O.P.E.C. backgrounded

Press, 27 June 1987, Page 19

O.P.E.C. backgrounded

Tonight’s (Saturday’s) episode of the “Oil” documentary at 8.30 on One is mostly shot in the Kingdom of Saudi Arabia, charting .the rise to preeminence of the Kingdom’s remarkable Minister of Petroleum, Sheikh Ahmed Zaki Yamani, and his pivotal role in the producers’ organisation, O.P.E.C.

The O.P.E.C. story is traced from the early 19605, when Perez Alphonso, Petroleum Minister for Venezuela and his opposite number from Saudi Arabia, Abdullah Tariki, shared a vision of a ' producers’ cartel to counterbalance the “Seven Sisters.” That vision became reality with the opening of the cartel’s first office — illegally — in Geneva. Since then its headquarters have moved to Vienna, and O.P.E.C. has become both legal and central in world oil supply and demand. Yamani says history

will see O.P.E.C.’s great days not as the early 19705, but as the early 1990 s — implying that the West has still not learned the lessons of the first oil embargo and price quadrupling that plunged it into recession.

Will the present glut and weak prices be followed, inevitably, by shortages and high prices in the next decade? Will O.P.E.C. resume its previously dominant role? Saudi Arabia, with 30 per cent of the world’s proven reserves, can only become more important in the world’s energy equation, whatever happens. We see the modern Kingdom of Saudi Arabia, where petrol still costs less than water, and where a kind of Utopia is being carved out of the desert, paid for by oil royalties. A confident, pro-West kingdom, but it is not without problems, especially if its royalties are cut back still further

in the present oil glut. It is a Muslim country, but one bitterly opposed to the Muslim fundamentalism coming out of Libya.

O.P.E.C. needs Saudi Arabia more than the kingdom needs the producers’ organisation — and no one dares speculate about what happens if Sheikh Yamani goes.

This episode also examines the role of Colonel Gadaffi, first in forcing the price rises of the early 19705, who later revitalised Libya with higher royalties. Also interviewed is Libya’s shrewd Major Abdul Salam Jalloud, who led negotiations with Occidental’s Armand Hammer.