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King Edmund Maduabebe Daukoru
Former Minister of State for Energy
Former OPEC Secretary General
Nigeria

Decade after more challenging decade since its birth in 1960, the Organization of the Petroleum Exporting Countries (OPEC) has spectacularly, most times stoically, lived up to the noble ideals of its charter.

Most noteworthy has been OPEC’s global ethos to credibly reconcile the polar roles of lawful sovereign ownership of Member Countries’ vast crude oil assets on one hand and the moral role of being a global custodian and trustee over nature’s generous and merciful endowment on the other. In so doing, OPEC has immensely contributed to the continuing quest for stabilization of the energy markets, aiming to assure a good measure of balance between supply and demand, thus creating a basis for global economic growth that can deliver shared prosperity for all.

Regardless of this, we have to acknowledge that we live in a world driven by change and the adversarial clash of ideas, where perceived right and wrong are not always what we know them to be. Prevailing examples are: the reality of speculators, whose raison d’etre is to make a quick kill by sundown; influential iconoclasts and political advisors who might prefer a return to a future of mercantilism; and some sharp editorial pens in the media that continue to suspect OPEC’s continuing high intentions, if not the plain cause-and-effect of carbon emissions and global warming.

In spite of these issues, OPEC has continued to thrive, keeping membership at a dynamic balance of between 12 and 14 over an extended period of time, with current strong participation by Gulf of Guinea producers. Cooperating non-OPEC producers ( OPEC+) now command production of around 60 per cent that of OPEC, and are able to share the burden of assuring stable oil prices under conditions of balance in supply and demand. Finally, the dialogue between OPEC and major consuming countries has become a consolidated example of global economic cooperation, with the hope this possibility will extend out to gas trading.

With so much to draw comfort from, I am persuaded that OPEC will be more than able to weather the now gathering clouds of a major price crash triggered by COVID-19. Success will prove once again the Organization’s capacity to revalidate itself.

May the drums roll in celebration of an Organization born in difficult circumstances in 1960, and which is turning 60 during an emerging global meltdown, the likes of which has rarely been seen in peace time.

I extend a big and special salute to the outstanding leadership of the incumbent Presidency and the Conference of Ministers, as well as the Secretary General and entire Secretariat for their continuing dedication, professional efficiency, and executive excellence.

Happy 60th Anniversary.

HE Ali I. Naimi
Former Minister of Petroleum and Mineral Resources
Kingdom of Saudi Arabia

A sixty-year legacy of success

Without a doubt, the world has changed significantly over the past sixty years. In 1960, there were roughly three billion people on the planet—less than half today’s figure. That year the first weather satellite was launched, though it would be another year before the first man would travel into space. The state-of-the-art computer, the newly introduced IBM 1401, utilized punched cards and magnetic tape, weighed five tons, and had just 16kb of memory. And in the 1960 European Football Championship final, the Soviet Union defeated Yugoslavia; neither country even exists today. In the realm of petroleum, global oil production in 1960 was roughly a quarter of today’s total, while a barrel of West Texas Intermediate sold for around three dollars—still only about $26 when adjusted for inflation.

What a difference six decades make.

Since 1960, global patterns of crude oil production and consumption have shifted significantly with new players on both the supply and demand sides of the ledger. Consumption has increased steadily alongside rising standards of living and global population growth—simply put, more people are living more energy-intensive lifestyles than ever before. And new technologies have impacted every area of the petroleum business, from core operations to market functionality and end-use consumer applications. For 60 years, OPEC and its Member Countries have been active participants in—and often primary drivers of—these changes. For example, OPEC producers have done more than just satisfy growing demand for oil: it is their reliable supply of petroleum that enabled the global economic growth which in turn gave rise to increased consumption. In other words, OPEC production has fueled the rise of developing nations while maintaining living standards in developed countries, and created access to energy for many of the world’s poorest communities and societies. So in many ways, OPEC’s reliable supply of petroleum is the foundation upon which the global economy has been built and which continues to underpin growth and prosperity. But while much has changed, some things remain constant: the capacity of OPEC’s membership to provide people around the world with energy, the commitment to promoting stability in the oil market, and the desire to satisfy the needs of both petroleum producers and consumers, since sustainability of supply and demand are inextricably linked.

When OPEC was founded in September of 1960, I was entering my senior year at Lehigh University’s Department of Geology, so I witnessed all these changes in the petroleum industry first-hand. As an executive in Aramco, then as the President and CEO of Saudi Aramco, and still later as Saudi Arabia’s Minister of Petroleum and Mineral Resources, I had the privilege of playing an active role in many of these developments. So it is with a great deal of pride in the past, a great deal of optimism for the future, and a great deal of appreciation for all who have contributed to OPEC’s legacy of success that I will be celebrating the Organization’s landmark 60th anniversary.


HE Prof Dr Mana Saeed Al Otaiba
Personal Adviser to HH the President of the UAE
Former Minister of Petroleum and Mineral Resources
Former President of the OPEC Conference
United Arab Emirates

It is not easy for me to return back to writing about the historical stages that the oil industry witnessed either under the direct impact of OPEC or due to the political circumstances and events that some Member States went through.

But on the occasion of celebrating OPEC’s 60th anniversary, I find myself required to write about that matter, especially as myself and my dear friend Sheikh Ahmed Zaki Yamani were representing two of the most important and influential members of OPEC.

The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad on 10-14 September 1960. At first it comprised Saudi Arabia, Iran, Iraq, Kuwait, and Venezuela.  It has been headquartered in Vienna, Austria.

As for Abu Dhabi, it joined OPEC in 1967, barely a year after Sheikh Zayed bin Sultan Al Nahyan became Abu Dhabi’s ruler. Abu Dhabi’s membership then moved to the UAE after re-creation in 1971.

After my appointment as the head of the Petroleum Department in August 1969, I started to take interest in the Organization with hopes of realizing the fairest price for my country’s wealth that we felt — the leader and I – was being plundered by oil-producing companies that controlled the oil price and the volume of production. At that time, a barrel of crude oil priced at no more than $3, from which the country received less than $1/b. Such pricing continued until 1973.

That year, the UAE decided to ban oil from countries that supported Israel in its war with Egypt and Syria, followed by Saudi Arabia two days later.

Due to this a decisive decision, oil prices escalated until they reached $12/b at the end of 1974.

During the period from 1974 to 1978, prices stabilized at a level of between $12.50 and $14/b. OPEC production, at that time, was stable at 30 mb/d. However, such high prices – they were considered high at that time – contributed to higher production levels from outside OPEC, which increased from 25 mb/d to 31 mb/d.

The Iranian Revolution broke out in 1979 and oil supply dropped by 2 mb/d. The price of crude oil more than doubled to $25, which marked the highest value reached for a barrel of oil since World War II.

In 1980, the Iran-Iraq War started. Accordingly, oil production in both countries reduced from 6.5 mb/d before the war to reach around 1 mb/d in 1981. Due to the Gulf War, the average price of oil increased to $35/b in 1980 and then jumped to $37/b in 1981. This marked the highest-recorded price per barrel at that time.

OPEC tried to defend an official price of $28/b, then returned to defending a price of $18/b; however, the oil was still at $14/b.

Those who lived and worked in the oil sector will never forget the big drop in oil prices that started in 1986 after OPEC announced the fiercest price war. When Saudi Arabia declared its intention to regain market share against other OPEC producers, the whole situation started to change, but none of the OPEC Members surrendered and they decided to make a big cut. Accordingly, oil prices began to decline, sinking to as low as $10/b. Some OPEC countries were even selling a barrel for $7 at that time.

OPEC then agreed again that it should defend a price of $18/b. In December 1986, OPEC finalized an agreement to adjust oil output from 17 mb/d to 15.8 mb/d and again to defend that price. Oil prices remained under $18/b between 1987 to 1989, before hiking up to reach $23/b in 1990 after Iraq’s invasion of Kuwait.

Oil prices remained at $20/b for over seven years from 1990-1997, when Asian economies collapsed and caused what is known as the Asian Crisis. OPEC convened in Indonesia in 1997 and agreed to increase its production; this coincided with the collapse of demand. At the same time, Iraq started to export oil under the UN-controlled oil-for-food programme. Due to these conditions, oil prices declined and amounted to $10/b again, and the oil price average in 1998 recorded $11/b.

In 1999, oil prices rose to $16/b, then to $27/b in 2000, which resulted in a recovery for OPEC and oil producers.

In the years between 2000 and 2008, the demand for oil increased significantly around the world, based on demand growth from China and India, as well as the rest of the then-known emerging countries. However, the growing demand surprised OPEC, which was not ready for it. This resulted in a price increase due to the limited growth of oil supply vs. growing demand.

The year 2008 was disappointing, as the effect of speculation on oil prices intensified, which caused prices to increase to $147/b in July 2008 – the highest in history. However, prices declined in the second half of that year due to a decrease in speculation and reduced demand because of the global financial crisis that emerged as a result of the collapse of major American banks and real estate mortgage companies. The price decreased by the end of 2008 to less than $40/b.

In that year and at the historic meeting held in Oran, Algeria, OPEC resolved to make the largest collective production reduction in the history of the Organization. Accordingly, 4.2 mb/d was withdrawn from the market and prices recovered afterward.

In 2011, political disorder worsened in the Arab region in the aftermath of the Arab Spring. These disorders resulted in the stoppage of supplies from many producing countries such as Libya, Syria and Yemen.

The oil market lost approximately 1.6 mb/d of high-quality light Libyan oil, and no OPEC Member State could make it up. Therefore, oil prices rose, exceeding $100, and remained at that level until September of that year, due to the fact that Libya remained unstable, in addition to Syria and Iraq.

In 2012, the US and the EU imposed an embargo on the export of Iranian oil, which resulted in the withdrawal of about 1 mb/d of its oil from the market. This embargo resulted in growing fears of an Iranian military response, which kept oil prices high.

As happened in the 1980s, oil prices were above $100/b for 3.5 years, resulting in somewhat reduced demand and allowing new oil production fields to enter the market. The North Sea entered the market in the 1980s and shale oil entered in recent years.

Over its 60 years, OPEC has encountered many challenges, starting from the "Seven Sisters" authority over the oil market.

From the first day of the Organization, stabilizing oil prices has been the basis of cooperation between all of its Member Counties. Since its foundation, OPEC has been facing other market producers who have contributed in one way or another to market instability or rates at fair levels.

After such a historical review, it is evident that OPEC, despite all the difficulties and differences that it faced, was able to act as a strong and effective force. It has achieved a fair income for its countries, and contributed to progress and advancement of its people.




HE Rene G. Ortiz
Minister of Energy and non-Renewable Natural Resources
Former OPEC Secretary General
Ecuador

Wisely navigating OPEC’s 60-year world trajectory in oil and economics, one could easily reaffirm that this group of oil-exporting nations has reached the level of key world player and there is no return.

It is not an easy task for the world and for each Member Country to, first and foremost, comprehend and admit to such a growing world role, coming from a gathering of developing nations richly endowed with the market-valuable natural resources oil and gas. Needless to say, the sudden growing inflow of oil export earnings attached to the development dreams of individual nation’s members of the organization has been significant. Third, one must consider the implicit responsibility of this role, which also involves emotional involvement for some of those nations’ governments, as part of the world community. What a change!

An evaluation of the national results of 60 years of OPEC is not my role. This would require profound research.

Paraphrasing the author Ian Seymour (OPEC: Instrument of Change), the story of OPEC’s first 60 years has been, I would say, a moving transition to high-tech oil and gas E&P, as well as the refining and producing of fuels and petrochemicals for world trade.

In fact, OPEC Member Countries – since the feverish 1970s and 1980s – have been moving into the building of infrastructure, including in education, science and technology; and volatile international commodity markets, including market futures. They have faced ephemeral geopolitical waves and endless industry threats – like a “Sword of Damocles” – first oil substitution and now fossil-fuel free electrification or “zero CO2” fuel swaps, stemming from the COP21 Paris resolutions.

A maturing ‘star’

Natural resources and national endowment, man-made natural resources wealth and planet accountability: My take is to look back once again in order to see the future of natural resources in the world to come.

I know the time calls for celebration of the past 60 years and the changes which have occurred in just about every Member Country. Needless to say, I also recognize the appreciated and growing role of some OPEC Member Countries in geopolitical affairs. It has been highly touching and hugely responsible, if I may say! But that is what happens when a “star” appears and matures!

To conclude, to me it seems only logical that in the present international state of things, along with the extent of the science and technology advances achieved so far, to think again about natural resources. Maybe I am wrong, but I hope I am not. My feeling is that the next power struggle in political affairs will be – to paraphrase an expression of the 20th century, another “have versus have not” situation – in natural resources, and that it will be a matter of world markets building up a price structure that will satisfactorily reward those nations endowed with internationally needed resources, as well as the benefitting nations in need of manufactured resources for electric products.



HE Dr Subroto
Former Minister of Energy and Natural Resources
Former OPEC Secretary General
Indonesia

No country can develop without sufficient energy. Energy is a fundamental need for economic growth. Energy sufficiency is required for planning, long-term oriented policies, cooperation, and consistent implementation to achieve required investment.

Petroleum is still the most important source of energy for human life. Therefore, it needs to be handled professionally. At present, the global petroleum industry is facing several challenges. A slowing global economy, an unstable geopolitical situation, trade wars, and increasingly competitive new and renewable energy sources are challenges that need to be tackled.

Over the past few years, petroleum prices have continued to be depressed and hit their lowest level. When I was first elected as a Secretary General of OPEC in 1988, the world had just faced a decline in petroleum prices to their lowest level over the previous two years. The price reduction that occurred at that time was different from what is happening right now.

However, I believe, with global collaboration between OPEC Member Countries and non-OPEC oil producing countries, these challenges can be overcome. Working together is the only way to achieve petroleum market stability, which I believe will contribute to a more stable global economy.

Good collaboration with OPEC and non-OPEC countries can, I believe, solve all current challenges.

In my opinion, the existence and the role of OPEC in the future will remain and become even more robust, especially in the global petroleum industry. There is proof that 32 per cent of total global petroleum supplies and 80 per cent of proven global petroleum reserves are in OPEC Countries.

At the 60th Anniversary of OPEC, allow me to bring to mind the OPEC Mission, which is to “… coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of petroleum markets, in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers, and a fair return on capital for those investing in the petroleum industry.”

By working together to achieve this mission, OPEC will not only overcome the challenges of the global petroleum industry, but this Organization will become a platform that increases and strengthens the bond between Member Countries and non-OPEC oil producing countries.



HE Dr Purnomo Yusgiantoro
Former Minister of Energy and Mineral Resources
Former Minister of Defence
Former OPEC Secretary General
Indonesia

Currently, petroleum still plays an essential role in driving the global economy. However, the global petroleum industry nowadays is facing new challenges that have never been experienced before. In addition to the global economic slowdown due to trade wars, coronavirus and geopolitical instability in several regions, the emergence of new and renewable energy sources, which are increasingly competitive, has also become a challenge for the petroleum industry. Petroleum and other fossil fuels are also often placed in unwarranted narratives in the issue of climate change.

Instead of seeing fossil energy as a problem, I believe that the petroleum industry can and must be part of the solution to address the issue of climate change. Efforts can be made, among others, by applying the right technology.

The petroleum industry is indeed a sector that is high technology and capital intensive. Over time, technology has had an essential role in increasing petroleum production. As one of the solutions to climate change, advanced technology like carbon capture utilization and storage (CCUS) now needs to be pushed.

However, it is undeniable that large amount of investment is needed for this technology, especially regarding filling the technology gap between countries. Therefore, it is necessary for both OPEC and non-OPEC countries to collaborate and work together to find the right solution in this regard. I believe with mutual understanding and a strong desire to work together, these obstacles can be solved.

Also, considering that energy is a key to economic growth and social development, we need to effectively ensure that the global petroleum industry can continue to drive the economy and advance prosperity, both for the present and in the future. We need to consider that in the future, the global population will increase by far more, to nine billion by 2040. The availability of energy is necessary to meet demands that will continue to grow. This can only be achieved by utilizing all types of energy, both fossil and non-fossil, without differentiating between them.

Undoubtedly, technology will play a crucial role in finding effective solutions to the carbon emissions challenge, as well as maintaining energy supply — of all types — to meet rising future demand.

On the 60th Anniversary of OPEC, I believe that the key to a better future is good global cooperation. I believe that by working together, the technology gap will be solved, the available energy required by the world community will be supplied, and that petroleum’s contribution to the global economy will remain significant.



HE Parviz Shahbazov
Minister of Energy
Azerbaijan

Unity, solidarity and cooperation: these have been the culmination of all the goals and objectives of OPEC in its 60 years of operation. The current global situation, on the eve of the anniversary of OPEC, has once again demonstrated the importance of these values for the present and the future, as well as for the past of mankind.

The rapidly expanding coronavirus infection has severely tested the entire global community. It has caused sharp fluctuations in the world economy and the global oil market. The pandemic, which poses a great threat not only to human health, but also to development and peace, has taught each of us a lesson we will never forget: the indispensable importance of relentless and comprehensive cooperation.

History suggests that the epidemic is a challenge that can be overcome. People have always found ways out of such difficulties. Yet it should also be stated that such solutions have always been conditional upon right choices. We are now at a crossroads. We must choose between national isolation and global solidarity. The strength of mankind’s immunity against all epidemics and all kinds of crises will depend on choices of this kind.

The realization of the idea of OPEC 60 years ago was also the result of trust in cooperation among oil producing countries. It suffices to recall that the first step towards ensuring the interests of oil-producing and exporting countries and fair pricing for oil in the world oil market was a gentlemen’s agreement. At that time, oil-exporting countries overcame issues such as low and volatile prices, oil surplus and short-term market interests by getting organized and cooperating. The sharp drop in oil prices at that time required a change in the rules of the game in the market. Under those circumstances, OPEC was declared in Baghdad on September 14, 1960, and the Organization took control of a significant portion of world oil production and export from seven oil corporations. OPEC, which has come a long way since then, has witnessed many fluctuations and struggles in the oil market.

By properly fulfilling its regulatory mission in a variety of situations, the Organization has been able to respond adequately to new realities that have been changing the global energy balance and the configuration of the oil market. Just like the world’s energy landscape, the structure and content of OPEC has had to change. It is in this light that President of the Republic of Azerbaijan, Ilham Aliyev, speaking at the Davos Forum in January 2016, expressed his belief in positive outcomes if OPEC and non-OPEC countries cooperated more closely to tackle challenges in the global oil market. The creation of the OPEC+ format in December 2016 was a tangible organizational outcome of this challenge. With the establishment of OPEC+, the Organization reached a new level of development. It achieved a broader cooperation model and an effective regulatory mechanism. The ‘Declaration of Cooperation’ did not only assure the interests of the oil-producing and exporting countries that joined this process. It has also become a guarantor for regulation of the global oil market in accordance with changing circumstances under the influence of various factors and risks.

Thanks to this cooperation, Azerbaijan, as the first country in history to extract oil via industrial methods, joined the countries gathered under the OPEC umbrella.

Through the OPEC+ initiative and its support for decisions taken under the ‘Declaration of Cooperation’, it joined the process of stabilizing the world oil market, creating a balance of supply and demand, as well as enhancing the environment of cooperation. Baku, the capital city of Azerbaijan, was privileged to welcome the OPEC+ countries and share its positive aura as the historical homeland of the oil industry. One-hundred and seventy three years later, Baku presented itself to the world on this platform not only regarding oil, but also as a land of cooperation, as well as an advocate of unity and solidarity.

Solidarity is one of the most important values that will change the current situation for the better at a time when not only oil market balance, but the balance of the world as a whole is disturbed. Sometimes it is necessary to go through difficult ordeals to eventually find the right door out. For oil-producing countries, such a door could be the cooperation of OPEC and non-OPEC countries within the ‘Charter of Cooperation’. Undoubtedly, this would be the best present for the 60th anniversary of OPEC.



Dr Omar Farouk Ibrahim
Secretary General of the African Petroleum Producers’ Organization (APPO)
Former Governor for OPEC
Former Head of the PR and Information Department of OPEC
Nigeria


Come 10-14 September 2020, OPEC shall be celebrating the dogged pursuit of the same objectives, without change, for three-score years. There cannot be a better testimony of consistency of purpose and focus of the Organization than this achievement. From an organization of five developing oil producing and exporting countries from the Middle East and South America with no voice on the international oil market and hardly noticed by any developed country except the latter’s international oil companies (IOCs) – to which OPEC was a nuisance organization that they had to learn to live with – the Organization doubled its membership, attracting members from the Asian and African continents, within its first decade of existence.

From being an organization that world powers ignored in its first decade, it became an organization that the West wanted to crush from its second decade. As it marks its sixth decade in 2020, even the US, which has consistently been the most hostile to the Organization, has come to publicly accept OPEC’s indispensability for the healthy operation of the global oil market and by implication the world economy. For the first time in the history of the Organization, a US President facilitated the pursuit of OPEC’s objectives in April 2020. The only explanation one can adduce for this development is the universality and consistency of the objectives of the Organization. They accommodate the aspirations of oil producers, oil consumers and investors in the industry. What else can be more balanced?

In OPEC’s first decade, the IOCs were unhappy with the Organization for the audacity its individual Member Countries showed in coming together and speaking with one voice about securing fair and stable prices for petroleum producers. Until OPEC was founded, the IOCs  decided what the crude oil price should be, with little or no input from the owners of the resource, consulting mostly only with each other. Today the IOCs work together with OPEC towards the common goal of oil market stability.

By the second decade, due to some geopolitical developments, including the Middle East crisis, which resulted in some oil-producing countries – including some OPEC Member Countries – embargoing oil supplies to some Western countries for their support of Israel, state actors began to take strong positions against the Organization. Although those positions were generally cloaked in anti-trust laws, the reality was that the positions were influenced by geopolitics, especially the experiences of the oil embargoes of 1967 and 1973. The creation of the International Energy Agency (IEA) in 1974, not long after the second oil embargo of 1973, was meant to neutralize the influence of OPEC.  For decades, the IEA did not see eye to eye with OPEC. The establishment of the International Energy Forum (IEF) in 1991, with membership from both consuming and producing nations, provided the first formal platform for joint dialogue. Today, OPEC, the IEA and the IEF work as equal partners together on joint projects.

The birth of the OPEC and non-OPEC ‘Declaration of Cooperation’ (DoC) in 2016, spearheaded by the OPEC Secretariat with the support of Saudi Arabia and Russia – among others – was another huge step forward. But the game changer, which saw the US under President Trump recognize OPEC and support the pursuit of its objectives, was COVID-19. The pandemic brought to the fore the reality and indispensable role that OPEC has been playing for the last 60 years to stabilize the global economy. The pandemic took a huge toll on the global oil industry, seriously crippling it. Trump came to admit that OPEC’s objectives – securing a fair and stable prices for petroleum producers; securing an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry – were also in America’s interest. With that realization, he championed the successful dialogue between OPEC and non-OPEC oil producers with a view to realizing the statutory objectives of OPEC. For the first time since OPEC was created, the US joined hands to openly support oil production adjustments in order to stabilize the global oil market and by implication the world  economy.

The significance of this development goes beyond COVID-19. For many years, the US has threatened OPEC – and indirectly its Member Countries – with legal action over activities of the Organization. But does the action of their President in April 2020 not support the idea that OPEC should be commended for shouldering a burden that should be shouldered by all, including the US?

Is it not clear that but for OPEC, the relative stability that the global oil industry has witnessed in the last half a century would have been a mirage? Is it not clear that but for OPEC’s efforts at stabilizing the oil market, few investors would put their money in that volatile industry?

The next 60 years

When OPEC celebrated its 50th anniversary in 2010, I was asked by a journalist how I see the next 50 years of OPEC. My answer was: I do not hope to see OPEC in the form it is in today in another 50 years. The OPEC of 1960 was a group of third-world, developing countries whose economies were heavily dependent on oil revenues. They were meant to use their oil revenues to diversify their economies, including using a larger portion of their crude oil for local refining and petrochemical operations. When they succeed, they would no longer be at the mercy of developed countries.

Some OPEC Member Countries are doing well in this regard, but all of OPEC must work to succeed. This is even more important now that our leaders have signed the Paris Climate Change Agreement, which aims to eliminate or minimize fossil fuels as an energy source as soon as possible.




Dr Ramzi Salman
Former Governor for OPEC
Former OPEC Deputy Secretary General (DSG)
Iraq

As people get old, they often get asked to reflect on past events and recall, if possible, the highs of their career. My father always told me: “You only excel if you love and enjoy what you do.” Because of that, I enjoyed all my jobs and find it difficult to highlight just one. However, OPEC was different because of the added excitement of the challenges it had to face during the period of my involvement as a delegate, Governor or Deputy Secretary General (DSG). Personally, working for OPEC was more of a mission than a job.

The first phase of OPEC’s 60 years was spent setting up the Secretariat and getting organized to function as a multinational entity. The second phase involved preparing the trenches for confrontations to come. In the third phase, which covered more than a decade, straddling the 1970s, OPEC relished in playing the role of the Seven Sisters, ie setting oil prices. Leading to the 1980s, OPEC misread many signs and indicators of the market collapse ahead and was forced to go into a phase of retreat. Subsequently, countries with a cash surplus became borrowers. Beyond that, after a partial recovery, OPEC followed a short-sighted roadmap with continued ups and downs.

Prior to my appointment as DSG, I was involved with OPEC for over a decade from a technical perspective. Initially as a delegate, then as a Governor for Iraq. Being involved in marketing since 1972, I often felt that OPEC work needed more first-hand market input. This led me to introduce a culture of starting every ministerial meeting with market-related presentations, especially when prices and production levels were the main agenda items. Ministers are politicians first, not technicians, and having a better understanding of these issues is a prerequisite for good decision-making. This was highly appreciated and became a tradition.

A memorable event from my time as DSG was linked to OPEC’s former headquarters building. While the SG was away, I was asked to sign the lease renewal contract. I was in the habit of reading everything, even the fine print, before signing. I recall requesting a copy of the agreement with our Austrian host. Austria was expected to treat OPEC in parity with the UN and its organizations, which meant providing the headquarters at no cost. Negotiations with our host were friendly, thorough and mutually beneficial, resulting in waived future rents. As an added bonus, the meeting areas in the building and its facade were totally redesigned and renovated as part of the agreement. Unfortunately, in jest, we did not manage to reclaim rents paid since moving to Vienna. The renovated facade with its symbolic blue pipes and giant bronze globe fountain became a distinctive marker of OPEC’s presence at the city’s Danube canal.

After my time as DSG at OPEC, I continued my involvement at its meetings and conferences until my retirement 15 years later.

Besides the technical and political aspects of working for OPEC, there is the human side. Over the years, attending meetings in Vienna, Geneva or Member Country capitals all over the world is in itself a fantastic experience. Alongside work, you visit places and see things you had not dreamt off before getting involved with OPEC. Beyond that, the diversity of people you meet and friends you make is most rewarding.

Within the Secretariat, you deal with professionals dedicated to delivering excellence. You seldom feel frustrated because of a lack of coordination or cooperation. Special merit goes to the support staff, who are essentially the backbone of OPEC’s continuity, as seconded officers from Member Countries only serve for limited periods. In summary, life at the Secretariat was what you made of it; personally, working with and for OPEC was sincerely enjoyable. Wishing OPEC many great years ahead.



HE Abdalla Salem El-Badri
Former OPEC Secretary General
Libya

OPEC has come a long way since its humble beginnings in Baghdad 60 years ago. Founded against a backdrop of an oil industry dominated by the leading international oil companies of the day, the Organization is now an established part of international energy community.

It is a history that has seen its fair share of ups and downs, but through the dedication, perseverance and flexibility of its Member Countries it has prospered and it has seen success in meeting its collective objectives, which are effectively the same simple ones agreed at OPEC’s very first meeting in September 1960.

On an occasion such as this, the biggest gratitude should be reserved for all those people who have contributed to OPEC’s history: the Founding Fathers who set it up and pointed it in the right direction; the Ministers, Secretaries General, Governors, National Representatives and other top officials who have continued to chart a sustainable path for the Organization over the years, and last but by no means least, the staff of the Secretariat, whose tireless efforts, enthusiasm and support across a wide range of disciplines over six decades have provided a sound base from which OPEC has been able to achieve its aims and aspirations.

I can personally attest to how important the Secretariat staff are to the Organization, having served at the OPEC Secretariat in Vienna as Secretary General for almost ten years. It was a challenging time, for both OPEC, and the oil industry, in general. Back when my tenure began in 2007, no-one could have predicted the global financial crisis and the subsequent economic downturn; the huge price swings of 2008 and the impacts of financial speculation on the oil price; or the geopolitical happenings that occurred in parts of North Africa and the Middle East. It was also a period when the OPEC Secretariat moved location to its current building on Helferstorferstrasse, a time when we continually looked to advance and improve our research and analysis and further evolve the Organization’s dialogues to ensure OPEC’s voice and opinions were heard across the world.

I am personally extremely proud to have played a small part in this great Organization’s history, but it was only with the loyal support of my colleagues around me that we are able to help guide us through the often choppy waters. In looking ahead, I am confident that OPEC will continue to go from strength-to-strength in the years ahead. The world needs more energy – with many billions still lacking access to modern energy services – and this needs to be delivered in an ever more sustainable way. I am sure the Organization will continue to rise to both the challenges and opportunities it faces.

OPEC at 60 years would no doubt be a surprise to many who reported on the Organization’s first small steps into the world back in 1960. But I have no doubt, we will see OPEC at 70 and many decades beyond.



Dr Abdulhamid Alkhalifa
Director-General of the OPEC Fund for International Development
Kingdom of Saudi Arabia

The OPEC Fund for International Development (the OPEC Fund) was born of OPEC. Established in 1976 by OPEC founder Member Countries as a multilateral development finance institution, its original goal was to promote cooperation between Member Countries and other developing countries with the goal of overcoming underdevelopment.

Today, our 12 Member Countries are: Algeria, Ecuador, Gabon, Indonesia, the Islamic Republic of IR Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela. Our resources are comprised of voluntary contributions made by our Member Countries and accumulated reserves derived from our decades of operation.

In the 44 years since, the OPEC Fund has evolved a great deal. In line with our original mandate, we provide affordable finance to countries and regions that often find funds difficult to secure. This helps to solve development challenges in a market-supportive manner, while promoting cooperation with, and among, under-served countries. Our efforts strengthen infrastructure and human capacity across inter-connected fields such as energy, transportation, agriculture, water and sanitation, health, and education. We support the 2030 Agenda and sustainable development — especially in the countries and regions where funding is needed most. Ultimately, we enable people and communities who may otherwise be left behind to take control of their lives and reach their potential.

As we continuously strive to build on our founding principle of south-south solidarity — particularly with low-income countries — we have recently set ourselves the goal of maximizing development impact in everything we do, in an increasingly complex and challenging development landscape. This means being more responsive to our partners’ needs, crafting innovative solutions to new challenges and, when needed, collaborating with partner institutions as we look to amplify our outcomes. We pride ourselves on the speed and agility with which we provide financial solutions, as well as on our determination to get the job done whatever the circumstances.

To date, the OPEC Fund has approved more than $25 billion in support of development operations in 134 countries. More than $1.8bn of this was approved in 2019 for essential industry sectors across Africa, Asia and Latin America and the Caribbean. Our story for 2019 is overwhelmingly positive — both in terms of the results of our outward-facing development operations and the implementation of our new strategy.

We recognize that in recent months the world has changed a great deal. In March, the OPEC Fund announced a range of measures to support international efforts to combat the COVID-19 outbreak. We are providing a financial package amounting to $200 million in long-term public sector loans, private sector and trade finance facility windows and grants. Be we stand ready to adapt our response as the situation develops. We will deploy resources bilaterally to impacted countries and regions, and coordinate closely with the bilateral and multilateral agencies of our Member Countries, such as the Arab Coordination Group, as well as with the World Bank Group, regional development banks and specialized agencies of the United Nations.

Over the course of our 40 plus year history, the OPEC Fund has overcome many challenges, becoming stronger and more innovative as time has progressed. We are now more agile than ever before, and able to move quickly in response to new, unforeseen threats and opportunities.



Saadallah Al Fathi
Former Advisor to the Minister of Oil
Former President of the Refineries and Gas Industry Administration
Former Head of the Energy Studies Department at the OPEC Secretariat
Iraq

When OPEC was founded in Baghdad in September 1960, I was just entering Manchester University to study engineering on scholarship from the Ministry of Oil of Iraq. I cannot claim that I understood the significance of the event at the time, but I also didn’t know that almost all of my career would be associated with the oil industry, and OPEC in particular.

After a long and rewarding career in the Ministry of Oil, I joined the OPEC Secretariat as Head of the Energy Studies Department from May 1986 right up to 1994. Needless to say, those years were some of the most difficult in the history of the Organization. Oil prices remained low, and relations among Member Countries were fractious. Unity was often difficult to be found. Conferences became long and arduous and even meetings at the technical level were difficult and long, often lasting until the small hours of the morning.

However, these difficulties reflected on the Secretariat staff in a positive way. Because of the demands of the Conference, the Board of Governors and the Economic Commission Board, as well as the emerging issues within the environmental debate and relations with non-OPEC producers, many studies were conducted and appropriate reports were produced. The research models were updated and tuned into new market conditions. The long-term energy model, the flagship of the Research Division, was brought up to the level of equally available models from other research bodies and was published internally for the first time in those years. It continues to this day to be sought-after by analysts every year, especially after it was made public. The Monthly Oil Market Report in its current accomplished format was modestly first issued in April 1993.

Throughout this process, the role played by Secretariat support staff was gradually enhanced, and it is heartening to see that their role is now complementary and equally important to that of the officer staff.

The Organization is esteemed by the peoples of Member Countries as the only developing countries’ commodity organization that has stood the test of time. Even during difficult times in the oil market, when OPEC decisions may have been criticized by many, the greater majority of these peoples held to OPEC as the only stabilizing element in an often volatile market. Equally so, consumers and international oil companies gradually came to respect and understand OPEC’s positions.

It has become increasingly clear that more producers have to share the responsibility with OPEC to stabilize the market, therefore the OPEC+ cooperation was established. Now, perhaps, other producers in some consuming countries may even chip in.

Having returned to the Ministry of Oil in 1994, I participated in some OPEC conferences over the years and was honoured to deliver the main paper at the Ministry of Oil OPEC’s 40th anniversary celebrations in 2000.

In September 2010, I was invited to a conference in Ankara, Turkey, to deliver a presentation under the title ‘50 Years of OPEC’. Therefore, now that OPEC is celebrating its 60th anniversary, I thank the OPEC Bulletin for inviting me to write this column. I wish the Organization and its Secretariat success and many happy returns.



Dr Manouchehr Takin
Senior Officer, Energy Studies Department at the OPEC Secretariat
IR Iran

Contemplating the 60-year life of OPEC made me reminisce about my own tenure at the OPEC Secretariat. I will share three personal reflections that provide some understanding of OPEC thinking and policy development in the 1980s.

One is my own shock when I began to study oil market data at OPEC. Another is the seriousness of research work and the debates among OPEC experts studying the data. The third is watching the announcement in September 1985 that Arab Light would be priced on the basis of product prices in the Rotterdam market.

My own shock: In Tehran in 1981, while preparing myself to go to Vienna, I learned that world oil resources were finite and were depleting rapidly due to strong global consumption, thus the world’s dependence on oil from the Middle East and OPEC would inevitably increase.

Later, while working at the OPEC Secretariat, I was surprised and even sometimes depressed to observe growing oil production outside of OPEC and slow growth and even a decline in world oil demand in the first half of the 1980s. With public emotions and rhetorical headlines during Iran’s 1979 Islamic Revolution still fresh in my mind, I sometimes thought those oil market developments were the result of a global conspiracy against developing countries, especially those rich in natural resources!

However, continuing my work at OPEC, I began to comprehend the reality of market forces, the response to the quadrupling of the oil price in 1974 (the first oil shock) and its trebling in 1979/80 (the second oil shock), the impact of public policies initiated and openly announced by consuming countries beginning in 1974, anti-inflation policies and global recession, the role of technology in oil exploration/production and consumption, and many other factors.

Serious debates: Those oil market issues were under scrutiny by OPEC experts and higher-level policymakers. What impressed me most was the seriousness of the discussions and debates among Member Country representatives and experts who met regularly in Vienna for the OPEC Economic Commission Board (ECB). Research reports and analyses by the Secretariat and sometimes by Member Countries were presented, followed by intensive questions and answers and discussions. I expected the ECB participants to have different viewpoints on the oil market, but I was surprised at their very serious and vehement arguments.

Occasionally, the Board went back and re-examined the detailed data used in the reports. Yet disagreements remained. The meetings often lasted several days, extending into late nights and weekends. The ECB had to analyse all the issues and prepare a report for submission to OPEC Ministers. However, the differences of opinion and the tough debates made it extremely difficult to reach a consensus and prepare a joint report.

Chairing the ECB meetings was most challenging and frustrating, to say the least. On one occasion, the tough debate again extended past midnight on the last day to submit the ECB report. The atmosphere of the meeting was tense and no compromise had been reached. Ultimately, the chair became very upset and left the room in protest. Senior ECB participants then went and apologized and the meeting was reconvened.

For my third reflection, one should remember that part of OPEC policy response to market developments had been to allocate quotas to Member Countries, reducing total OPEC production step by step from about 30 million barrels/day in 1980 to less than 15m b/d in the summer of 1985. Saudi Arabia had been acting as swing producer. In his speech to the Oxford Energy Seminar in September 1985, Sheikh Ahmed Zaki Yamani stated that Saudi Arabia’s production had been reduced from 10m b/d to 2m b/d and that the Kingdom had decided to end this trend. For me this was a surprise.

However, a bigger surprise came when the Minister continued saying that Saudi Arabia will sell its oil based on netback pricing formulae. The sales price would be based on the market price of petroleum products and allow for refining and transportation costs, as well as the purchaser’s own profits. In this way, the purchaser would bear no risk and would be encouraged to buy more, thus increasing Saudi Arabia’s oil sales. This was effectively a policy of gaining market share irrespective of price and I was hearing it for the first time.

Other OPEC Members soon followed this ‘market share strategy’. In 1986, the price of oil collapsed — from about $27/b to less than $10/b (the third oil shock). It caused a serious global crisis, a deep recession in world oil provinces , drastic cuts in oil company investments, the laying off thousands of employees, etc.

This was a landmark event in the history of the Organization — the end of an era during which OPEC had been determining the price of oil. Extensive debates and negotiations within OPEC and with producers outside of OPEC during 1986 resulted in a new OPEC policy that has lasted since 1987. In effect OPEC became a ‘price taker’. It adjusts its production periodically in order to stabilize the market and reduce oil price fluctuations.

More than 30 years have passed. The world and the oil market are now both very different. There have been major changes and crises in the world economy and in politics. Advances in technology have revolutionised all our lives, including the oil industry. OPEC has successfully managed these challenges.

A recent challenge has been the ‘up-and-down’ relationship with non-OPEC producers who in November 2014 refused to cooperate, later agreed and conducted joint oil policies with OPEC, but in March 2020 raised new questions. I believe OPEC will be equally successful in managing this and other challenges in the future.