Secretary-General of Organisation of Petroleum Exporting Countries (OPEC), Mohammad Barkindo, says the organisation is not a cartel and does not fix oil prices. He was responding to a question about a US bill which will open OPEC to antitrust laws, Reuters reported.
Barkindo told Reuters on the sidelines of the Egypt Petroleum Show ‘’OPEC is neither a cartel nor involved in the business of fixing oil prices. It would be a misjudgment to accuse us of such.’’
He spoke as major oil producing nations like Saudi Arabia and the United Arab Emirates have been at the head of the localisation movement in their region, with initiatives like Saudi Aramco’s In-Kingdom Total Value Add (IKTVA) programme pushing companies to base operations locally, and to hire locals, if they want to do business with Aramco.
Considering Aramco’s position as the world’s leading oil and gas producer, it’s a smart move. These programmes encourage the development of the country’s energy infrastructure and supply chain, and provide jobs for its people.
With some overlap between manufacturing and supply activities for oil and gas and other industries, it could also help the gulf countries build up their infrastructure for other industrial processes, too.
Because the industry is based on collaboration, these programs have a wide-reaching impact. A change in one’s policies, or outlook, impacts everyone involved.
That was one key take-away from the recent Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC). Among the 15 halls and hundreds of stands for companies from around the world, almost all of the oil and gas professionals noted the same key market trends—localisation, increased collaboration between industry players and digitalisation.
None of these trends are in place by choice; it has always been a matter of survival and growth. The collaborative nature of the market was put into focus during the industry downturn, when low prices squeezed oil and gas operators, in turn squeezing their suppliers and service providers.
As such, when key players turned to digital technology as a potential solution during hard times, the rest of the industry had to follow suit; if customers want it, suppliers will provide it. Digitalisation has seen a strong push from the oil and gas sector, regionally and globally, as a means to cut costs and improve efficiencies.
Now, localisation is in full swing; Saudi Aramco will invest $400 billion into IKTVA in the next 10 years and plans to train 360,000 people to enter the labour market by 2030.
The world’s largest oil company has signed up more than 400 companies for IKTVA, including Schlumberger and BHGE.
Basing operations in Saudi Arabia might provide international companies a farther reach into the Middle East, and a launch pad for exports to nearby nations.
However, the impact suppliers, producers are putting their growth at the forefront; after decades at the head of the upstream oil and gas sector as the gulf producers are making long-term investments into their own development.
In the mean time, the No Oil Producing and Exporting Cartels Act, commonly known as NOPEC, if passed into law will open OPEC to lawsuits by the US attorney general–either targeting members of the organisation or the group as a whole.
Continuing, Barkindo said, ‘’OPEC is an open, transparent organisation focused on assisting the oil markets to remain in balance on a sustainable basis, which is a fundamental requirement of investors. The international oil industry needs market stability to plan and invest in a predictable manner in order to guarantee future supplies.’’