Organization of The Petroleum Exporting Countries

ORGANIZATION OF THE PETROLEUM EXPORTING
COUNTRIES
Mission
In accordance with its Statute, the mission of the Organization of the Petroleum Exporting Countries
(OPEC) is to coordinate and unify the petroleum policies of its Member Countries and 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.
Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental
Organization, created at the Baghdad Conference on September 1014, 1960, by Iran, Iraq, Kuwait, Saudi
Arabia and Venezuela. The five Founding Members were later joined by nine other Members: Qatar
(1961); Indonesia (1962) suspended its membership from January 2009-December 2015; Libya (1962);
United Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador (1973) suspended its membership
from December 1992-October 2007; Angola (2007); and Gabon (1975) - terminated its membership in
January 1995 but rejoined in July 2016. OPEC had its headquarters in Geneva, Switzerland, in the first five
years of its existence. This was moved to Vienna, Austria, on September 1, 1965.
OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to
secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of
petroleum to consuming nations; and a fair return on capital to those investing in the industry.
Member Countries
The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq,
with the signing of an agreement in September 1960 by five countries namely Islamic
Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the
Founder Members of the Organization.
These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United
Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and
Angola (2007).
From December 1992 until October 2007, Ecuador suspended its membership. Indonesia
suspended its membership in January 2009, but this was reactivated in January 2016. Gabon
terminated its membership in January 1995. However, it rejoined the Organization in July
2016.
This means that, currently, the Organization has a total of 14 Member Countries.
The OPEC Statute distinguishes between the Founder Members and Full Members - those
countries whose applications for membership have been accepted by the Conference.
The Statute stipulates that any country with a substantial net export of crude petroleum,
which has fundamentally similar interests to those of Member Countries, may become a Full
Member of the Organization, if accepted by a majority of three-fourths of Full Members,
including the concurring votes of all Founder Members.
The Statute further provides for Associate Members which are those countries that do not
qualify for full membership, but are nevertheless admitted under such special conditions as
may be prescribed by the Conference.
Secretariat
The OPEC Secretariat is the executive organ of the Organization of the Petroleum Exporting
Countries (OPEC). Located in Vienna, it also functions as the Headquarters of the Organization, in
accordance with the provisions of the OPEC Statute.
It is responsible for the implementation of all resolutions passed by the Conference and carries out
all decisions made by the Board of Governors. It also conducts research, the findings of which
constitute key inputs in decision-making.
The Secretariat consists of the Secretary General, who is the Organizations Chief Executive Officer,
as well as such staff as may be required for the Organizations operations. It further consists of the
Office of the Secretary General, the Legal Office, the Research Division and the Support Services
Division.
The Research Division comprises Data Services, Petroleum Studies and Energy Studies departments.
The Support Services Division includes Public Relations & Information, Finance & Human Resources
and Administration & IT Services departments.
The Secretariat was originally established in 1961 in Geneva, Switzerland. In April 1965, the 8th
(Extraordinary) OPEC Conference approved a Host Agreement with the Government of Austria,
effectively moving the Organizations headquarters to the city of Vienna on September 1, 1965.
Taxes on oil
The graph above illustrates the inter-country

variations in the average price of one litre of
oil across G7 countries as well as the OECD
average during 2015. It is important to note
that these price variations are mainly due to
the widely varying levels of taxes
(highlighted in red) imposed by major oil
consuming nations. These can range from
relatively modest levels - like in the USA - to
very high levels in Europe and Asia/Pacific.
For example, in the UK the government in

2015 earned about 67.2% of the price
charged for every litre of pump fuel sold to
consumers. On the other hand, oil
producing countries (including OPEC)
earned about 19.9% of the total pump fuel
price.
Oil reserves
According to current estimates,
more than 80% of the world's
proven crude oil reserves are
located in OPEC Member
Countries, with the bulk of OPEC oil
reserves in the Middle East,
amounting to 65% of the OPEC
total.
OPEC Member Countries have

made significant additions to their
oil reserves in recent years, for
example, by adopting best
practices in the industry, realizing
intensive explorations and
enhanced recoveries. As a result,
OPEC's proven oil reserves currently
stand at 1,213.43 billion barrels.
Thank you for attention!!!

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ORGANIZATION OF THE PETROLEUM EXPORTING

The graph above illustrates the inter-country

For example, in the UK the government in

OPEC Member Countries have

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