RIYADH (Reuters) - Ecuador rejoined OPEC’s ranks on Saturday after 15 years, adding to the oil producing group’s clout as record prices boost the political and economic influence of its members.
Ecuador became the 13th member of the producer group, which already supplies over a third of the world’s oil, as President Rafael Correa prepared to attend an OPEC heads of state summit in Riyadh on Saturday.
With output of around 500,000 barrels per day (bpd), Ecuador is the group’s smallest producer.
“Ecuador is now a member,” OPEC Secretary General Abdullah al-Badri told Reuters in Riyadh. “There will be some little formalities in Abu Dhabi.”
OPEC’s next ministerial meeting is in Abu Dhabi, the capital of the United Arab Emirates, on December 5. Ecuador will participate as a full member, the country’s Oil Minister Galo Chiriboga said on Saturday.
“With the presence of our president here at the summit, our membership is symbolically completed,” Chiriboga said.
Correa has made OPEC membership a key plank of oil policy since taking office last year and will join his Latin American ally, Venezuela’s leftist President Hugo Chavez, at the OPEC table.
Correa’s moves to grab a bigger share of windfall oil revenues from international companies in Ecuador has echoed Chavez’s oil nationalisation drive in Venezuela. Ecuador will add to the number of OPEC nations looking for a fatter slice of the price of a barrel of oil.
Correa stunned foreign oil investors when he said last month he might take away all the extra profit foreign oil companies have been raking in as a result of surging prices.
Oil prices have more than quadrupled since 2002 and U.S. crude hit a record of $98.62 a barrel last week, encouraging OPEC and non-OPEC governments to revise the attractive terms they offered to lure investment when prices were much lower.
The spreading trend toward resource nationalism has squeezed international oil companies struggling for access to reserves to guarantee future output.
State-owned oil companies already control three-quarters of the world’s crude, dwarfing the holdings of major oil companies such as Exxon Mobil and Royal Dutch Shell.
For big producers like Venezuela, Iran, and Russia, oil-swelled coffers are fuelling a rise in influence on the global political stage. Chavez has used his nation’s windfall oil cash to export his socialist vision through Latin America.
Moves by Chavez to weaken ties with Washington and bolster relations with anti-U.S. states, like Iran and Cuba, have also stirred political tensions.
Chavez is typically hawkish on the oil price because he needs higher revenues from lower output to fund his social agenda, as Venezuela’s oil output has yet fully to recover from a 2002 strike. It remains to be seen whether Ecuador will join Chavez and his OPEC ally Iran among the group’s price hawks.
Ecuador is OPEC’s second new member this year after Angola joined on January 1. The Latin American country will request an OPEC oil output target of 530,000 bpd. Of OPEC’s 12 members, 10 are subject to the group’s targets.
Ecuador left OPEC in 1992 together with Gabon because of membership fee issues and because they felt they needed to produce more oil than they were permitted under the OPEC quota.
Editing by Chris Johnson