Organization of the Petroleum Exporting Countries (OPEC, /ˈoʊpɛk/ oh-pek), a permanent, international organization headquartered in Vienna, Austria, was established in Baghdad, Iraq on 10–14 September 1960.[2] Its mandate is to coordinate and unify the petroleum policies of its members and to ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.[3][4][5][6] In 2014 OPEC comprised twelve members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.[2] According to the United States Energy Information Administration (EIA), OPEC crude oil production is an important factor affecting global oil prices. OPEC sets production targets for its member nations and generally, when OPEC production targets are reduced, oil prices increase.[7] Projections of changes in Saudi production result in changes in the price of benchmark crude oils.[7] OPEC was formed in 1960 when the international oil market was largely dominated by multinational companies, the seven sisters. From offices in London, New York and Pittsburgh top executives of oil companies were controlling destinies of Middle East oil producing states.[8]:503 According to Daniel Yergin, the formation of OPEC represented the first collective act of sovereignty on the part of oil exporters and the first turning point in the international economic relations towards the states control over natural resources.[8]:505 In the 1960s OPEC ensured oil companies would be cautious about taking any steps unilaterally and oil companies would not dare cut the posted price again.[8]:505 In December, OPEC and the oil men were named in the top 10 most influential people in the shipping industry according to Lloyds List 2014.[9] Contents [hide] 1 Decision Making 2 Crude oil benchmarks 3 OPEC Reference Basket of Crudes 4 Global market 2014 5 Leadership 6 Publications and research 7 OPEC spare capacity 8 History 8.1 1973 oil embargo 8.2 1975 hostage incident 8.3 The 1980s oil gluts 8.4 Responding to war and low prices 8.5 Production disputes 8.6 OPEC aid 9 Membership 9.1 Current members 9.2 Former members 9.3 Saudi Arabia 9.4 Venezuela 9.5 Nigeria 10 Sustainability 11 See also 12 Citations 13 References 14 External links Decision Making[edit] The OPEC Conference is the supreme authority of the Organization, and consists of delegations normally headed by the Ministers of Oil, Mines and Energy of member Countries. The Conference usually meets twice a year (in March and September) and in extraordinary sessions whenever required. It operates on the principle of unanimity (meaning all members have to agree to a decision) and one Member, one vote. [10] Crude oil benchmarks[edit] Main article: Benchmark (crude oil) Crude oil benchmark is a crude oil that serves as a reference price for buyers and sellers of crude oil. OPEC Reference Basket of Crudes[edit] OPEC Reference Basket of Crudes, a weighted average of prices for petroleum blends — Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela)— is an important benchmark for crude oil prices.[11] North Sea Brent crude oil is the benchmark for half of global oil trade and the leading global price benchmark for Atlantic basin crude oils.[12] It is used to price two thirds of the worlds internationally traded crude oil supplies. The other well-known classifications or benchmarks are West Texas Intermediate (WTI), Dubai Crude, Oman Crude and Urals oil. Global market 2014[edit] Oil trading nations (2014) According to the New York Times the oil-drilling boom in the United States has increased oil production by over 70 percent since 2008 and has reduced the United States oil imports from OPEC by fifty per cent.[13] Types of crude oil Since 2011 the United States absorbed the rapidly increased domestic production of sweet, light, tight oil by reducing like-for-like or similar grade, imported crude oil[14] from Nigerian and other African suppliers.[13] From 2011 to 2013 fifty per cent of oil import reductions impacted light crude (API gravity 35+).[15] Almost 96 per cent of the 1.8 million barrels per day (290,000 m3/d) of its growth comes from light, sweet crude from tight resource formations.[14] As domestic production continues to increase, the U.S. is facing future challenges of absorbing the light, sweet tight oil.[15] In 2011 the United States imported 1.7 million barrels per day (270,000 m3/d). By 2013 crude oil imports were reduced to 1.0 million barrels per day (160,000 m3/d).[15] In January and February of 2014, light crude imports to the United States averaged only 0.6 million barrels per day (95,000 m3/d).[15] In July 2014 the non-OPEC production was predicted at 1.7 million barrels per day (270,000 m3/d) with the United States and Canada producing 1.6 million barrels per day (250,000 m3/d) in 2014.[16] In June 2014 crude oil prices abruptly dropped by about a third as U.S. shale oil production increased and China and Europes demand for oil decreased. Just before the United States rapidly backed out of the crude oil import market because of booming national production, the spot price of North Sea Brent crude oil peaked on 17 June 2014 at more than US$115 per barrel.[12] Nigerian oil exports to the U.S.2006 Nigeria is the largest producer of sweet oil in OPEC. By July 2014, as the US stopped importing light sweet crude, more crude oil became available to refineries in China, India, Japan and South Korea. They collectively purchased 42% more Nigerian crude in 2014 compared with 2013. Starting in June 2014 Saudi Aramco—Saudi Arabias national oil and gas company and the worlds largest oil company in terms of production—discounted the price of its crude to Asian refineries[17] to compete with oil from Nigerian and other African suppliers.[13] In their press release 27 November 2014 at the OPEC Conference in Vienna, it was announced that the OECD-Americas was the main non-OPEC oil supply contributor to an anticipated supply growth of 1.4 million barrels per day (220,000 m3/d) to average 57.3 million barrels per day (9,110,000 m3/d) in 2015. From 2011 until mid-June 2014 the annual average price of oil was about US$110 per barrel. Since June 2014 however, the price of oil slid to $US80. OPEC argued that this drop in the price of oil was not exclusively attributed to oil market fundamentals. While oil market fundamentals, ample supply, moderate demand, a stronger US dollar and uncertainties about global economic growth contributed to the drop in price, speculative activity in the oil market has also been an important factor.[18] In spite of global oversupply, on 27 November 2014 in Vienna, Saudi Oil Minister Ali al-Naimi, blocked the appeals from the poorer OPEC member states, such as Venezuela, Iran and Algeria, for production cuts. Benchmark crude, Brent oil plunged to US$71.25, a four-year low. Al-Naimi argued that the market would be left to correct itself. OPEC had a long-standing policy of defending prices. According to some analysts, OPEC will let price of Brent oil drop to US$60 to slow down US shale oil production.[19] In spite of a troubled economy in member countries, al-Naimi repeated his statement on Saudi inaction.[20] By November 2014 with production at 30.56 million barrels per day (4,859,000 m3/d) OPEC entered its sixth month of exceeding their collective target production.[12] By 11 December 2014 the price of OPEC Reference Basket of Crudes had dropped to US$60.50[11] and by 13 December the price of Brent ICE dropped to US$61.85.[21][12] Leadership[edit] Abdallah Salem el-Badri has been the Secretary General of OPEC since 2007. He is a citizen of Libya and resides in Austria. Abdalla Salem El-Badri, Secretary General, OPEC Publications and research[edit] Since 2007, OPEC publishes the World Oil Outlook (WOO) annually, in which it presents a comprehensive analysis of the global oil industry including OPEC projections for the medium-term and long-term for oil demand and supply.[22] In its 2014 WOO, OPEC projected that the price of oil would be US$110/b for the rest of the decade . OPEC spare capacity[edit] The U. S. Energy Information Administration, the statistical arm of the U.S. Department of Energy, defines spare capacity for crude oil market management, as the volume of production that can be brought on within 30 days and sustained for at least 90 days.[7] OPEC spare capacity provides an indicator of the world oil markets ability to respond to potential crises that reduce oil supplies.[7] In November 2014 the International Energy Agency estimated that OPECs effective spare capacity was 3.52 million barrels per day (560,000 m3/d) and that this number would increase to a peak in 2017 of 4.60 million barrels per day (731,000 m3/d). In 2013 it was 3.06 million barrels per day (487,000 m3/d).[23]:13 Saudi Arabia is the largest oil exporter in the world and largest oil producer of the OPEC nations. It has the greatest spare capacity at about 1.5 million barrels per day (240,000 m3/d) to 2 million barrels per day (320,000 m3/d).[7] History[edit] The OPEC headquarters in Vienna In 1949 Venezuela and Iran were the first countries to move towards the establishment of OPEC by approaching Iraq, Kuwait and Saudi Arabia, suggesting that they exchange views and explore avenues for regular and closer communication among petroleum-producing nations.[24] In 1959, the International Oil Companies (IOCs) reduced the posted price for Venezuelan crude by 5¢ and then 25¢ per barrel, and that for Middle Eastern crude by 18¢ per barrel.[24] The First Arab Petroleum Congress convened in Cairo, Egypt, where they established an ‘Oil Consultation Commission’ to which IOCs should present price change plans to authorities of producing countries.[24] In 1959 journalist Wanda Jablonski introduced Abdullah Tariki to Juan Pablo Perez Alfonzo at the Arab Oil Congress in Cairo. They were both infuriated by the cut in posted prices by IOCs or Multinational Oil Companies (MOCs). This meeting resulted in the Maadi Pact or Gentlemens Agreement.[8]:499 In 1960, journalist Wanda Jablonski reported a marked hostility toward the West and a growing outcry against absentee landlordism in the Middle East. In his influential book entitled The Prize: The Epic Quest for Oil, Money, and Power, Daniel Yergin described how the Standard Oil, who controlled 75% of the US oil business, in August 1960 with no direct warning to oil exporters, announced cut of up 7 per cent of the posted prices of Middle Eastern crude oils. Esso and other oil companies unilaterally reduced the posted price for Middle East crudes.[25] Middle Eastern countries already felt resentment towards the West over the absentee landlordism of [8] Multinational Oil Companies (MOCs) who at the time controlled all oil operations within the host countries.[8]:503 In 10–14 September 1960, the Baghdad conference was held at the initiative of the Venezuelan Mines and Hydrocarbons minister Juan Pablo Pérez Alfonso and the Saudi Arabian Energy and Mines minister Abdullah al-Tariki. The governments of Iraq, Iran, Kuwait, Saudi Arabia and Venezuela met in Baghdad to discuss ways to increase the price of the crude oil produced by their respective countries and respond to unilateral actions by the Multinational Oil Companies (MOCs) who at the time controlled all oil operations within the host countries. Together with Arab and non-Arab producers, Saudi Arabia formed the Organization of Petroleum Export Countries (OPEC) to secure the best price available from the major oil corporations.[26] Iraq, Kuwait, Iran, Saudi Arabia and Venezuela were the OPEC founding member nations in 1960. Later it was joined by nine more governments: Libya, United Arab Emirates, Qatar, Indonesia, Algeria, Nigeria, Ecuador, Angola, and Gabon. OPEC was headquartered in Geneva, Switzerland before moving to Vienna, Austria, on September 1, 1965.[27] Oil exports imports difference OPEC was founded to unify and coordinate members petroleum policies. Between 1960 and 1975, the organization expanded to include Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), and Nigeria (1971). Ecuador and Gabon were early members of OPEC, but Ecuador withdrew on 31 December 1992[28] because it was unwilling or unable to pay a $2 million membership fee and felt that it needed to produce more oil than it was allowed to under the OPEC quota,[29] although it rejoined in October 2007. Similar concerns prompted Gabon to suspend membership in January 1995.[30] Angola joined on the first day of 2007. Norway and Russia have attended OPEC meetings as observers. Indicating that OPEC is not averse to further expansion, Mohammed Barkindo, OPECs Secretary General, asked Sudan to join.[31] Iraq remains a member of OPEC, but Iraqi production has not been a part of any OPEC quota agreements since March 1998. In the 1970s, OPEC began to gain influence and steeply raised oil prices during the 1973 oil crisis in response to US aid to Israel during the Yom Kippur War.[32] It lasted until March 1974.[33] OPEC added to its goals the selling of oil for socio-economic growth of the poorer member nations, and membership grew to 13 by 1975.[27] A few member countries became centrally planned economies.[27] In a 1979 U.S. District Court decision held that OPEC’s pricing decisions have sovereign immunity as governmental acts of state, as opposed to commercial acts, and are therefore beyond the legal reach of U.S. courts competition law and are protected by the Foreign Sovereign Immunities Act of 1976.[34][35] In the 1980s, the price of oil was allowed to rise before the adverse effects of higher prices caused demand and price to fall. The OPEC nations, which depended on revenue from oil sales, experienced severe economic hardship from the lower demand for oil and consequently cut production in order to boost the price of oil. During this time, environmental issues began to emerge on the international energy agenda.[27] Lower demand for oil saw the price of oil fall back to 1986 levels by 1998–99. In the 2000s, a combination of factors pushed up oil prices even as supply remained high. Prices rose to then record-high levels in mid-2008 before falling in response to the 2007 financial crisis. OPECs summits in Caracas and Riyadh in 2000 and 2007 had guiding themes of stable energy markets, sustainable oil production, and environmental sustainability.[27] In 2003 the International Energy Agency (IEA) and OPEC held their first joint workshop on energy issues and they continued to meet since then to better understand trends, analysis and viewpoints and advance market transparency and predictability.[36]:7 By 2011 OPEC called for more efforts by governments and regulatory bodies to curb excessive speculation in oil futures markets. OPEC claimed this increased volatility in oil prices, disconnected price from market fundamentals. In 2011 Nymex oil future trades reached record highs. By mid-March the Nymex WTI exceeded 1.5 million futures contracts, 18 times higher than the volume of daily traded physical crude.[37] While there have been some allegations that OPEC acted as a cartel when it adopted output rationing in order to maintain price in 1996, for example,[38] Jeff Colgan argued in 2013 that, since 1982, countries cheated on their quotas 96% of the time, largely neutralizing the ability of OPEC to collectively influence prices.[39] In 2011 the U.S. Energy Information Administration estimated that OPEC would break above the US$1 trillion mark earnings for the first time at US$1.034 trillion. In 2008 OPEC earned US$965 billion.[40] 1973 oil embargo[edit] Main article: 1973 oil crisis In October 1973, OPEC declared an oil embargo in response to the United States and Western Europes support of Israel in the Yom Kippur War of 1973. The result was a rise in oil prices from $3 per barrel to $12 starting on 17 October 1973, and ending on 18 March 1974 and the commencement of gas rationing. Other factors in the rise in gasoline prices included a market and consumer panic reaction, the peak of oil production in the United States around 1970 and the devaluation of the U.S. dollar.[41] U.S. gas stations put a limit on the amount of gasoline that could be dispensed, closed on Sundays, and limited the days gasoline could be purchased based on license plates. Even after the embargo concluded, prices continued to rise.[42] The Oil Embargo of 1973 had a lasting effect on the United States. The Federal government got involved first with President Richard Nixon recommending citizens reduce their speed for the sake of conservation, and later Congress issuing a 55 mph limit at the end of 1973. Daylight saving time was extended year round to reduce electrical use in the American home. Smaller, more fuel efficient cars were manufactured. Nixon also formed the Energy Department as a cabinet office.[citation needed] People were asked to decrease their thermostats to 65 degrees and factories changed their main energy supply to coal. One of the most lasting effects of the 1973 oil embargo was a global economic recession. Unemployment rose to the highest percentage on record while inflation also spiked. Consumer interest in large gas guzzling vehicles fell and production dropped. Although the embargo only lasted a year, during that time oil prices had quadrupled and OPEC nations discovered that their oil could be used as both a political and economic weapon against other nations.[43][44] 1975 hostage incident[edit] Main article: OPEC siege This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2011) On 21 December 1975, Ahmed Zaki Yamani and the other oil ministers of the members of OPEC were taken hostage in Vienna, Austria, where the ministers were attending a meeting at the OPEC headquarters. The hostage attack was orchestrated by a six-person team led by Venezuelan terrorist Carlos the Jackal (which included Gabriele Kröcher-Tiedemann and Hans-Joachim Klein). The self-named Arm of the Arab Revolution group called for the liberation of Palestine. Carlos planned to take over the conference by force and kidnap all eleven oil ministers in attendance and hold them for ransom, with the exception of Ahmed Zaki Yamani and Irans Jamshid Amuzegar, who were to be executed. The terrorists searched for Ahmed Zaki Yamani and then divided the sixty-three hostages into groups. Delegates of friendly countries were moved toward the door, neutrals were placed in the centre of the room and the enemies were placed along the back wall, next to a stack of explosives. This last group included those from Saudi Arabia, Iran, Qatar and the UAE. Carlos arranged bus and plane travel for the team and 42 hostages, with stops in Algiers and Tripoli, with the plan to eventually fly to Aden then Baghdad, where Yamani and Amuzegar would be killed. All 30 non-Arab hostages were released in Algiers, excluding Amuzegar. Additional hostages were released at another stop. With only 10 hostages remaining, Carlos held a phone conversation with Algerian President Houari Boumédienne who informed Carlos that the oil ministers deaths would result in an attack on the plane. Boumédienne must also have offered Carlos asylum at this time and possibly financial compensation for failing to complete his assignment. Carlos expressed his regret at not being able to murder Yamani and Amuzegar, then he and his comrades left the plane. Hostages and Carlos and his team walked away from the situation. Some time after the attack it was revealed by Carlos accomplices that the operation was commanded by Wadi Haddad, a Palestinian terrorist and founder of the Popular Front for the Liberation of Palestine. It was also claimed that the idea and funding came from an Arab president, widely thought to be Muammar al-Gaddafi. In the years following the OPEC raid, Bassam Abu Sharif and Klein claimed that Carlos had received a large sum of money in exchange for the safe release of the Arab hostages and had kept it for his personal use. There is still some uncertainty regarding the amount that changed hands but it is believed to be between US$20 million and US$50 million. The source of the money is also uncertain, but, according to Klein, it was from an Arab president. Carlos later told his lawyers that the money was paid by the Saudis on behalf of the Iranians and was, diverted en route and lost by the Revolution.[45] The 1980s oil gluts[edit] Main article: 1980s oil glut OPEC net oil export revenues for 1971 - 2007.[46] In response to the high oil prices of the 1970s, industrial nations took steps to reduce dependence on oil. Utilities switched to using coal, natural gas, or nuclear power while national governments initiated multi-billion dollar research programs to develop alternatives to oil. Demand for oil dropped by five million barrels a day while oil production outside of OPEC rose by fourteen million barrels daily by 1986. During this time, the percentage of oil produced by OPEC fell from 50% to 29%. The result was a six-year price decline that culminated with a 46 percent price drop in 1986. In order to combat falling revenues, Saudi Arabia pushed for production quotas to limit production and boost prices. When other OPEC nations failed to comply, Saudi Arabia slashed production from 10 million barrels daily in 1980 to just one-quarter of that level in 1985. When this proved ineffective, Saudi Arabia reversed course and flooded the market with cheap oil, causing prices to fall to under ten dollars a barrel. The result was that high price production zones in areas such as the North Sea became too expensive. Countries in OPEC that had previously failed to comply to quotas began to limit production in order to shore up prices.[47] Responding to war and low prices[edit] Main articles: 1990 oil price shock and 2000s energy crisis Leading up to the 1990–91 Gulf War, The President of Iraq Saddam Hussein recommended that OPEC should push world oil prices up, helping all OPEC members financially. But the division of OPEC countries occasioned by the Iraq-Iran War and the Iraqi invasion of Kuwait marked a low point in the cohesion of OPEC. Once supply disruption fears that accompanied these conflicts dissipated, oil prices began to slide dramatically. After oil prices slumped at around $15 a barrel in the late 1990s, joint diplomacy achieved a slowing down of oil production beginning in 1998. In 2000, Venezuela President Hugo Chávez hosted the first summit of OPEC in 25 years in Caracas. The next year, however, the September 11, 2001 attacks against the United States, and the following invasion of Afghanistan, and 2003 invasion of Iraq and subsequent occupation prompted a sharp rise in oil prices to levels far higher than those targeted by OPEC themselves during the previous period. On 19 November 2007, global oil prices reacted violently as OPEC members spoke openly about potentially converting their cash reserves to the euro and away from the US dollar.[48] In May 2008, Indonesia announced that it would leave OPEC when its membership expired at the end of that year, having become a net importer of oil and being unable to meet its production quota.[49] A statement released by OPEC on 10 September 2008 confirmed Indonesias withdrawal, noting that it regretfully accepted the wish of Indonesia to suspend its full Membership in the Organization and recorded its hope that the Country would be in a position to rejoin the Organization in the not too distant future.[50] Indonesia is still exporting light, sweet crude oil and importing heavier, more sour crude oil to take advantage of price differentials (import is greater than export). Production disputes[edit] The economic needs of the OPEC member states often affects the internal politics behind OPEC production quotas. Various members have pushed for reductions in production quotas to increase the price of oil and thus their own revenues.[51] These demands conflict with Saudi Arabias stated long-term strategy of being a partner with the worlds economic powers to ensure a steady flow of oil that would support economic expansion.[52] Part of the basis for this policy is the Saudi concern that expensive oil or supply uncertainty will drive developed nations to conserve and develop alternative fuels. To this point, former Saudi Oil Minister Sheikh Yamani famously said in 1973: The stone age didnt end because we ran out of stones.[53] One such production dispute occurred on 10 September 2008, when the Saudis reportedly walked out of OPEC negotiating session where the organization voted to reduce production. Although Saudi Arabian OPEC delegates officially endorsed the new quotas, they stated anonymously that they would not observe them. The New York Times quoted one such anonymous OPEC delegate as saying “Saudi Arabia will meet the market’s demand. We will see what the market requires and we will not leave a customer without oil. The policy has not changed.”[54] OPEC aid[edit] OPEC aid dates from well before the 1973/74 oil price explosion. Kuwait has operated a program since 1961 (through the Kuwait Fund for Arab Economic Development). The OPEC Special Fund was conceived [...] in Algiers, Algeria, in March 1975, and formally founded early the following year. A Solemn Declaration reaffirmed the natural solidarity which unites OPEC countries with other developing countries in their struggle to overcome underdevelopment, and called for measures to strengthen cooperation between these countries, operating under a reasoning that the Funds resources are additional to those already made available by OPEC states through a number of bilateral and multilateral channels. The Fund was later renamed as the OPEC Fund for International Development (OFID).[55][56] The Fund became a fully fledged permanent international development agency in May 1980 and was renamed the OPEC Fund for International Development (OFID), the designation it currently holds. Membership[edit] Current members[edit] OPEC Swissotel, Quito,Ecuador December 2010 OPEC has twelve member countries: six in the Middle East, four in Africa, and two in South America. Country Region Joined OPEC[57] Population (July 2012)[58] Area (km²)[59] Production (bbl/day) Algeria Africa 1969 37,367,226 2,381,740 2,125,000 (16th) Angola Africa 2007 18,056,072 1,246,700 1,948,000 (17th) Ecuador South America (1973) 2007[A 1] 15,223,680 283,560 485,700 (30th) Iran Middle East 1960[A 2] 78,868,711 1,648,000 4,172,000 (4th) Iraq Middle East 1960[A 2] 31,129,225 437,072 3,200,000 (7th) Kuwait Middle East 1960[A 2] 2,646,314 17,820 2,494,000 (10th) Libya Africa 1962 5,613,380 1,759,540 2,210,000 (15th) Nigeria Africa 1971 170,123,740 923,768 2,211,000 (14th) Qatar Middle East 1961 1,951,591 11,437 1,213,000 (21st) Saudi Arabia Middle East 1960[A 2] 26,534,504 2,149,690 8,800,000 (2nd) United Arab Emirates Middle East 1967 5,314,317 83,600 2,798,000 (8th) Venezuela South America 1960[A 2] 28,047,938 912,050 2,472,000 (11th) Total 369,368,429 11,854,977 km² 33,327,700 bbl/day Jump up ^ Ecuador initially joined in 1973, left in 1992, and rejoined in 2007. ^ Jump up to: a b c d e One of five founder members that attended the first OPEC conference, in September 1960. Former members[edit] Country Region Joined OPEC Left OPEC Gabon Africa 1975 1994 Indonesia South East Asia 1962 2009 Some commentators consider that the United States was a de facto member during its formal occupation of Iraq due to its leadership of the Coalition Provisional Authority.[60][61] But this is not borne out by the minutes of OPEC meetings, as no US representative attended in an official capacity.[62][63] Indonesia left OPEC in 2009 because it ceased to be a net exporter of oil. It could not fulfill the demand of its own countrys needs, as growth in demand outstripped output. The situation was made worse because of weak legal certainty and corruption that deterred foreign investors from investing in new reserves in Indonesia. In recent times, the government has increased financial incentives for foreign firms to invest in exploration and extraction but has found itself forced to import more supplies from the likes of Iran, Saudi Arabia and Kuwait. Indonesias departure from OPEC will not likely affect the amount of oil it produces or imports.[64] Saudi Arabia[edit] Main article: History of the oil industry in Saudi Arabia Oil reserves in Saudi Arabia are the second largest claimed in the world, estimated to be 267 billion barrels (42×109 m3) (Gbbl hereafter), including 2.5 Gbbl in the Saudi–Kuwaiti neutral zone. These reserves were the largest in the world until Venezuela announced they had increased their proven reserves to 297 Gbbl in January 2011.[65] The Saudi reserves are about one-fifth of the worlds total conventional oil reserves, a large fraction of these reserves comes from a small number of very large oil fields, and past production amounts to 40% of the stated reserves. Office of Saudi Aramco, Saudi Arabias national oil company Saudi Aramco, (formerly Arabian-American Oil Company) is the Saudi Arabian national oil company.[66][67] Valued at about US$10 trillion in 2010 [68][69][70]with total assets at about US$30 trillion, it was the worlds largest company.[71] It has both the worlds largest proven crude oil reserves, at more than 260 billion barrels (4.1×1010 m3),[72] and largest daily oil production.[73] Venezuela[edit] Main article: History of the Venezuelan oil industry In November 2013 Venezuela produced 2.69 million barrels per day (428,000 m3/d); in 2014 the production fell to 2.47 million barrels per day (393,000 m3/d)[12] In 2014 96 per cent of Venezuelas dollar earnings came from its oil exports.[12] Nigeria[edit] Main article: Petroleum industry in Nigeria United States Geological Survey 1996 Nigeria Delta Petroleum Systems Nigeria is the largest exporter of crude oil in Africa and has the largest economy in Africa.[74] Nigerias petroleum is classified mostly as light and sweet, as the oil is largely free of sulphur. Nigeria is the largest producer of sweet oil in OPEC. This sweet oil is similar in composition to petroleum extracted from the North Sea. This crude oil is known as Bonny light. Names of other Nigerian crudes, all of which are named according to export terminal, are Qua Ibo, Escravos blend, Brass river, Forcados, and Pennington Anfan. Sustainability[edit] In 2009 Mikael Höök, argued that despite technological advances that increase the productivity of oil wells, the rate of decline of oil fields would eventually increase as time continues.[75] In 2010 energy policy expert Joyce Dargay accused OPEC, along with several other institutions, of drastically underpredicting future oil demand by 2030 by more than 25%, a difference of 28 million barrels per day (4,500,000 m3/d) or about twice the current amount supplied by Saudi Arabia.[76]
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