Table of contents

Introduction, ..................................................................................... 2

When was OPEC founded? .............................................................. 2

Which countries are members of OPEC? ,…………..........................2

World map showing OPEC Member Countries, ………...................4

How does OPEC function? the main Objectives ,…………................5

What is the OPEC Conference? ,………….......................................7

Who are the Heads of Delegation? ,……..…….................................7

What is the Board of Governors? ,…………....................................7

What is the Ministerial Monitoring Sub-Committee? ,………….......8

What is the OPEC Secretariat? ,........................................................8

What is the Economic Commission Board? ….................................8

OPEC History in Brief, .....................................................................9

OPEC Share of World Crude Oil Reserves. …….............................9

OPEC Crude Oil Production 2007. ……........................................14

Does OPEC control the oil market? …..............................................16

Rising oil prices are the most visible indication of change .....…......16

OPEC effecting World Politics &World Politics effecting……….....17

OPEC’s Future Prospects; ..............................................................19

Conclusions........................................................................................20
REFERENCES.................................................................................21

:Introduction

The Organization of the Petroleum Exporting Countries )OPEC(

Is a permanent intergovernmental organization of 12 oil-exporting
developing nations that coordinates and unifies the petroleum
policies of its Member Countries? OPEC seeks to ensure the
stabilization of oil prices in international oil markets with a view to
eliminating harmful and unnecessary fluctuations, due regard being
given at all times to the interests of oil-producing nations and to the
necessity of securing a steady income for them; an efficient, economic
and regular supply of petroleum to consuming nations; and a fair
return on capital to those investing in the petroleum industry.

?When was OPEC founded

OPEC was founded at a meeting held on September 10-14, 1960
in Baghdad, Iraq, by five major oil producing countries: Iran, Iraq,
Kuwait, Saudi Arabia and Venezuela. These countries are referred to
as the Founder Members of the organization. OPEC was registered
with the United Nations Secretariat on November 6, 1962 (UN
Resolution No: 6363).

?Which countries are members of OPEC

The OPEC Statute stipulates that: "any country with a substantial

net export of crude petroleum, which has fundamentally similar
interests to those of Member Countries, may become a Full Member
of the Organization, if accepted by a majority of three-fourths of Full
Members, including the concurring votes of all Founder Members".

Founder Members of the Organization are those countries which

were represented at OPEC's first Conference, held in Baghdad, Iraq,
in September 1960, and which signed the original agreement
establishing OPEC.

Full Members are the Founder Members, plus those countries whose
applications for Membership have been accepted by the Conference .

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Associate Members are the countries which do not qualify for full
membership, but which are nevertheless admitted under such special
conditions as may be prescribed by the Conference.

.OPEC Countries Members

Founder Year of accession Location

Members

IR Iran 1960 Middle East

Iraq 1960 Middle East

Kuwait 1960 Middle East

Saudi Arabia 1960 Middle East

Venezuela 1960 South America

Full Members

Algeria 1969 Africa

Angola 2007 Africa

Indonesia 1962 Asia

SP Libyan AJ 1962 Africa

Nigeria 1971 Africa

Qatar 1961 Middle East

United Arab Emirates 1967 Middle East

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3
?How does OPEC function

Representatives of OPEC Member Countries (Heads of Delegation)

meet at the OPEC Conference to coordinate and unify their petroleum
policies, in order to promote stability and harmony in the oil market.
They are supported in this Endeavour by the OPEC Secretariat,
directed by the Board of Governors and run by the Secretary General,
and by various bodies, including the Economic Commission Board
and the Ministerial Monitoring Sub-Committee. Member Countries
consider the current oil market situation and forecasts of market
fundamentals, such as economic growth rates and petroleum demand
and supply scenarios.

The main Objectives

 To co-ordinate and unify petroleum policies among Member
Countries,
in order to secure a steady income to the producing countries; an
efficient, economic

 Regular supply of petroleum to consuming nations; and a fair

return on
Capital to those investing in the petroleum industry.
 The Organization shall devise ways and means of ensuring the
stabilization of prices in international oil markets with a view
to eliminating harmful and unnecessary fluctuations.

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.Organization of the Petroleum Exporting Countries, Ordinal Layout

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?What is the OPEC Conference

The Conference
Is the supreme authority of the Organization? It consists of
delegations normally headed by Their Excellencies the Ministers of
Oil, Mines and Energy of Member Countries. The Conference
generally meets twice a year — in March and September — and in
Extraordinary Meetings whenever required. It operates on the
principle of unanimity. It is responsible for the formulation of the
general policy of the Organization and the determination of the
appropriate ways and means of its implementation. The Conference
also decides on applications for membership to the Organization, and
on reports and recommendations submitted by the Board of
Governors on the affairs of the Organization. It approves the
appointment of Governors from each Member Country and elects the
Chairman of the Board. Moreover, the Conference directs the Board
to submit reports or make recommendations on any matter of
interest to the Organization, and considers and decides upon the
Organization’s budget, as submitted by the Board.

?Who are the Heads of Delegation

To OPEC are the official representatives of each Member Country to

the OPEC Conference. They are, therefore, normally Their
Excellencies the Ministers of Oil, Mines and Energy of Member
Countries.

?What is the Board of Governors

The Board is composed of Governors nominated by Member

Countries and confirmed by the Conference.
o The Board directs the management of the Organization;
implements Resolutions of the Conference; draws up the
Organization's annual budget and submits it to the
Conference for approval.
o It also decides upon any reports submitted by the Secretary
General, and submits reports and recommendations to the
Conference on the affairs of the Organization.

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 What is the
Ministerial
Monitoring Sub-
?Committee
(MMSC) was
established in February
1993 at the 10th
Meeting of the
Ministerial Monitoring Committee and given the mandate to monitor
oil production and exports by Member Countries. The MMSC
comprises three Heads of Delegation and the Secretary General.

?What is the OPEC Secretariat

Functions as the Headquarters of OPEC. It is responsible for
carrying out the executive functions of the Organization, in
accordance with the provisions of the Statute, under the direction of
the Board of Governors. The Secretariat consists of the Office of the
Secretary General, the Research Division, and the Petroleum Market
Analysis, Energy Studies, and Administration & Human Resources
Departments. The Secretariat was originally established in Geneva,
Switzerland, in 1961, but was moved to Vienna, Austria, in 1965. The
8th (Extraordinary) Meeting of the OPEC Conference approved the
Host Agreement with the Austrian Government in April 1965, prior
to the opening of the Secretariat on September 1, 1965.

?What is the Economic Commission Board

--- The Economic Commission Board (ECB) is a specialized body

operating within the framework of the Secretariat that assists the
Organization.
--- The ECB is composed of National Representatives from
Member Countries, the Secretary General and a Commission
Coordinator.

OPEC History in Brief

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  At the end of World War II the “seven sisters”, western private
oil majors (today still well known), controlled 98% of crude oil
involved in international trade (oligopoly, considerable
economic rents)
 -1960: five countries (Iran, Iraq, Kuwait, Saudi Arabia, and
Venezuela) founded the Organization of Petroleum Exporting
Countries
 1960s: several other countries joined OPEC; cartel
organization proceeded
 1970s: de facto nationalization
 End of 1980: situation changed (oil demand dropped
significantly,
Production from non-OPEC suppliers increased, OPEC’s market share
Decreased to only 46%)
 Country quotas of production were introduced
 Saudi Arabia becomes a swing producer increasing or
decreasing its
Production in order to equalize OPEC production and market
demand at the Current marker price.

.OPEC Share of World Crude Oil Reserves

Oil reserves refer to portions of oil in place that are claimed to be

recoverable under current economic constraints. In this context, oil
refers to conventional oil and excludes oil from coal, oil shale,
bitumen and extra-heavy oil (tar sands).

According to current estimates, more than three-quarters of the

world’s oil reserves are located in OPEC countries. The bulk of OPEC
oil reserves is located in the Middle East, with Saudi Arabia, Iran and
Iraq contributing 56% to the OPEC total.

Oil in the ground is not a "reserve" unless it is claimed to be

economically recoverable

OPEC Proven crude Oil Reserves, from 2000-2006,

(m.b)

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Countries
2000 2001 2002 20003 2004 2005 2006

Algeria 11,314 11,314 11,314 11,800 12,270 12,270 12,200

Angola 5,972 6,500 8,900 8,801 9,035 9,035 9,035

Indonesia 5,123 5,095 4,722 4,320 4,301 4,301 4,370

IR Iran 99,530 99,080 130,690 133,250 132,460 136,270 138,400

Iraq 112,500 115,000 115,000 115,000 115,000 115,000 115,000

96,500 96,500 96,500 99,000 101,500 101,500 101,500

Kuwait
SP Libyan 36,000 36,000 36,000 39,126 39,126 41,464 41,464
AJ
29,000 31,506 34,549 35,255 35,876 36,220 36,220

Nigeria
13,157 15,207 15,207 15,207 15,207 15,207 15,207

Qatar
Saudi 262,766 262,697 262,790 262,730 264,310 264,211 264,251

Arabia
United 97,800 97,800 97,800 97,800 97,800 97,800 97,800
Arab
Emirates
Venezuel 76,848 77,685 77,307 77,226 79,729 80,012 87,035
a

OPEC 846,510 854,384 890,579 899,515 905,694 913,290 922,482

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 OPEC Crude Oil Production for 2007
.

The OPEC oil production reached to 30.673 MM BPD at end of

2006, but the production increase & reached to 36.841 MM BPD at
end of 2007. where the most of Oil production coming from Saudi
Arabia, Iran & Iraq.
The increase or decrease in production depends upon the politics,
even such as War… the World demand & the population increment.

OPEC Crude Oil Production 2007 (– ‘000 B/D)

 
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Algeria 1,340 1,320 1,330 1,340 1,360 1,370 1,370 1,380 1,380 1,380 1,390 1,390
Angola 1,500 1,550 1,600 1,600 1,610 1,620 1,650 1,670 1,710 1,730 1,780 1,780
Indonesia 860 860 850 840 850 840 840 840 840 830 830 840
Iran 3,900 3,860 4,430 4,170 3,810 3,900 3,920 3,850 3,820 4,380 3,930 3,930
Iraq 1,680 1,900 2,000 2,040 2,000 1,950 2,100 1,950 2,130 2,270 2,390 2,590
Kuwait 2,420 2,420 2,400 2,420 2,450 2,420 2,420 2,450 2,450 2,470 2,520 2,520
Libya 1,700 1,690 1,690 1,690 1,760 1,740 1,750 1,770 1,770 1,770 1,790 1,800
Nigeria 2,200 2,200 2,100 2,200 2,050 2,100 2,170 2,200 2,180 2,190 2,200 2,150
Qatar 800 790 790 800 800 800 820 820 820 820 840 830
S Arabia 8,700 8,500 8,500 8,500 8,560 8,600 8,600 8,680 8,720 8,820 9,050 9,100
UAE 2,500 2,500 2,520 2,520 2,550 2,550 2,550 2,550 2,510 2,550 2,150 2,480
Venezuela 2,450 2,450 2,420 2,400 2,400 2,420 2,400 2,420 2,420 2,420 2,420 2,410

OPEC 30,050 30,040 30,630 30,520 30,200 30,310 30,590 30,580 30,750 31,630 31,290 31,28
0

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14
 Summary of Reserve Data as of 2007
Country Reserves 1 Production 2 Reserve life 3
(109bbl) (106bpd) (years)
Iraq 115 2.08 151
Kuwait 99 2.45 111
UAE 97 2.49 107
Iran 136 3.99 93
Venezuela 80 2.42 91
S Arabia 260 8.69 82
Libya 41.5 1.74 65
Nigeria 36.2 2.16 46
Qatar 15.207 0.81 51
Algeria 12.2 1.36 25
Angola 9.035 1.65 15
Indonesia 4.37 0.84 14
Reserve life in years, calculated as reserves / annual production. (From above)

Does OPEC control the oil market?

 Non OPEC does not control the oil market. OPEC Member
Countries
produce about 40 per cent of the world's crude oil.
 change can be observed—so if a mistake is made, it may go
undetected for several years
and then take several years more to rectify.

Rising oil prices are the most visible indication of change.

There has been a coincidence of factors

driving oil prices higher

 Strong demand for the world

 More demand from growing the countries.
 Increasing transportation fuel demand
 Employs the oil and gas, Substitution of coal.

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OPEC effecting World Politics.

 Internal rivalries between OPEC members have combined to

blunt the power of the oil weapon and weaken the cartel.

 OPEC can still influence, but no longer dictate oil prices, and the
organization's political clout has waned.
OPEC has also tried to use its economic clout for political purposes,
most notably during the Yom Kippur War of 1973 (also known as the
October War). OPEC used oil to pressure the United States not to aid
Israel's war effort. Only two days into the war OPEC members (led by
Iran and Saudi Arabia) demanded a 100 percent increase in posted
prices. President Nixon had received warning of a major petroleum
supply crisis that would occur if the U.S. government should increase
military aid to Israel; nevertheless, on October 19 Nixon requested
$2.2 billion to cover the cost of an enormous airlift to Israel. This
move incensed King Faisal of Saudi Arabia, who announced an
embargo on oil shipments to both the U.S. and the Netherlands.

.World Politics effecting OPEC

 Coups, and instability, and threats directed at the Iran

promoting democracy,.
  U.S. foreign policy objectives such as
 Promoting democracy,.
 preventing nuclear proliferation and
 defeating terrorism,

 War with Iraq would be all about America's desire to gain

control of oil supplies there and elsewhere in the Middle East.
(BUT Iraq, along with other important producers, must export its oil
to gain the resources to buy goods, including weapons since oil is
sold in a fluid world market, any nation).

On September 11, across the nation Americans will gather in

remembrance of the nearly 3,000 victims of the worst terror attack in
U.S. history. Yet, even as we gather in mournful homage,
representatives of the nations largely responsible for the tragedy will
meet in Vienna, Austria, at the 141st gathering of the Organization of

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Petroleum Countries (OPEC) with a different purpose: keeping oil
prices high to ensure the continued flow of petrodollars into their
coffers. Indeed, OPEC's current secretary general and president,
Edmund Daukora of Nigeria, already has pronounced the $70 plus
per barrel prices that have prevailed lately "satisfactory" and
Venezuela's radical Hugo Chavez has said the upper limit on what we
can be charged for crude is.

much of this windfall is a direct consequence of OPEC members'

failure to invest in further developing their reserves.

 Iraq's reserves alone are equal, by some estimates, to those of

Russia, the United States, China and Mexico combined.

The most important Polities actions which effected in OPEC history.

October Arab exporting nations imposed an embargo on the
1973 countries supporting Israel.
1974 -1978 oil prices were relatively flat ranging from $12.21 per
barrel to $13.55 per barrel.
1978 Iranian revolution resulted in the loss of 2 to 2.5
million barrels of oil per day.
September Iraq invaded Iran, the combined production of both
1980 countries was only a million barrels per day.
(1980-1986) The higher prices also resulted in increased
exploration and production outside of OPEC, non-
OPEC production increased 20 million barrels per day
1986 Increase in oil production by Middle East countries to
cover expenditure of war...
1990 Increase in oil price due to Gulf War…
1998 The rapid growth in Asian economies been halt
1999 OPEC production drop by about 3 million barrels per
day for increase of oil price…
2001 Weak USA economy and increases in non-OPEC
production.

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OPEC’s Future Prospects;

For OPEC's success or contemplating its future course of action,

 each member has an incentive to produce beyond
its assigned quota.

 In fact, OPEC lacks an effective means to monitor, detect, and

punish members
who exceed their quotas.

 The truth of this maxim lies in the fact that without OPEC's control
of supplies there could be a huge surge in oil price volatility with
far-reaching, adverse effects on growth of the oil industry and on
the world economy at large.

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Conclusions

To conclude, this presentation can be summarized in the

following Six propositions
 
One: Think of the increase in production is not proper imagining.
because The oil don't producing keep forever

Two: The world should expect the consequences of economic, social

and political is the worst in history.

  Three Time has come for OPEC countries to seriously review their
objectives and priorities to maximize long-term revenues before they
succumb, again, to market forces

Four:  must OPEC is constantly looking at new ways and means of

improving its market awareness
 
Five : . OPEC cannot unilaterally maintain market stability nor should
it be expected to shoulder the responsibility alone. If producers and
consumers do not act in a concerted fashion, the market will impose
its own will.

Six : Evolution of the alternatives are the best for the time being

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 REFERENCES

www.opec.org

www.eia.doe.gov/

http://en.wikipedia.org/wiki/

Washingtonpost Magazine.

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