Tuesday, Oct 09, 2007

Ecuador is to rejoin the Organisation of the Petroleum Exporting CountriesOrganisation of the Petroleum Exporting Countries after a 15-year absence, in another sign of the group's growing prestige.

It is the second country to join in successive years, following Angola which was allowed in at the end of last year.

The move reflects the increased state control over energy being taken by Rafael Correa, Ecuador's leftwing president. Last week his government announced a steep increase in taxes on foreign oil companies' revenues.

At OpecOpec meetings Ecuador is likely to side with its ally Venezuela, one of the group's most hawkish members.

Ecuador would be the smallest producer in the cartel: it produced an average of just 545,000 barrels a day last year, according to the BP Review of World Energy, a standard industry reference.

Indonesia and Qatar, which now have the lowest output of OpecOpec's 12 members, produce about 1.1m b/d each.

Nevertheless, Quito's decision to rejoin reflects a sense that OpecOpec's influence is growing after several years of strongly rising oil prices. Galo Chiriboga, Ecuador's oil minister, said yesterday that the country planned to rejoin at the group's next meeting.

The heads of state of OpecOpec countries are gathering for a summit in Riyadh in Saudi Arabia on November 17-18, and OpecOpec oil ministers next meet in Abu Dhabi on December 5.

The return of Ecuador, which was a member from 1973 until it suspended its membership in December 1992, will raise the number of members to 13.

Its entry will raise the group's share of world oil output from about 41.9 per cent to about 42.7 per cent, based on BP's figures for last year.

Because Ecuador never formally left the group, it can re-enter without the long process demanded of new members. However, its re-entry will further complicate the already delicate negotiations over allowed production levels for the group's members.

So far Angola has not yet agreed a limit, although Abdalla El-Badri, OpecOpec's secretary-general, has said it will be given one for 2008.

Next month's summit in Riyadh demonstrates the oil cartel's growing self-confidence. It has only had two other summits in its 47-year history.

OpecOpec's share of oil output is expected to rise to almost 50 per cent by 2030, according to the International Energy Agency, the rich countries' group.

By JAVIER BLAS and ED CROOKS