How can OPEC agree output policy if it has trouble choosing a secretary general?

Appointing a secretary general to run OPEC’s Vienna headquarters should be easy. It never is. The job is technically an administrative one, but political rivalries between key producers have overshadowed the appointment process for years.

We’re talking primarily about OPEC kingpin Saudi Arabia and Iran, but with Iraq now having overtaken Iran to become the oil cartel’s second biggest producer, Baghdad may well turn more assertive about its right to the post in the future.

The current secretary general is Aballa el-Badri, a former Libyan oil minister and oil industry veteran whose second three-year term will finish at the end of the year.

But if the latest indications are anything to go by, Badri may not need to start thinking about emptying his desk yet.

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Earlier this week, on October 22 and 23, a panel consisting largely of OPEC’s governing board met in Vienna to discuss the four candidates for the secretary general job and their suitability for the post. But while this group was not charged with making a preliminary choice to present to ministers at the December 12 conference, it doesn’t seem to have achieved the kind of progress that will make it easier for ministers to choose Badri’s successor at the December 12 conference in the Austrian capital.

A secretary general must be chosen unanimously.

The four candidates are current Ecuadorean oil minister Wilson Pastor-Morris, former Iranian oil minister Gholamhossein Nozari, former Iraqi oil minister Thamer Ghadban and former Saudi Arabian governor Majid Moneef.

As recently as September 24, Iran’s OPEC governor, Mohammad Ali Khatibi said Iran wanted the job to go to Nozari and would not support candidates from other countries.

On October 23, after the panel meeting in Vienna, students’ news agency ISNA quoted Khatibi saying that it was possible that OPEC would not be able to agree on a new secretary general in December.

Assuming Iran refuses to back the Saudi candidate and that Saudi Arabia refuses to back the Iranian, will either country support the Ecuadorean or Iraqi candidate in an attempt to find a compromise? Before you try to answer this question, cast your mind back a few years and recall that ministers chose Badri only after OPEC had been three years without a secretary general. And that is only one, recent example of how long winded the process of filling the job can be.

Arguably, the secretary general is the public face of OPEC and failure to agree on a secretary general serves to amplify the differences between member countries on other more important issues such as crude production policy.

Those differences were shown in high relief at the June 2011 meeting when a Saudi-led Gulf move to increase output was opposed by other countries and the conference broke up without agreement on production levels.

Six months later, in December, ministers managed to agree on an overall 30 million b/d output ceiling — but without any distribution of quotas — which they extended for a further six months in June this year.

Amid great uncertainty over the global economy in the year ahead, OPEC will be best placed to decide production policy if there is cohesion in the ranks — something which will be greatly compromised if squabbling over the secretary general job spills over into the wider arena.


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Comments

  1. Sander at October 29, 2012 2:34 pm

    Dr Moneef is very qualified for the position even though he had not served as a Minister is his career. Other thing which cannot help Dr Moneef to be elected is the rivalry with Iran. Never an Iranian or a Saudi can be chosen. The position of Secretary General has always gone to a neutral country out of Middle East (Indonesia, Nigeria, Libya, Venezuela). Currently, the right candidate should be Dr Chakib Khelil, former Algerian minister and OPEC president. He is highly respected by experts and media, qualified and I am sure he will serve OPEC. SG should be a candidate of compromise. Therefore, it is unlikely that a Middle Eastern will be elected.

    Best regards
    Sander

     
  2. No name please at October 25, 2012 2:32 am

    First of all, with due respect to all candidates, i may say Mr. Moneef could be the best option if political rivalries were not there. I would have to emphasize that Mr. Moneef due to his position as a talent and experienced person in oil issues deserves to be the best option to be picked up from these four candidates and not necessarily his country, the Saudi.
    I would also have to mention that, what you are properly calling “political rivalries” that makes it hard to select a Secrectary General for OPEC, doesn’t exist just and only between Saudi’s and Iranians. It goes far beyond the narrow line between these two countries. It goes to the interventions of countries either producers and consumers, oil companies, energy institutions and some other international stakeholders in one side, and the political considerations inside the OPEC Member Countries in another side.
    If all these interventions and political considerations were not there, i would think of some very much proper persons for candidacy of Secretary General for OPEC who could bring their talents and expertise to help to manage the oil market in such a way that almost all fundamental oil market problems would be vanished.
    Among these figures i may name HE. Kazempour from Iran who served more than 20 years as the most effective member of OPEC’s Board of Governors while also served more than 30 years as Iranian Ambassador to Industrial countries, deputy minister and minister of different ministries related to international energy scene such as Ministry of Trade, Ministry of Foreign Affairs and Petroleum Ministry.
    He, although is the best, is not the only figure who could make positive changes in global oil scene. You may name Mr. Shahrestani of Iraq and Al-Atiya of Qatar too.

     

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