The Organization of Petroleum Exporting Countries
Establishment
The Organization of Petroleum Exporting Countries (OPEC) is a permanent intergovernmental association that was established in Baghdad, Iraq. However, over the years, the OPEC headquarters have changed from Geneva, Switzerland to Vienna in Austria in 1965 and presently they are held at the Secretariat building since 1977.
The first ever meeting of OPEC was held on September 14, 1960 during which rules were laid out for the member countries, as well as, policies of establishment. The members of OPEC are mainly oil producing countries or those which largely engage in exportation of oil and oil products. Since the early years of formulation, OPEC has maintained frequent meetings with key ministers from member countries hence update each other on development, as well as, strategies for the petroleum industry (Wright, 2008).
Membership
During the initial OPEC meeting, there were five oil producing and exporting countries which had sent their representatives in the groundbreaking ceremony. These were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. This trading bloc which was initially effected on January 1961 has covers a geographical area of 11, 854, 977 km2. The currency used in indexing the oil prices is USD-per-barrel and all member countries are expected to transact using this currency rates (Wright, 2008).
Over the next years several other oil producing countries have joined OPEC as follows; Qatar was the first to join the five founders in 1961 followed by Libya and Indonesia in 1962. Consequently, the benefits derived from the organization were spreading and the United Arab Emirates joined OPEC in 1967 closely followed by Algeria which joined the league in 1969. Nigeria joined OPEC in 1971 while Ecuador and Gabon were the last to join the organization in 1973. This resulted into thirteen members by the end of the 1980s although later on several members did quite such as Gabon and Ecuador who withdrew in 1992 and1995 respectively. Withdrawal of Ecuador and Gabon was as a result of membership suspension upon placing requests to be eliminated from the organization. The newest development in withdrawal is Indonesia which withdrew after it became a net importer of oil. However, it expressed concern of likely return when it reverts back to oil exports (Wright, 2008).
Goals in OPEC
One of the key objectives of forming OPEC was to promote close ties between members in activities which are mainly economic, as well as, those related to the petroleum industry. Such activities include ensuring a common market is sought and maintained for the members hence they do not have to struggle to seek customers for their oil products. The other goal was to provide ways of safeguarding the legitimate measures for individual, as well as, organizational interests in the petroleum industry. The interests include ensuring that competition is healthy and balanced for members. Consequently, efforts were being made to ensure that the unity allows flow of oil in the consumer markets is equal and adequate. This way the prices and amounts of oil are regulated by the organization thus unnecessary shortages are avoided. Similarly, there was need to create favorable climates for investing capital, in addition to, expertise from different dimensions into the oil industry hence increase the performance of the members (Wright, 2008).
Reference
Wright, R. T. (2008), Environment Science towards a sustainable future, 10th Ed.Prentice Hall.
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