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Chavez praises OPEC for helping maintain 'fair price' of oil
AFP
CARACAS
Petroleumworld.com 06 01 06Venezuelan President Hugo Chavez thanked representatives of the 11 OPEC member states late Wednesday for having helped obtain "fair prices" for crude oil.
"We are very thankful for the support of the OPEC nations to set our petroleum at fair prices," he said on national television on the eve of an OPEC conference in Caracas that is expected to keep the cartel's oil production at 28 million barrels per day.
Chavez, who believes there is already too much oil in the market and supports higher crude prices, reminded the Organization of the Petroleum Exporting Countries that when he came to power seven years ago "the price of crude was 7.6 dollars per barrel."
He said Venezuela and other oil producing nations at the time were "facing an economic crisis" and that "we were practically giving oil away for free ... as we had been doing for most of the 20th century" until OPEC came into being.
If he had not become president, "by now Venezuela would not be an OPEC member ... it would be producing six million barrels (of crude) a day and the price per barrel would be at five dollars," he said.
Chavez, who on Tuesday called the cost of Venezuelan oil -- approaching 60 dollars a barrel -- "a fair price," said the price of crude in the world market must not fall below 50 dollars a barrel.
OPEC has an official production quota of 28 million barrels per day, its highest level in a quarter century, but is under pressure from the Group of Seven club of rich nations to pump more to keep pace with booming demand.
Venezuela, OPEC's only Latin American member and fifth largest oil producer, had been pushing for the cartel to reduce its output, but that idea has received no support from the Gulf states that dominate the cartel.
OPEC's member countries -- Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela -- supply 40 percent of the world's oil production and half of its exports.
A cut in production by the cartel would drive prices still higher, so earning its member states more petrodollars. But it could also kill economic growth among oil consumers such as the United States.
Chavez late Wednesday took aim at the United States, saying it turned Venezuela "into an oil colony" during the 20th century. Venezuela is now the United States' fourth largest oil provider, sending it roughly half its daily output of about three million barrels.
The Venezuelan leader instead praised presidents Evo Morales of Bolivia and Alfredo Palacios of Ecuador for "their dignified and brave decision to take over control of their crude oil" reserves from foreign oil companies.
In an unusual arrangement, Chavez on Thursday will give another speech at the headquarters of the state-run PDVSA oil company, just before the opening of the OPEC conference.
AFP 01 0648 GMT 06 06
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