OPEC: Venezuela and the Founding Nations - Research Paper

Introduction

Venezuela was among the founding nations of the Organization of Petroleum Exporting Countries (OPEC), an intergovernmental organization that was permanently formed in a Baghdad conference in 1960. The other countries were Iran, Kuwait, Iraq, and Saudi Arabia. The primary objective of the organization was to coordinate and unify policies related o petroleum and its products among the member countries in a bid to securing prices that are stable and secure for the petroleum producers and a fair return on capital to those investing in the industry. Venezuela was among those countries with the world's largest crude oil reserves. At this time, it had a stable democracy and was among the Latin American countries with the fastest-growing economies. However, despite its fall in the late 20th and early 21st centuries, the country has generally played significant roles in the oil business across the world.

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In the plight of an increase in the prices hence the revenue from oil for the country, it was charged with the role of initiating various financial agreements within the region, particularly with-it neighbors and the national banks of the area. The country went ahead to allocate a GDP of ten percent to the foreign aid sector. However, the value was disbursed at regular intervals instead of a single bunch (Lescaroux & Magnon, 357). During that time, their President with other higher-ranking government officials, took to task to champion and addressing the cause of poverty and underdevelopment in many countries across the world because of the successful years that Venezuela had been having since the discovery of its oil deposits, especially before the Asian countries, resulting in a growing influence of its leaders not only in the region but also in those countries that were beginning to manufacture the oil. The state had far-reaching effects on its conduct of the foreign policy, particularly of its then minister Juan Pablo Alfonzo. He was in charge of the mines and hydrocarbons in the country but significantly contributed to the formation of OPEC in 1960 (Kaufmann et al., 27).

It was Venezuela that was the first to subscribe to the idea of the need for collective action by those states that produced oil. It was in a bid to enhance their bargaining with the large oil corporations more effectively. The above role played by Venezuela saw a reduction in disagreements and indecisions that had been witnessed in the previous times, followed by an unprecedented successful collective hike in prices of oil, which left s strong mark on Venezuela's approach to the global problems.

When the prices for a single barrel of oil went up, the country was charged with the responsibility of advancing more efforts of extracting more fuel for the world in a bid to maximize sales and profits. Out of the benefits that were generated, under president Perez, there was the need for the country to rebuild a more robust economy as opposed to the existing and previous one together with the promotion of the social, welfare, educational, and health programs that had not been there before. The above was to cater for the increasing population of the country. The role was also to ensure that all the above programs, that were important and basic to its people would lead to the healthy growth of the country's economy and sustain the same despite considerations of the future role of the

Venezuela played an active role in trying to end the OAS sanctions against Cuba because the sanctions were ineffective in the achievement of their purpose. The above was achieved together with the presidents of Colombia and Costa Rica, where Venezuela lobbied for a vote that could see the lifting of the sanctions. Because of the above, the President of Venezuela signed a multilateral deal with Cuba, the Soviet Union, and the customers that belonged to Venezuela in Western Europe. In the signed contract, Venezuela would transport the Soviet Union oil, usually to Cuba (Sanders, 469). On the other hand, the Soviet Union would make the oil shipments of Venezuela's oil to western European customers.

Just like the majority of the countries that have oil deposits or engage in oil trade, Venezuela also plays the role of training its people for different tasks in the petroleum industry. Because of the initiative, the country has many well-trained and individuals that have vast experience in the industry. There are many thousands of students that are funded by Venezuela to go to foreign countries each year in a bid to study petroleum technology. The above does not only boost the professionals in the petroleum industry for the country, but the expertise can also be exported to any other oil-producing country that requires the services.

On the discovery of oil in the country in the Maracaibo basin, the country was capable of extracting 100000 barrels of oil in a single day. It showed the availability of massive reserves beneath the country's surface (Dodson & Dorraj, 87). With minimal knowledge and skills concerning the extraction of oil and other processes, the state allowed the entry of different companies from foreign nations to aid in the processes. It was an eye-opener for other countries to exploit their oil resources when the country became the world's second-largest petroleum exporter (Kott, 74). The influence Venezuela had particularly to other countries like the United States and Brazil aided in faster development of the oil sectors in those countries in a bid to have a share of the market and, in return boosting the petroleum industry as a whole.

Lastly, besides the role of supplying professionals and expertise in the oil-producing countries, Venezuela is also charged to transfer technology to the same countries in a bid to improve the growth and development of the industry. Together with other oil companies and countries, Venezuela encourages the use of modern technologies in the manufacturing of oil products. The country has a researcher who carries out its tasks concerning the most appropriate ways of oil production that are less costly and aid in the conservation of the environment. Additionally, the country has been on the frontline in the protection of the situation, particularly in matters concerning air pollution and environmental conservation. It has played the role of trying to formulate and implement policies that are aimed at protecting animals and plants and people from the corruption of the environment.

Conclusion

Venezuela is considered a veteran country in the oil business courtesy of the vast experience it has had over the years of exploiting the mineral. Across the years, the above roles played by the country to the oil business have resulted in an improvement in the same industry and the countries that engage in activity in one way or another. Even though the country has gone through a series of downfalls, it still plays a significant role in the business through the various petroleum organizations where it belongs.

References

Dodson, Michael, and Manouchehr Dorraj. "Populism and foreign policy in Venezuela and Iran." Whitehead J. Dipl. & Int'l Rel. 9 (2008): 71-94.

Kaufmann, Robert K., et al. "Does OPEC matter? An econometric analysis of oil prices." The Energy Journal 25.4 (2004): 16-46.Kott, Adam. "Assessing whether oil dependency in Venezuela contributes to national instability." Journal of Strategic Security 5.3 (2012): 69-86.

Lescaroux, F., & Mignon, V. (2008). On the influence of oil prices on economic activity and other macroeconomic and financial variables. OPEC Energy Review, 32(4), 343-380.

Sanders, Ronald. "Venezuela in the Caribbean: Expanding its sphere of influence." The Round Table 96.391 (2007): 465-476.