Venezuelans reluctantly accept "Iraqi" delegate to OPEC meet

["Fred Feldman" <ffeldman@xxxxxxxxxxxxxxxx>]

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Fred Feldman

OPEC's surprise cut had an inmediate effect on the market
Venezuela accepts Iraq's delegates to OPEC "with reservations". OPEC
cuts output
Wednesday, Sep 24, 2003
By: Venezuelanalysis.com

After intense negotiations lasting until the dawn of this Wednesday in
search of a consensus, the Venezuelan delegation to OPEC
accepted -under protest- the participation of a delegate of the Iraqi
provisional administration to the OPEC meeting.

Venezuela's reservations were based on the fact that the Iraqi
government has not been officially recognized by the United Nations,
and that according to OPEC's own Statues, the cartel is made of
representatives from the governments of its member countries.

"It is clear enough the governmental character of the different
delegations that concur in representation of their countries to
ordinary and extraordinary meetings of the organization," says an
official statement by the Venezuelan delegation, citing articles 1 and
3 of OPEC's Statues.

"This is only a position of principles that in no way implies judgment
of values of the respectable Iraqi citizens who have attended this
Conference. For that reason we recommended maintaining the relations
between the Republic of Iraq and OPEC," read the statement.

Mines and Energy Minister Rafael Ramirez said today that Venezuela was
hoping for an international recognition of Iraq's interim government,
before allowing their delegates to participate. Ramirez said the
Venezuela had to compromise on the matter in order to avoid a crisis
inside OPEC.

According to analysts, the increase of oil production in Iraq, months
after the American-led invasion brought it to zero, is now impossible
to ignore, and for OPEC it is better to have Iraq back into the cartel
even without having a legally recognized government.

A non-official translation of a document describing Venezuela's
position on the matter titled "Declaration of the Delegation of
Venezuela to the 127th Ordinary Conference of OPEC September 24th,
2003" can be found at www.venezuelanalysis.com/docs.php?dno=1002

Surprise cut

In a very controversial and surprising move, OPEC delegates decided
this Wednesday to cut the cartel's overall oil production by 900
thousand barrels a day. This leaves OPEC's output at only 24.5 million
barrels per day. The effects have been felt immediately though the
financial and commodity markets, which did not expect a production cut
from OPEC's 127th Ordinary Conference, but rather a discussion on the
status of occupied Iraq as a member.

The coming to power of Hugo Chavez in Venezuela played a key role in
the rebuilding of OPEC, after prices dropped into the single digits at
the end of the 90s. Under Venezuela's leadership, today's OPEC is very
different from that of the past in which virtually all member
countries violated production caps imposed by the cartel.

The discipline of OPEC's member countries by maintaining oil
production within the cartel's assigned quotas, has surprised and
angered consuming countries, as OPEC has managed to keep prices at a
level "that's fair for both producers and consumers".



2003 VenezuelAnalysis.com
Ongoing News, Views and Analysis from Venezuela



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