OPEC: A LONG TURBULENT JOURNEY
Iwent to my first OPEC meeting in 1972, shortly after joining the oil ministry. It was an interesting experience sitting in the back seat, learning from the people who were creating oil policies. Since then I attended OPEC conferences regularly for 40 years.
The challenge for OPEC then was how to confront the International Oil Companies (IOCs) which controlled the industry and benefited from keeping prices low because it owned the concessions and the refineries. The main focus was how to create a lobby to put pressure on the IOCs to increase prices and how to set up national oil companies.
In 1973 an oil shock followed the embargo by OPEC and Arab producers in response to US support for Israel in the Yom Kippur war. Prices began rising from two to three dollars to over 36 dollars in 1981. That was a turning point for producers who started to control their own assets and the IOCs started to lose control. By 1975 producers started setting up their national oil companies, but could not get rid of the IOCs totally because they needed their technical help. It was a marriage of convenience.
Producers thought the high oil prices would go on forever, so they were shocked when by 1985 the prices started to crash and never exceeded 17 dollars a barrel until 2000.
OPEC started to talk for the first time about cutting supply and I found that there was no trust amongst the members. They would commit to cutting supply, but some never did. We met many times and meetings started getting longer, from three days to more than three weeks.
One OPEC conference in Geneva lasted one month! We had one meeting and the rest was all bilateral talks on how to convince members to respect production quotas and how much to cut from each country. That made the market nervous and prices went down more. We had to break meeting for one week over Christmas because Swiss security told us they would be too busy to provide us with full security.
In the 1990s, non- OPEC producers were beginning to have a bigger market share, so we started talking to them to persuade them to cooperate. I was elected OPEC president several times, and visited some of those countries. I said, “You have to support OPEC.” But they never did. In fact, when we cut production to try and control prices, they increased production. OPEC was always open to them, always wanted to work with them.
OPEC – The Day the Jackal Hijacked the Peace
I almost never missed an OPEC meeting, except for one in 1975. Maybe I was lucky. I had just got married and my wife had a medical problem so I had to take her to London.
That year Carlos hijacked the meeting at OPEC's Vienna headquarters and took ministers and delegates hostage. Initially we had no idea who was behind it, but then we heard about this man called Carlos the Jackal from Venezuela, who had ties with a radical movement.
It was suggested that the late Libyan leader Muammar Gaddafi had hired him. Libya was an OPEC member, but Gaddafi had another agenda. It was suggested that the hijacking was not to ask for a ransom, but to assassinate the ministers of Iran and Saudi Arabia. In the end, after three people were killed, Carlos took a ransom. OPEC changed in some ways after Carlos. Before, meetings did not have much security, ministers came and went without security and they would sit in cafes during breaks. But after 1975, the building became like a police headquarters, more security than delegates! Everybody was concerned and worried about another attack.
Finally, the Saudi Arabian Oil Minister Zaki Yamani said he no longer trusted the security at the headquarters in Vienna and insisted the ministers' meetings be moved
Qatar Minister of Energy HE Abdallah bin Hamad Al Attiyah arrives for a meeting of the Organisation of Petroleum Exporting Countries on October 24, 2008 in Vienna.
AFP PHOTO/DIETER NAGL