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Sudan to decide soon on whether to join OPEC

KHARTOUM (Xinhua) – Sudan will soon take a decision on whether to join the Organization of Petroleum Exporting Countries(OPEC), a Sudanese official said here on Sunday.

"Sudan is now qualified to join OPEC according to conditions set by the organization for membership," Undersecretary in the Ministry of Energy and Mining Omer Mohammed Khair told reporters.

Commenting on Nigerian President Olusegun Obasanjo's recent call for Sudan to join OPEC, the official said that making a decision on this issue demanded careful studies over both the positive and negative aspects if Sudan entered the oil cartel.

He also said that more and more foreign enterprises had been attracted to invest in Sudan's oil production field, adding that Sudan welcomed investors from all over the word provided that they respected laws and sovereignty of Sudan.

Sudanese President Omar el-Bashir received last Wednesday a written message from the Nigerian president inviting Sudan to join OPEC. Nigeria is the current chairman of OPEC.

El-Bashir promised to study the invitation and respond to it in the near future.

In an interview with the Qatari al-Jazeera satellite television on Saturday, Sudanese Minster of Energy and Mining Awad Ahmed al-Jaz said that petroleum existed in all parts of Sudan. "The petroleum production is one of the important factors that matter in realization of peace in Sudan," he added.

The minister reiterated that the doors of the country were opened to all investors regardless of their nationalities, adding that the only condition for investment was the respect for Sudan's sovereignty and nonintervention in its internal affairs.

About the U.S. companies, the minister said that Sudan did not reject them to invest in Sudan's oil industry, but added that their operations in Sudan were affected by Washington's sanctions against Sudan.

"Sudan has proved to the world that it is capable of solving its problems and benefiting from its natural resources," al-Jazsaid, citing success by many foreign oil companies operating in Sudan.

OPEC set to pump at full flow

The OPEC cartel appears set to maintain its oil output levels at a meeting in Venezuela this week, reluctant to rock a high-flying market that is reaping its 11 members a bonanza of petrodollars, Fin24 reported.

The Organization of Petroleum Exporting Countries will hold its latest talks in Caracas on Thursday - giving Venezuela's firebrand President Hugo Chavez a high-profile stage to exhibit his anti-U.S. rhetoric, if he wishes.

In an unusual move, Chavez himself will address the meeting of OPEC oil ministers. Venezuela, OPEC's only Latin American member, has called for the cartel to cut its output, arguing that global supplies are plentiful.

Analysts believe that the call by Chavez's government will receive short shrift from the other OPEC members led by the cartel's kingpin, Saudi Arabia.

But Venezuela, backed by Iran, its fellow anti-U.S. adversary in the group, is likely to persist with proposals to price oil in euros rather than dollars, and for OPEC to adopt a minimum target price of $50 a barrel.

Slowing demand a worry

And talk of a cut from OPEC's total production quota - 28 million barrels a day - might get a better hearing down the line if the world economy slows down this year, as many expect.

"As long as prices are hanging above $70 a barrel, the likelihood of a production cut by OPEC is virtually zero," Alaron Trading energy analyst Phil Flynn said.

"But I do think that a lot of the OPEC producers are going to be concerned about the talk of slowing demand. So it wouldn't surprise me if they drop hints of a possible cut somewhere down the road," he said.

OPEC's member countries - Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela - hold about two-thirds of the world's oil reserves.

They supply 40% of the world's oil production and half of its exports. Sudan has now been invited to join Opec.

Price pressure

Heading into the Caracas meeting, the cartel is under pressure from the world's most powerful economies to do more to bring down record-high oil prices and so limit the potential of a marked deterioration in global growth.

At a meeting last month of the Group of Seven industrial powers, British Chancellor of the Exchequer Gordon Brown said OPEC "must look at its production quotas and it must look at both how we can increase output and refining capacity".

But OPEC leaders have repeatedly said it is up to major consumers like the United States to boost their refining capacity to get more crude to customers in the form of gasoline and heating oil.

Cartel members also argue that they are powerless to rein in a speculative frenzy that has seized upon geopolitical jitters linked to Iran's nuclear ambitions and unrest in Nigeria.

Increasing demand for energy from fast-growing China and India has also played a role in the oil market's startling rally of recent years.

Pumping out all the crude they can

More immediately, gasoline demand looked set to remain strong as U.S. drivers take to the roads en masse for their summer holidays.

In any case, OPEC members with the exception of Saudi Arabia are pumping out all the crude they can. Many are flouting the cartel's official quotas so that they do not lose out on the market boom, analysts say.

"With prices so high now, the countries who are above quotas are going to blissfully ignore the formal levels," said James Williams, energy economist at WTRG Economics, citing Algeria, Kuwait and Libya.

"If it comes to the point that OPEC does have to cut output, say at year-end, they will have to realign their quota system if they're going to have an effective cut in actual production," he said.

"But at this point, don't expect any change to quota or production levels."

Prince of Persia
1,928 Posts
Good news (it will bring up the oil price)
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