|
OPEC gets sharp rebuff from Canada
Gary Park For Petroleum News
Canada’s energy industry is based on free-market principles. The Organization of Petroleum Exporting Countries is a price-fixing cartel.
And never the twain shall meet, the two leading Canadian energy ministers said Oct. 23. They delivered a sharp rebuff to overtures from OPEC President Edmund Daukoru, who made a case for closer cooperation between non-aligned producers and OPEC’s 11 members to maintain the market strength needed to support “high unit cost” production such as the Alberta oil sands.
“Canada could well get to the point where they will have to begin to listen to what OPEC is saying … and maybe, God knows, even a common dialogue with OPEC,” he told reporters in Calgary.
Canada currently produces 2.5 million barrels per day, including 1 million bpd from the oil sands, and is the leading exporter of crude to the United States, putting it among the world’s top 10 producers. Output could grow to 4.5 million bpd over the next decade, moving Canada to No. 4 behind Saudi Arabia, Russia and the United States.
Analysts believe OPEC is anxious to bring more official and unofficial member countries into its fold to take greater control over prices after reeling from a 25 percent decline this year.
Daukoru, who is also Nigeria’s oil minister, said “everybody has a vested interest in price stability that is not excessive, but also allows forward investment.
“This is where producers of whatever persuasion, whether inside OPEC or outside OPEC, have a common interest,” he said.
Daukoru said OPEC already has open discussions with China, the European Union and Russia, noting that Russia regularly attends OPEC meetings as an observer — a role the Alberta government has filled in the past.
In addition to meeting with industry leaders, Daukoru and a delegation from Nigeria visited the Syncrude Canada oil sands operation in northeastern Alberta, although they insisted their trip to the oil sands was for information purposes and not with an eye on investing in the resource.
Analyst: OPEC ‘snooping’ in oil sands Vince Lauerman, a global energy analyst with the Canadian Energy Research Institute, told the Calgary Herald that Daukoru’s oil sands stop is part of OPEC’s “snooping around” to get a better idea what kind of non-OPEC competition the cartel will face over the next several years and decide whether it should be concerned about losing market share.
Daukoru held a private meeting with Alberta Energy Minister Greg Melchin, who told reporters there is merit in sharing information, but whether that ever leads to more formal contacts is “not necessarily our concern.”
A spokesman for Melchin’s department said that even if Alberta were interested in a role in OPEC, the absence of a state-owned production monopoly would prevent the province from ever imposing a quota.
Any kind of formal ties are not in the cards, the spokesman said.
Canada’s Natural Resources Minister Gary Lunn said talking with OPEC is possible, joining the cartel is not.
“Canada will not even consider joining OPEC,” he said. “Our whole energy industry is based on free-market principles and we will not stray from that. If there is merit to having discussions, absolutely.” he said. “Canada is always on the lookout for new markets around the world, but” any that we pursue “will be based on free market principles.”
| 