OPEC to Spend $160 Billion to Increase Capacity

The Organisation of Petroleum Exporting Countries (OPEC) members will invest US$160 billion in oil development projects in the next three years to increase their production capacity by 15% in response to growing demand, the secretary-general of the cartel,Abdalla Salem el Badri, has said.

The announcement by Badri came a day after British Prime Minister Gordon Brown sought to put high oil prices at the top of the agenda for a summit in July of the Group of Eight (G8) most powerful nations.
Mr Brown had said that a lack of investment in future production capacity was the main factor driving prices to record highs, but Mr Badri disputed this.

“Even though we see no shortage of oil in the market, since the middle of 2007 we have seen a major disconnect between oil prices and market fundamentals. A number of factors have contributed to this, but primarily [it is] the massive role that speculators now play in the oil market,” Mr Badri said.

Badri was quoted to have said that OPEC countries would add five million barrels per day (bpd) of extra crude production capacity by 2012.

“Our members have already undertaken a $160 billion investment programme to expand crude production capacity by close to five million bpd by 2012,” he said in emailed responses to The National.

AllAfrica