APEC, OPEC to Open Dialogue
Channel to Discuss Energy Issues
Oil producing cartel to raise production capacity by 5 million barrels per day
The Asia-Pacific Economic Cooperation and the Organization of Petroleum Exporting Counties are expected to establish an official dialogue channel between petroleum consumers and producers ¡ª a minister-level meeting or a forum among energy research institutions ¡ª in a bid to solve energy issues. Minister of Commerce, Industry and Energy Lee Hee-beom and visiting OPEC acting Secretary-General Adnan Shihab-Eldin met in Seoul on October 19 and shared the need for forming the "OPEC-APEC Business Dialogue"channel.
During the meeting, MOCIE Minister Lee stressed the need for developing a dialogue channel between OPEC and APEC, where petroleum consumption continues to be on a rise, and Shihab-Eldin affirmatively responded to the suggestion, said Han Jin-hyun, director of Petroleum Industry Department at the MOCIE. The minister said Korea was willing to take leading working-level roles in the initiative, which he said would be submitted later on the same day to the 7th Energy Ministers?Meeting (EMM7) in Gyeongju.
Minister Lee emphasized that OPEC raise crude output to stabilize international crude prices and lessen the effects to the global economy, caused by prolonged oil price hikes. Lee also asked for OPEC? expansion of investments into new crude oil exploration. In return, Shihab-Eldin noted that oil-consuming countries need to expand investments into the refining sector on top of OPEC's raising oil output.
"The initiative, once implemented, will give oil-consuming countries a clearer picture of production capacity, while producers will be better informed of consumption patterns,"MOCIE Minister Lee said.
Lee held a meeting with the press following his talks with Shihab-Eldin said the dialogue would help both sides plan, ensure transparency and raise energy predictability and boost OPEC countries?investments into oil-consuming countries.
The acting OPEC secretary-general told EMM7 that OPEC will raise oil production capacity by 5 million barrels to 38 million barrels per day by 2010. He forecast that crude prices will not drop below the $40 range (Dubai crude oil) for the time being, given oil producing countries'production capacity.
Shihad-Elden said the APEC region accounts for 56 percent of global GDP, whereas oil consumption in the region take up a similar share - 49 million barrels, or 59 percent of global total of 82 million barrels per barrel. He said the current oil price hikes were attributable to a rise in petroleum demand in the Asia-Pacific area, including the United States and Japan and non-OPEC countries'stagnant crude refining capacity and refineries?limit. The OPEC secretary-general said OPEC's spare capacity, estimated at 2 million barrels per day, is sufficient to cope with upcoming winter season and a rise in petroleum consumption for next year, and OPEC will raise crude production capacity from current 32.5 million barrels per day to 38 million barrels by 2010.
Shihad-Eldin said OPEC will take a lead in stabilizing the global crude market in the years to come, in consideration of non-OPEC countries'limited crude oil production capacity. A projection released by OPEC shows that OPEC's oil production would rise from 30.5 million barrels per day or 30.5 percent of global total in 2005 to 57 million barrels or 57 percent of total supply of 113.4 million barrels in 2025.
About 200 people, including energy and mining ministers from 21 APEC member countries and vice ministers, participated in the 7th Energy Ministers'Meeting (EMM7) on October 19 and the 2nd Meeting of Ministers Responsible for Mining (MRM2) on October 20.
The energy ministers wrapped up EMM7 and issued a communiqu - calling for strategic petroleum stockpiling, oil exploration and development, inducing investments into refining sector and pushing alternative energy development projects. In the statement, they agreed to build close relationships between APEC and international organizations, including OPEC, and to establish a forum on gas designed to reduce APEC? dependence on petroleum.
Figures released by MOCIE showed that Korea's own development rate of crude oil and gas stood at 3.8 percent, lower than 9.8 percent for Japan, 35.4 percent for Spain, 58.5 percent for Italy and 89.4 percent for France. Korea secured 702 million barrels of crude oil reserves in its own oil development project stakes, followed by 1,515 million barrels for Japan, 1,882 million barrels for Spain and 4,008 million barrels for Italy. Exxon has the largest own development reserves of 12,856 barrels, trailed by BP (10,081 million barrels), Texaco (8,599 barrels), Shell (7,257 barrels) and Total (7,003 barrels). nw
Minister of Commerce, Industry and Energy Lee Hee-beom speaks during a news conference following the end of the 2nd Meeting of Ministers Responsible for Mining (MRM2) in Gyeongju on October 20.