OPEC Summit Press Conference Transcript
Ambassador Jorge Valero, President of the Presidential Commission for the Preparation of the II OPEC Summit
Caracas, Venezuela. Tuesday 26, September 2000
Good Morning friends of the Press. We will then begin our discussion with Ambassador Valero in relation to the Agenda of this II OPEC Summit of Sovereigns, Heads of States and Chiefs of Government. You know what the procedures are. Please raise your hands to ask questions and please use the microphone that is located at the center of the corridor.
I am going to give the floor to Ambassador Valero.
Ambassador Valero: As you know very well, we are about to begin our II Summit of Sovereigns, Heads of States and Government of the OPEC Member Countries. Several delegations have arrived and also several Ministers, Vice-Ministers and different authorities of the OPEC Member Countries. I would like to inform you that the official forum will be taken tomorrow at the installations of the Teresa Carreño Theatre which is where the deliberations are going to be held as well as the opening and closing ceremony on the 27th and 28th. Everything is ready so that all journalists and photographers have the possibility of being present to take this historical photograph, the most important photograph that is going to circulate all over the world as of tomorrow. So we will like to invite you to attend this ceremony. The access is going to be restricted; we are going to establish some criteria so that representations of the press and journalists can be present during that event. So, I cordially invite you to visit our office where we have the bubble so that you can do all the registrations that are required. I also invite you to go to the international press center; we are distributing a series of supporting material that could be extremely useful for your press coverage. Finally, I would like you to visit the information center as well as the offices that are next to these installations so that you can obtain the agenda concerning the Heads of States arrivals. The first one to arrive, the airplane is going to land at the International Airport at 2:00 o'clock this afternoon. It is going to be the President of Indonesia; President Wahid and the last to arrive this afternoon will be Crown Prince Abdullah Abdulaziz in representation and with the delegation of Saudi Arabia. Since this delegation is very numerous certain authorities will arrive with the Prince while the Ministers will arrive in private airplanes. Since they have to be present in the opening ceremony of the Triministerial Meeting which is going to begin this evening at 8.00 o'clock at the installations of the Hilton Hotel. This is all we have to inform you. President Chavez will be approximately between 12:30 and 1:00 at the Maiquetia International Airport until concluding the arrivals of the delegations with all the protocol ceremony that is programmed.
We just had a very fruitful protocol meeting and we also reviewed all the international situation of the initiatives that are in circulation regarding the producers and consumers. I am going to visit President Hugo Chavez together with the Minister of oil of Saudi Arabia who is already in Caracas. In this meeting besides President Chavez will be the Minister of Oil and Mines Alí Rodríguez and myself, we were also present in this informal meeting. So, this is all what I wanted to share with you, if you have any concern please do not hesitate in expressing it before beginning, I just want to indicate that we have simultaneous translation so anybody who needs translation earphones are available outside.
Canal OPEP: Good morning. In principle Minister we understand that this meeting will be centered besides other aspects regarding the strengthening of the Organization and is going to be centered in prices. We will see how the industrialized countries are exercising a lot of pressures. Yesterday, we had the announcement of other 30 million barrels of oil coming from the stock piling of the United States and all that the OPEC is trying to do in order to stabilize prices within a range between 22 and 28 Dollars per barrel. Could you tell us how are you going to manage this situation because as you know that both the problem of Venezuela as well as the Secretary General has expressed that it is not the OPEC fault that the prices are so high but it is also due to the fact that of very high taxes that are imposed to the fuels, so how are we going to manage the situation and what is the participation that the independent producing countries are going to have and also I would like to know as well what possibilities exist that in this Summit of the OPEC Russia would announce its intention of becoming a member of this oil organization.
Ambassador Valero: What is occurring internationally in the oil market is illustrating the truth and that is that price fixing has to do with a number of distortions. As soon as the United States announced that they would use their reserves, just the announcement without yet having those 30 million barrels out on the market there was a sharp fail of some 5 Dollars per barrel and this evidences very clearly that what operates on the market are a number of factors which are distorting what would be the real supplying demand. The fact is that price dynamic trends seem to be aiming at a return to the band that has been adopted by OPEC. Already today we have seen that OPEC basket is around 31 dollars per barrel while yesterday it was around 33-34 even 35 dollars, it depends on the brand and the West Texas and this means then that we are achieving is a market regulation and what we really wish is prices to remain in the band and OPEC is not to blame for the fact that those prices went above 28 dollars because all the OPEC members countries have stated very firmly and clearly that we hoped that prices should stabilize and we want those prices to fluctuate between 22 and 28 which is the price band that we wish for.
All of this means that we will have to watch what happens with prices and if they go back to the band we would be seeing the first symptoms of world economy stability, we could also say that if prices remain within that regulation or above it the Ministers at the forthcoming meeting would be making the necessary decisions to contribute to market stability. On the other hand, if there were a trend downward, if prices went below 22 dollars which is the lower end of the band the oil Ministers would then again take the necessary steps to regulate the market. What is important is that an international situation is occurring which is unprecedented. Since the first Summit took place in 1975 there had not been such situation. Special conditions on the international arena within which for the first time industrialized countries, the members of the G7, the International Monetary Fund, the European Union, and the U.S. Government are inviting, are convening to a dialogue; and OPEC welcomes that dialogue. The Heads of States in their bilateral and multilateral dialogues and talks will be setting for the foundations or those conditions that would be established for this dialogue or this exchange of a new nature and that could for the first time in many years offer conditions for a fair and equitable situation. So far the relationship between producers and users has not been equitable at all because the world economy based mainly on the so called "globalization processes" has led to situations which are unprecedented and which instead of shortening the gaps between countries have increased them, have sharpen them. So in addition to a polarization there is a growing inequality internationally. As has been in New York at the last Millenium Meeting where it was obvious that not only has the gap between developed and undeveloped countries not been decreased and that the poles of wealth in the world have rather reached greater differences. According to the figures that we obtained there are over 2.000 million poor in the world. Therefore, the OPEC Member Countries welcome this exchange and the foundations for it will be set for at this Summit.
President Chavez on behalf of his colleagues and in his speech on September 28th after signing of this solemn declaration committing the countries on a programme for the forthcoming years. President Chavez after consultation with all his colleagues will make the necessary announcements because this is a proposal from OPEC because Venezuela would like to contribute to the strengthening and development and will express the concerns, the ideas and the opinions of all the Heads of States. So that we are at the eve of a new period and President Chavez and Venezuela wish to be aligned to these new times.
As to some countries that may be interested in being members of OPEC and among them Russia, we would like to report that so far no formal request has been received from any of the five countries with which a relationship of solidarity has been established. To make this possible, two conditions must be complied with, first a formal request and so far none of the countries has requested it, not even Russia. However, the five countries and I am now speaking about Russia, Oman, Norway, Angola and Mexico, those 5 countries comply with the conditions there said in order to be members of the organization. Any of them were to request entry we are sure that certainly two thirds of the Members would be in favour but this is only a hypothesis, and as I said before it is up to them to formally request it.
Good afternoon, I am from Radio Noticias. We have seen that OPEC has tried not be blamed for the increasing oil prices even though OPEC has established a band policy trying to regulate the market with the assumption that OPEC can really do something, so how can OPEC convince others that they cannot regulate or control the market regarding the prices so how do they believe that they can really do so by increasing production and the campaign is now trying to show that it is the taxing on gas which is the cause of the increases in European countries. And we would also know why the Ministerial Meeting that was planned for this morning has now changed the schedule and will be starting this evening.
Ambassador Valero: We have affirmed very strongly that the OPEC is not the organization that establishes and determines the logic of the oil prices in the market. Its power is limited to its production capacity, we know that only 40 per cent of the world oil production is coming from the OPEC Member Countries, so we have factors that are determining prices that go beyond the scope of the OPEC and we have made reference to this several times. Speculation is one of them we have seen that by the announcement of the United States that was going to put into the market 30 million barrels of oil prices dropped in the market and OPEC in its last meeting approved to include 800.000 additional barrels and after this a price increase was also produced, so we have several other factors that determine prices. I must say that still additional production has not been incorporated to the market as yet this is going to be done on the 1st of October and we see that in spite of all these prices guide and since we do not have any other production volumes that are going to be added to the market we saw that this was a normal trend and now after the announcement of the United States we see dropping prices so you see very clearly how the market has been dominated by the speculators.
The delay of the Triministerial Meeting, there is no doubt that in the initial agenda we thought in the possibility of holding the Triministerial Meeting during the morning ours, however, most of the Ministers and we are talking about 30 Ministers that are going to come to our country, ten Ministers of Foreign Affairs, ten Ministers of Oil an Finance and many of them have expressed the fact that they had to be present to receive their Heads of States during this afternoon ours, they will be arriving in their private planes so the Ministers will be arriving to Caracas when their Heads of State and Sovereigns arrive to the City. Other countries have several planes and others only have one plane and taking all this into consideration the Committee of this Summit considered the situation and reached to the conclusion that was not convenient to begin the Triministerial Meeting without some of the Ministers that were going to arrive with their Heads of State so we decided to hold this Meeting tonight. The opening ceremony is going to be kept instead of celebrating it during the morning this opening celebration if going to be held this evening. And there the President of the Preparatory Commission will come all the delegates, all the Ministers that visit us and after which we will hear the speeches and the opening speech will be given by our Minister of Foreign Affairs, Mr. Jose Vicente Rangel and then our Oil Minister, Mr. Alí Rodríguez and then the speech of our Minister of Finance, Mr. Jose Rojas. The Triministerial Meeting will continue tomorrow morning here at the Caracas Hilton Hotel and we estimate that it is going to conclude more or less tomorrow at noon. All these reasons were considered in order to change our agenda.
Radio Noticias: Please could you tell us how many official bilateral meetings have taken place. I was wondering if you could give some information about this.
Ambassador Valero: Well, the only bilateral meeting that we have held with the Heads of Delegation was the one that we held yesterday at the Miraflores Palace where we had our President of the Republic, Mr. Hugo Chavez Frias and the Officer of the Government of Libya, His Excellency, Mr. Harrashi. This afternoon the bilateral meetings will continue after the delegations arrive. The second bilateral meeting will be between President Bouteflika, who is the President of Algeria and tomorrow throughout the morning here at the installations of the Caracas Hilton Hotel we will then hold the remaining deliberations. So in the one hand we will have the Triministerial Meeting and on the other the Heads of State will be visiting President Chavez at the Presidential Suite which is going to be prepared tonight. President Chavez is going to move to the Caracas Hilton Hotel to receive all the Heads of State, sovereigns and governments of the OPEC Member Countries.
Germany: During the history of OPEC we saw a lot of struggle and a lot of disagreements even war between OPEC Member States. Will you give us a short impression how unique OPEC members are in these days and what are the main questions of disagreement actually during this Summit?
Ambassador Valero: There are no disagreements among OPEC countries at this time and the way to illustrate it is that the declaration that will be signed on the 28th of September and in Vienna we already reached a consensus in the high level technical meetings all of this showing that there is common ground concerning all sort of ideas which have been shared at this time by 11 OPEC countries. Even the atmosphere among countries is of exchange, dialogue, there is no tension no international problem neither in the Middle East of elsewhere. Therefore, there is no reason to believe that in the short or mid term there could be growing tension among OPEC countries on the contrary I have had the occasion to speak to the Foreign Minister of Iraq who arrived to Caracas two days ago and he has expressed that there have been talks in New York between the representative of his government and he on his behalf with the Minister of Foreign Affairs of Iran and it has been foreseen that is Caracas additional talks will take place. Thus we can truly say that Caracas is going to city headquarters of world peace and harmony.
Germany: Do you have any information on the exchange between President Chavez and the representative from Libya last night? Because there was no press conference. What are the first ideas that came forth?
Ambassador Valero: Well, as I said it was the first opportunity that the President had to hear about the expectations Libya has on the Summit. A message by His Excellency, Mohamed Kaddafi was very clear saying that his country is entirely in favour to promote a dialogue between producers and consumers.
Well, thank you very much for attending this meeting and we will be at your disposal as well as tomorrow during the Triministerial Meeting and the Meeting of the Heads of State.