Opec’s daily output to rise by 2m barrels

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RIYADH Dec 9: The decades old policy of thinning the ranks of Opec has gone sour. Three countries, Angola, Sudan and Ecuador are knocking at the oil cartel’s doors in Vienna with membership applications and the fourth one, Cuba, may not be far off too. These new members will add two million barrels to the Opec’s daily output.

Things have indeed turned a full cycle. Gone are the days, when some were itching to get out of the Opec on one pretext or the other and the world’s largest consumer, the United States may not be, too, happy with the proposition.

“Fidel (Castro) is headed for Opec,” a beaming Hugo Chavez, the nemesis of the United States, who has now been re-elected for another 6 years, jokingly said in Havana while attending the non-aligned summit last September. “He is finding oil.”

Not only the economic woes of Castro’s Cuba would be taken care of but the ‘Big Brother’ would also be forced to re-evaluate its policies on Cuba. After all, energy resources command considerable respect, too.

But Chavez was not merely kidding. To be fair, Cuba is still far from joining the exclusive club and by no means is on the verge of the ‘oil revolution’ but it could not out rightly be rejected as another of the leftist Chavez’s ploy and antics.

A US Geological Survey report published last year estimated that 4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas could lie within the economic zone in the North Cuba Basin. The 112,000 km area has been divided into 59 exploration blocks and was opened to foreign companies in 1999.

Consequently, six companies have signed exploration deals for 16 blocks in the Gulf of Mexico. Chinese giants, Norsk Hydro of Norway, Spain’s Repsol and the Indian ONGC are already active in the area. Canada’s Sherrit International and Brazil state oil company Petrobras are also reportedly involved in prospecting.

And though the prospect of Cuba getting into the fold of Opec could still be a far-fetched idea, some others are already knocking at the doors of the organisation. And the knock is fairly audible by now.

Angola, Sudan and Ecuador have, however, by now have openly expressed their intention to bid for an entry into the oil cartel – signalling the virtual end of the policy of the industrial world to somehow loosen and lessen Opec’s control on oil and energy markets. And these three countries already have established credentials to aspire for Opec membership.

These three countries, if and when admitted into Opec’s fold, would boost the cartel’s overall output by two million barrels a day or six per cent and bring 10.5 billion barrels of additional proven reserves to the club.

Angola, the sub-Saharan Africa’s second-biggest oil producer, is gradually emerging from a 27-year civil war. An oil ministry spokesman in Luanda said last week that Angola planned to join Opec in March next year.

With the help of foreign investment, Angola’s oil production is expected to hit 2 million barrels a day next year. “Angola is joining because revenues are rising so spectacularly fast at the moment that it gives it more influence on the world stage,” said Nick Shaxson, Angola head at the UK-based Chatham House think-tank.

A move into Opec by Angola though would not go down well in Washington, the biggest importer of Angola’s oil, analysts insist. US groups Chevron and ExxonMobil, the biggest investors in Angola’s oil sector, are likely to be equally wary. Tough signals are apparently being spread through the announcement in the wrong quarters.

Sudan is the region’s third-biggest producer. In Khartoum, an oil ministry official was quoted as saying that Sudan was waiting for President Omar Hassan al-Bashir to approve a move to join Opec. Sudan currently pumps about 330,000 barrels a day and with the ongoing activities in the country the figure is expected to go up considerably in near future.

With Sudan under fire for the conflict in its western Darfur region, joining Opec could give it considerable leverage in its confrontation with the United Nations over atrocities and its refusal to allow UN peacekeepers into Darfur, some insist.

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