OPEC head backs Saudi compensation claims over lost oil revenues

OPEC head backs Saudi co

November 23, 2009 00:20
2 minute read.

Saudi Arabia is gaining support from the Organization for the Petroleum Exporting Countries (OPEC) for its appeals to secure compensation for oil producing countries, as developed countries move away from oil towards greener energy sources. Abdalla Salem el-Badri Secretary-General of OPEC said in an interview with The Times that he would support Saudi's claims for compensation if talks at next month's United Nations Climate Change Conference in the Danish capital, Copenhagen, end with commitments to reduce oil consumption in developed countries. Dr. Mohammed Aly Raouf, Program Manager of Environmental Research at the Gulf Research Center in Dubai, told The Media Line such a claim would set a problematic precedent. "Sooner or later the world will switch to another source of energy and if they say they want to be compensated then the coal producing countries can also say they want to be compensated," Dr. Raouf said. "We are not looking at the interests of individual countries, we are looking at the interest of the whole world to save the planet." At least 193 countries are expected to take part in the conference as signatories to the United Nations Framework Convention on Climate Change, a treaty signed a decade ago, which some viewed as a critical turning point in global climate talks. According to the United Nations Framework Convention on Climate Change, tackling climate change is key to ensuring sustainable development, poverty eradication and safeguarding economic growth. Pressure to secure compensation for loss of oil revenue is mounting due to OPEC's increased dependence on oil revenue, and a growing international support for green energy. Saudi Arabia first proposed a program for compensation in 1992, during the United Nations conference in Rio de Janeiro. Oil in the region is currently being traded at $80 a barrel. Last year prices fell to $47 and numerous development projects across the region were either put on hold or cancelled. Over the last 20 years Gulf States have attempted to diversify their economies away from a dependence on oil income. Dubai in the United Arab Emirates has been most successful with expansion into the financial services industry and real estate. When the global economic crisis hit the region last year, the countries least affected were those most able to fall back on oil revenue. Abu Dhabi, the United Arab Emirates' capital, bailed Dubai's state-owned companies at a cost of $10 billion, raising concerns that despite attempts at diversification, oil underscores the region's economy stability. Abu Dhabi is the world's fourth largest oil producer and is estimated to control 10% of the world's known oil reserves. Saudi Arabia is the world's top oil producer with an estimated daily production of ten million barrels a day.

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