SAUDI ARABIA: OPEC ministers meet to prepare draft

OPEC foreign, oil and finance ministers meet to prepare declaration to be issued by OPEC heads of state weekend summit, Algerian minister says weak U.S. dollar is a concern. Oil, finance and foreign ministers of the Organization of the Petroleum Exporting Countries (OPEC) met on Friday (November 16) in the Saudi capital, Riyadh, to prepare a draft declaration to be presented to be adopted and issued by an OPEC heads of state meeting this weekend (November 17-18). Some member states, particularly those that receive most of their imports from the European Union and pay for them in euros, are concerned about the low level of the U.S. dollar, which is the currency used to for oil pricing and sales. "The weakness of the dollar has an impact on the price of oil, as you know, so we would like to see the dollar, you know, stabilise," said Algeria's Energy and Mines Minister Chakib Khelil. The Algerian minister said concern about the weak U.S. currency would not be reflected in the summit's final declaration, but added that it was up to individual member countries to decide whether or not to start pricing their oil sales in an alternative currency. "The dollar is the currency for trade, so any country can use any other currency. Some countries have already used other currencies, so it doesn't prevent any one of the countries member of OPEC to use another currency, it's specific to every country to look what they are importing and what they are exporting, and to decide on the hedging mechanism by which they could reduce the impact of devaluation of dollar," said Khelil. OPEC's plans to fight climate change will be a central theme of the statement, delegates said on Friday. Oil ministers have said the meeting will not decide short-term oil output policy, which will be discussed when they meet in Abu Dhabi on Dec. 5. Other themes of the declaration and at the summit will be energy's role in sustainable development and OPEC's commitment to provide reliable long-term supplies. Security of demand is also a concern. "We want to know exactly what they (consumer countries) want to do. If they want to go to renewable, new energies, if they want to do conservation, of course that will be less reliance on oil. That means more uncertainty in demand," said Khelil. Oil ministers attending forums ahead of the summit have said the group, which pumps more than a third of the world's oil, is concerned about climate change and is willing to take part in efforts to reduce emissions. The group's Secretary General, Abdullah al-Badri, said on Thursday that carbon capture and storage (CCS) could be a solution and that OPEC would be willing to play its part to develop the technology. CCS involves capturing greenhouse gases such as carbon dioxide (CO2) that are produced from burning fossil fuels, and storing them underground chiefly in depleted oil and gas fields. CCS may be one of the best ways to cut emissions of man-made heat-trapping gases blamed for global warming, but development has been slowed by high costs and legal and safety risks, a United Nations study said. The technology, most valued for capturing carbon from coal, may benefit oil producers economically, not least because the CO2 can be used to push yet more oil out of near-depleted wells.

ITN Source | November 17, 2007

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