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Divided OPEC meets for summit

RIYADH - OPEC heads of state converged on Riyadh for a rare summit opening Saturday with the organisation divided over the falling US dollar and attempts to give a political impetus to the oil-exporting cartel.

In a gaffe late Friday, a private meeting of ministers from the 12 members of the cartel was mistakenly broadcast to journalists, revealing a spat between Saudi Arabia and anti-US members Iran and Venezuela about the waning US currency.

Journalists witnessed Iran request that the final declaration to be issued by OPEC leaders at the end of the summit on Sunday express the concern of member states about the falling US currency and its impact on oil revenues.

Reacting to the proposal, which was backed by Venezuela, Saudi Foreign Minister Prince Saud Al Faisal warned against mentioning the US currency.

‘There are media people outside waiting to catch this point and they will add to it (exaggerate) and we may find that the dollar collapses,’ Prince Saud said.

Venezuelan President Hugo Chavez, who arrives later Saturday, has also called on OPEC to take on a stronger ‘political and geopolitical’ role and return to its stance of the 1970s when it tightened the screws on consumer nations.

Saudi Arabia appeared to have prevailed in the debate about the dollar and the issue is not expected to be mentioned, but the incident highlights sharp differences at the heart of the group.

‘It’s the second meeting when OPEC is showing its dissension and there are clear divisions and fissures emerging,’ said Yasser Elguindi, a manager at oil brokerage SIG, referring to discord about output at a meeting in September.

‘It’s a gaffe. Nobody likes to air their dirty laundry in public,’ he said.

The remarkable insight into the inner workings of the Organisation of Petroleum Exporting Countries on Friday, which produces 40 percent of world oil, ended when a furious official emerged to switch off the television.

The fall of the dollar, which has declined by about 15 percent in 12 months, has affected the revenues of OPEC members because most of them price and sell their oil exports in the US currency.

The gathering comes at a time of tension on world oil markets, with the cartel under pressure to increase its output to help calm record crude prices that threatened to breach 100 dollars a barrel for the first time last week.

The two-day summit, only the third in the organisation’s 47-year history, will not lead to an agreement to pump more oil, ministers have said, with the issue to be discussed at a regular meeting in Abu Dhabi on December 5.

Chavez believes that oil should be priced between 80 and 100 dollars a barrel, and that OPEC must find a way to compensate the world’s poorest countries for the high prices.

He is to be joined in the Saudi capital by fellow anti-US leader Mahmoud Ahmadinejad, Iran’s president, who is also expected on Saturday. The two leaders will hold talks together in Teheran on November 19.

The summit will also debate sharp rises in energy investments at a time when the cartel is required to invest heavily to raise output capacity to meet rising global demand.

The environment and development funding is also on the agenda.

New York’s benchmark oil price rose back above 95 dollars on Friday to close at 95.10 dollars per barrel while London’s Brent North Sea crude climbed 1.39 dollars to settle at 91.62 dollars per barrel.