The group will instead reiterate a commitment to ensure energy supply and seek to reduce their carbon emissions released from pumping and refining oil and gas, according to the statement to be issued in Riyadh, which was seen by Bloomberg and confirmed by three officials from the group who spoke on the condition of anonymity.
Their intention to keep production at current levels signals consumers are unlikely to see relief from high oil prices, which reached a record $98.62 a barrel on Nov. 7 in New York. A pledge to reduce carbon dioxide threatens to force investors in OPEC nations such as Royal Dutch Shell Plc and Exxon Mobil Corp. to incur extra costs at their operations.
``I don't think we can expect any move from OPEC to reduce prices,'' Jean-Francois Gruson, an economist with the Institute for French Petroleum, said today. The group will take a ``wait-and- see'' approach, he said.
Saudi Oil Minister Ali al-Naimi and his counterparts from Qatar and Algeria have said this week that the group won't decide on production quotas at the Nov. 17-18 heads of state summit in Riyadh and will instead take up the matter at a Dec. 5 meeting in Abu Dhabi. U.S. Energy Secretary Samuel Bodman said two days ago in Rome that he met OPEC officials and asked them to consider raising production further.
Not in Control
``OPEC shouldn't be blamed for the price of oil, it's out of our hands,'' said Qatari Oil Minister Abdullah bin Hamad al- Attiyah. ``It's speculators who are putting money in oil.''
The Organization of Petroleum Exporting Countries should be wary about the impact of near-record crude prices on consumption after demand from power stations was sapped by high price levels in the 1970s, the group's president, Mohamed al-Hamli, said today.
``High prices so far have limited impact on demand, however we can't remain complacent, this high price is potentially dangerous,'' said al-Hamli, who is also the oil minister of the United Arab Emirates.
The heads of state summit is only the third since OPEC was founded in 1960. Algeria's Chakib Khelil will take over as OPEC president in 2008.
``OPEC, as an international organization, has to show concern towards the major problems of the planet, like climate change,'' Robert Mabro, president of the Oxford Institute of Energy Studies, said in an interview today in Riyadh. ``How and whether it can contribute significantly remains to be seen.''
Carbon Technology
OPEC has proposed a $3 billion fund for research and development of carbon emission sequestration technology, Ivo de Boer, executive secretary of the United Nations Framework on Climate Change, told a press conference in Riyadh. Under the proposal, OPEC would contribute $1 billion to the fund, industrialized nations $1 billion and developing countries $1 billion, he said. ``I doubt that developing countries will support it.''
OPEC Secretary General Abdalla el-Badri declined to confirm the investment figure. ``OPEC will contribute its part to research in this respect,'' he said. ``The heads of state will discuss the environment, it will be a positive statement.''
Fossil Fuel Share
The share of fossil fuels -- oil, gas and coal -- will rise to 82 percent in 2030 from 81 percent in 2005, according to the International Energy Agency. Global energy demand will rise by about 1.8 percent a year, with consumption growing fastest in developing countries, such as China and India.
Should consuming countries adopt policies to reduce consumption and combat climate change, the fossil-fuel share could drop to 76 percent by 2030, according to an alternative projection by the IEA, meaning slower growth in demand for OPEC's oil.
``Since fossil fuels are going to be around for some time, we need to develop technology to reduce'' carbon emissions, al-Naimi said in Riyadh today. ``We are all called upon to address the climate-change concern and find a balance that is a possible, comprehensive and cost-effective solution.''
``The technology is available to reduce emissions and Saudi Arabia is willing to participate,'' he said.
Hurting Demand
High oil prices are already damaging demand in some industrialized nations, according to the Paris-based IEA, which this week cut its forecasts for fourth-quarter world consumption for a third time since August. Gasoline pump prices in the U.S. are above $3 a gallon.
Collectively, OPEC's 12 members pump more than 40 percent of the world's oil and will spend some $150 billion by 2015 on new projects, OPEC's el-Badri said yesterday.
Ecuador is expected to formally rejoin OPEC this weekend, expanding the group's membership to 13 countries.
The producers' club is gaining influence on the back of high prices. Importing nations have transferred an additional $3 trillion to OPEC than they otherwise would have since 2001 had oil prices stayed near $20 a barrel, according to Goldman Sachs Group Inc.
With world energy demand expected to double by 2050, and renewable energy, including wind power, only constituting a third of the energy mix, ``the challenge is enormous,'' the UN's De Boer, said in a speech today in Riyadh.
``OPEC has an important role to play in investing in research and development of clean technologies'', De Boer said. ``Emissions have to be reduced to secure our survival.''
Via: Bloomberg |by Maher Chmaytelli and Fred Pals
Tags:
