fund, the AsianDevelopment Bank and the InternationalFund for Agricultural Development.

The majority of OPEC Fund projectloans carry interest at rates ranging fromone per cent to 1.75 per cent and have amaturity of 20 years, including a graceperiod of five years.

As of the end of 2001, cumulativepublic sector lending of the OPEC Fund,for project and programme financing,balance of payments support and HIPCdebt relief, stood at $4.87 billion. A fur-ther $111.73m had been extended insupport of private sector operations. Totalcommitments, inclusive of grants andcontributions to other international insti-tutions, had reached $6.21bn and ben-efited 109 countries. Total disbursementshad amounted to $4.11bn.

March 2002 69

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

Secretary General’s diary

The World Economic Forum held itsAnnual Meeting 2002 in New York, USA,February 1–3, 2002.

An address was delivered to the Vene-zuelan-American Association of the UnitedStates in New York, USA, February 4,2002.

An address was delivered to the OxfordUniversity European Affairs Society in Ox-ford, UK, February 5, 2002.

An official visit was made to Australiaon the invitation of the Government ofAustralia, Canberra, Australia, February19–22, 2002.

The 2002 New Zealand Petroleum Confer-ence was organized by the New ZealandMinistry of Economic Development(Crown Minerals Group), and heldin Auckland, New Zealand, February24–27, 2002.

FebruarySecretariat missions

The Kuwait International Petroleum Exhi-bition was organized by the Kuwait Inter-national Fair Co, and held in Kuwait City,Kuwait, February 2–5, 2002.

A seminar on International energy andminerals arbitration was organized by theRocky Mountain Mineral Law Founda-tion, US, and took place in Houston, TX,USA, February 7–8, 2002.

The 2nd Delhi Sustainable Development Sum-mit 2002 was organized by TERI, and heldin New Delhi, India, February 9–11, 2002.

The IP Week 2002 was organized by theInstitute of Petroleum and held in Lon-don, UK, February 18–21, 2002.

A conference on the CIS Oil – ExportPolicy, Finance and Transportation wasorganized by Marcus Evans Conferences,and held in Vienna, Austria, February 21–22, 2002.

Forthcoming OPEC Meetings

The 38th Meeting of the Ministerial Moni-toring Sub-Committee (MMSC) will beheld at the OPEC Secretariat, Vienna,Austria, June 25, 2002.

The 120th (Extraordinary) Meeting of theConference will be held at the OPEC Sec-retariat, Vienna, Austria, June 26, 2002.

The 106th Meeting of the Board of Gover-nors will be held at the OPEC Secretariat,Vienna, Austria, August 20, 2002.

The 98th Meeting of the Economic Commis-sion Board will be held at the Secretariat,Vienna, Austria, September 9, 2002.

The 39th Meeting of the MMSC will be heldat the OPEC Secretariat, Vienna, Austria,September 17, 2002.

The 121st Meeting of the Conference will beheld at the OPEC Secretariat, Vienna,Austria, September 18, 2002.

70 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, the

OPEC Review is published quarterly.

Its content covers the international oilmarket, energy generally, economic de-

velopment and the environment.

Subscription enquiries to: Blackwell

Publishers Journals, PO Box 805, 108

Cowley Road, Oxford, OX4 1FH, UK.Free sample copies sent on request.

Energy economics and related issues

Vol. XXVI, No. 1 March 2002

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 reliance onbiomass, carbon capture and carbonsequestration in a Kyoto-style emissionscontrol 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 KurtubiThe 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 Obi

The closure of European nuclear powerplants: a commercial opportunity forthe gas-producing countries — Jean-Pierre Pauwels and Carine Swarten-broekx

September 2000Energy taxes and wages in a general equi-librium model of production — HenryThompsonResource windfalls: how to use them —Rögnvaldur HannessonEnergy consumption in the Islamic Repub-lic of Iran — A M Samsam Bakhtiari andF ShahbudaghlouOil 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 inthe late 1990s: the end of the boom? —Christian von Hirschhausen and HellaEngererHousehold 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

Short-term forecasting of non-OPECsupply: a test of seasonality and

seasonal decomposition

Evidence that the terms ofpetroleum contracts influence the

rate of development of oil fields

Stimulation of investment ininternational energy through Nigerian

tax exemption laws

Energy indicators

S.M.R. Tayyebi Jazayeriand A. Yahyai

Mustafa Bakar Mahmudand Alex Russell

Uche Jack Osimiri

OPEC Secretariat

March 2002 71

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.

General termsOrders are accepted subject to the terms and conditions, current rates and technical data set out in the advertising brochure. Thesemay be varied without notice by the Publisher (OPEC). In particular, the Publisher reserves the right to refuse or withdraw advertisingfelt to be incompatible with the aims, standards or interests of the Organization, without necessarily stating a reason.

Advertising RepresentativesNorth America: Donnelly & Associates, PO Box 851471, Richardson, Texas 75085-1471, USA. Tel: +1 972 437 9557; fax: +1 972 437 9558.Europe: G Arnold Teesing BV, Molenland 32, 3994 TA Houten, The Netherlands. Tel: +31 30 6340660; fax: +31 30 6590690.Middle East: Imprint International, Suite 3, 16 Colinette Rd, London SW15 6QQ, UK. Tel: +44 (0)181 785 3775; fax: +44 (0)171 837 2764Southern Africa: International Media Reps, Pvt Bag X18, Bryanston, 2021 South Africa. Tel: +2711 706 2820; fax: +2711 706 2892.Orders from Member Countries (and areas not listed below) should be sent directly to OPEC.

Black & white rates (US dollars)Multiple: 1X 3X 6X 12Xfull page 2,300 2,150 2,000 1,8501/2 (horizontal) 1,500 1,400 1,300 1,2001/3 (1 column) 800 750 700 6501/6 (1/2 column) 500 450 400 3501/9 (1/3 column) 300 275 250 225Colour surcharge Special position surchargeSpot colour: 400 per page; 550 per spread. Specific inside page: plus 10 per cent3 or 4 colours: 950 per page; 1,300 per spread. Inside cover (front or back): plus 35 per cent

The back cover: plus 50 per cent

DiscountsPayment sent within 10 days of invoice date qualifies for two per cent discount. Agency commission of 15 per cent of gross billing(rate, colour, position, but excluding any charges for process work), if client’s payment received by Publisher within 30 days.

Technical data about OPEC BulletinFrequency: Published 12 times per year.Deadlines: Contact Publisher or local advertising representative at the address above.Language: Advertisement text is acceptable in any OPEC Member Country language, but orders should be placed in English.Printing/binding: Sheet-fed offset-litho; perfect binding (glued spine).Page size: 210 mm x 275 mm (8 1/

4" x 10 7/

8").

Full bleed: +3 mm (1/4") overlap, live material up to 5 mm (1/

2") from edge.

Text block: 175 mm x 241 mm (6 7/8" x 9 1/

2").

Readership: Estimated to be on circulation to around 20,000 readers in 151 countries.Material: Originals preferred as film positives (right-reading when emulsion side down). Design and typesetting charged at 15 per

cent of advert cost. Artwork accepted (but deadline advanced by one week). Reversing and artwork processing charged atcost and billed separately. Printer requires proof or pre-print.

Screen: 60 dots per cm (133dpi) ±5 per cent (North America: 133 line screen).Colour indication: Use Pantone matching scheme, or send proof (otherwise no responsibility can be accepted for colour match).Proofs: Sent only on request; approval assumed unless corrections received within two weeks of despatch.Payment: Due upon receipt of invoice/proof of printing, either by direct transfer to the following account number: 2646784

Creditanstalt, Vienna, Austria. Or by banker’s cheque, made payable to OPEC. Net 30 days. Payment may also be madeby the following credit cards: American Express, Visa, Euro Card/Master Card and Diners’ Club.

72 OPEC Bulletin

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

OPEC Annual Statistical Bulletin 2000This 144-page book, including colour graphs and tables, comes with a 3.5" diskette featuring all the data in the book and more (forMicrosoft Windows only). The book plus diskette package costs $85.

❐ Please send me ................. copies of the OPEC Annual Statistical Bulletin 2000 (book plus diskette)

OPEC Bulletinis published monthly and a subscription costs $70 for 12 issues. Subscription commences with the current issue (unless otherwiserequested) after receipt of payment.

❐ I wish to subscribe to the OPEC Bulletin for a one-year period

OPEC News Agencyprovides a twice-daily news service on energy developments within Member Countries as well as reports from the key world energycentres. OPECNA also carries up-to-date data and reports prepared by the OPEC Secretariat. Charges depend on the mode oftransmission (e-mail, telefax or post) and location of subscriber.

❐ I would like information on subscription prices to OPECNA

OPEC Monthly Oil Market ReportPublished monthly, this source of key information about OPEC Member Country output also contains the Secretariat’s analyses of oiland product price movements, futures markets, the energy supply/demand balance, stock movements and global economic trends.$525 per year (including airmail delivery) for an annual subscription of 12 issues.

❐ I wish to subscribe to the MOMR for a one-year period ❐ Please send me a sample copy

OPEC Reviewcontains research papers by international experts on energy, the oil market, economic development and the environment. Availablequarterly only from the commercial publisher. For details contact: Paula O’Connor, Blackwell Publishers Journals, PO Box 805,108 Cowley Road, Oxford OX4 1FH, UK. Tel: +44 (0)1865 244083; fax: +44 (0)1865 381381; e-mail:jnlinfo@blackwellpublishers.co.uk; www.blackwellpublishers.co.uk. Institutional subscribers £177/yr (North/South America $274);Individuals £67/yr (North/South America $104).

Shipping address (please print in block letters): Invoicing address (if different from shipping address):

Name: Name:Address: Address:

How to pay:Invoice me ❐ Credit card ❐ (American Express, Visa, Eurocard/MasterCard and Diners Club)Credit card company: Credit card no: Expiry date:

Holder: Signature:

Please mail this form to:PR & Information Department or telefax to:OPEC Secretariat PR & Information DepartmentObere Donaustrasse 93, A-1020 Vienna, Austria +43 1 214 98 27

Windows™ is a trademark of the Microsoft Corporation.

O R D E R F O R M