Speech by OPEC Conference President
Delivered by HE Dr. Mohammed Bin Saleh Al-Sada, Qatar's Minister of Energy and Industry and President of the OPEC Conference, at the OPEC and non-OPEC Ministerial Meeting, 10 December 2016, Vienna, Austria.
Excellencies, Distinguished Delegates, Ladies and Gentlemen,
I would like to begin by welcoming all of you to the OPEC Secretariat for this OPEC and non-OPEC Ministerial Meeting. The recent more structured dialogue between OPEC and non-OPEC producers was initiated following OPEC’s decision taken at the 170th (Extraordinary) Meeting of the OPEC Conference in Algeria on 28th September 2016, referred to as the ‘Algiers Accord’.
We are very pleased to see so many Ministers and Heads of Delegation from non-OPEC producers present as we look to build on the ‘Vienna Agreement’, the result of the ‘Algiers Accord’. We value your contributions, your readiness to be part of this process and your attendance today for such an important meeting. It is a meeting that is vital for all producers, the oil industry, and the global economy as well.
We would like to offer a specific thank you to my co-Chair for this meeting, His Excellency Alexander Novak, Minister of Energy of the Russian Federation. He has been a strong advocate of the consultations that have taken place between OPEC and non-OPEC producers in order to restore the much sought-after balance to oil markets. His dedication and leadership in this process has been acclaimed by all.
The ‘Algiers Accord’ set up a High-level Committee that was tasked with recommending the implementation of new production levels for OPEC Member Countries, as well as developing a framework of high-level consultations between OPEC and non-OPEC oil-producing countries.
From the OPEC and non-OPEC perspective, this set in motion a series of extensive bilateral and multilateral consultations, across countries and continents, and between OPEC and non-OPEC, as well as Heads of State and governments. We have seen commitment to this market rebalancing process from the very highest levels of our sovereigns.
The last time OPEC and non-OPEC producers met here at the OPEC Secretariat was for a technical meeting of the High-level Committee on 29th October 2016; the meeting discussed oil market fundamentals, specifically issues related to market over-supply, demand, the stock overhang and the sharp contraction in industry investments.
It also recommended to strengthen cooperation through regular, structured and sustainable consultations among OPEC and non-OPEC producers.
What the past two months have shown is that there is a growing consensus among producers that the market recovery process has taken far too long, with severe consequences for both producer and consumer countries. It has had a major impact on all our countries, in terms of economic growth, heavy losses in revenue and deep social spending cuts.
Moreover, it has also had adverse impact on consumers. We only have to look at the damaging levels of deflation in some OECD countries, as well as the record low interest rates, sometimes in negative territory in real terms, which is partly attributed to lower oil prices.
It is thus vital we look to return sustainable stability to the market, in order to accelerate the ongoing drawdown of the stock overhang, bring the market rebalancing forward and ensure that the necessary future oil industry investments take place, in a timely fashion.
These challenges were firmly in focus when OPEC Ministers met on 30th November for the 171st Meeting of the OPEC Conference in Vienna. This historic meeting delivered the ‘Vienna Agreement’, with the Conference deciding to adjust OPEC production by around 1.2 million barrels a day, to bring it to 32.5 million barrels a day, effective as of 1st January 2017.
The decision was a collaborative timely action to address the prevailing market realities and prospects. And it was a commitment to the global community to help restore and sustain market stability with positive and broad implications on the world economy, the oil industry and oil producing and exporting nations.
The efforts made by OPEC Member Countries were extremely constructive. They have shown great resolve, flexibility, responsibility, as well as a sense of compromise. The ‘Vienna Agreement’ is OPEC’s first production adjustment since the Oran meeting in Algeria in 2008, at the onset of the global financial crisis.
The ‘Vienna Agreement’ has also been openly shared with the public to reflect its credible, equitable, transparent, measurable and verifiable features.
We hope that today’s meeting will complete the picture from the non-OPEC perspective. We should aspire to announce to the world a responsible and timely joint action to help rebalance the market and see sustainable market stability return. I can only reemphasize the importance of this – for our countries, for the oil industry and for the global economy as a whole.
In addition, we also believe it is vital to institutionalize a framework for cooperation between OPEC and non-OPEC producing countries, to help better adapt and react to future industry cycles.
We all recognise that the oil industry is cyclical by nature, but with regular, structured and sustainable interactions, both at the policy and technical levels, and through working together towards common goals, we can attempt to take the sharp edges off future cycles.
Distinguished Delegates, Ladies and Gentlemen,
I believe everyone here has the sense that right now is one of those historical moments in which we can together positively influence the future; for the benefit of our countries, and for the future stability of the oil industry, and the global economy at large.
HE Dr. Mohammed Bin Saleh Al-Sada, OPEC Conference President delivers his speech at the meeting
(r-l) HE Barkindo, OPEC Secretary General, HE Al-Sada, OPEC Conference President, HE Novak, Russia's Minister of Energy and Mr. Hamel, Chairman of OPEC's Board of Governors
OPEC and non-OPEC Ministerial Meeting at the OPEC Secretariat