September 14, 1960: Baghdad. Iran, Iraq, Kuwait, Saudi Arabia and Venezuela met for the first time and formed OPEC - the Organisation of Petroleum Exporting Countries.
A remarkable day for the globla energy industry, and no-one present on that monumental day could have ever preduicted the power, influence and effect OPEC would have. Not could they have predicted some of the dramatic industry events of the last five decades.
Initially made up of five oil-exporting countries, which decided to join forces to safeguard their legitimate rights and exercise control over their petroleum resources after years of manipulation, this intergovernmental organisation now numbers 12.
Since formation, OPEC has been committed to three main objectives. These comprise securing a steady income for the producing countries; ensuring an efficient, economic and regular supply of petroleum to the consuming nations; and bringing about a fair return on capital for those investing in the petroleum industry.
These objectives form the basis of all OPEC's decisions.
But five decades on, is OPEC really fulfilling its objectives?
Globalisation, new trading opportunities with previously closed-door economies, emerging economies with voracious energy appetites - all have affected OPEC and the globla energy map.
OPEC has undoubtedly overcome a series of formidable challenges, but is it ready to face the new reality of oil supply - increasingly insular, domestic supply for domestic needs, the demands of the BRIC economies, ageing fields, new energy sources - to name a few?
Has OPEC served its purpose? Is there room for such a cartel in the new economy? What do you think of OPEC? Is it badly needed or an outdated, price-fixing institution?
We will be publishing a special feature on OPECs 50th anniversary in our September 2010 issue of Pipeline. We'd love to hear your thoughts.
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written by Mark Roche, August 16, 2010
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