Keynote Address by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the Third GCC Petroleum Media Forum, 19 April 2017, Abu Dhabi, UAE.

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Your Highness, excellencies, distinguished guests, ladies and gentlemen,

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It gives me great pleasure to always return to Abu Dhabi, thriving capital of the United Arab Emirates that has remained in the forefront of new frontiers of technology and innovations. The invitation to speak at the Third Gulf Cooperation Council (GCC) Petroleum Media Forum is my 3rd visit since assuming office in the summer of last year.   First we were invited to ADIPEC, where we launched the 10th edition of our World Oil Outlook (WOO) – the first outside the OPEC Secretariat in Vienna, and the first in our Member Country. Secondly we were invited to the Atlantic Council Global Energy Forum, where together with the IEA, we shared our Oil Outlooks and the challenges we overcame in navigating the road map to the three historic decisions we reached first year.

It is significant that it was Abu Dhabi where it all started for the GCC back in May 1981 when its six Member Countries – OPEC Members Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, along with Oman and Bahrain - had the foresight to sign up to what has become one of the most important and influential economic and trading blocks in the world today. Supported by their vast hydrocarbon resources, these nations under the GCC umbrella have been among the fastest-growing economies worldwide in recent years. Of course, like all other oil-producing nations, they have been affected by the oil market downturn, which began in the summer of 2014 and the effects of which are still lingering with us today.

Despite the current stagnation, which sees the group’s economic growth still holding firm at around 2.3% in 2017, the future is not only bright but assured for the GCC, which will continue to have great influence on present and future world energy supplies. In keeping with this growing international standing, the GCC’s relationship with the region’s media is an extremely important aspect that warrants close scrutiny and serious attention. This Forum is therefore timely and well suited. It is a strong and consolidated initiative that has already made great progress. This is indeed commendable since the significance of the media to us all in the petroleum industry cannot be overstated.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

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Today, I would like to share with you OPEC’s perspectives on two interlinked fronts. First, I would like to update you on the extraordinary developments that have occurred over the past few months since we signed the now historic ‘Declaration of Cooperation’ with non-OPEC producing countries to restore oil market stability. Then I would like to offer my thoughts on the role of the international media in the petroleum sector, especially in the context of our work at OPEC.

Throughout 2016, extensive efforts, backed by a solid determination, were made to assist in correcting the persistent imbalance witnessed in the international oil market since 2014. Our formal and informal meetings and discussions within OPEC, and other major stakeholders, including non-OPEC countries, towards restoring the balance and stability have been to say the least intense and extensive taking us far and wide as we strived for all-inclusiveness in building a consensus and instilling confidence among all the parties involved. These intensive and extensive consultations and meetings from Doha – Vienna – Algiers – Vienna as well as literally most of the capitals of our Member Countries were the most exhaustive in the history of OPEC, and indeed all the previous five oil market cycles. The collective determination of our Ministers was stretched to the limits hence the timely intervention of our sovereigns.

This epic journey we embarked on in 2016 is still very much a work in progress – yet the early results are extremely encouraging. From 1 January this year, OPEC and a group of 11 leading non-OPEC oil producers have begun the implementation of the production adjustments totaling around 1.8 million barrels per day. Our ultimate goal, of course, is to reinstate lasting stability to the market for the benefit of all stakeholders, producers, consumers and the global economy at large.

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The last few years have been a torrid time for all those involved in our industry and we are optimistic that the policy measures we have taken have already placed us on to the path of recovery. We decided on 10th December 2016 that the production adjustments should run for the first six months of 2017. We are monitoring this process very closely through a Joint Technical Committee (JTC) that convenes every month and reports to a five-Member Joint Ministerial Monitoring Committee (JMMC), which meets bimonthly to oversee overall progress. The second meeting of the JMMC took place in Kuwait City on 26 March – and the results were beyond expectations. For the month of February, conformity to the adjustments stood at 94 per cent, which was eight percentage points above the January figure - already, in itself, impressive. And the March data is showing an even better performance again, with a higher conformity, underlying our commitment to our common objective.

I am indeed very confident our collective action will continue to prove effective and bring us the results we are seeking. Of course, all the GCC Members are actively involved in spearheading these efforts and I would like to take this opportunity to sincerely thank His Highness, the UAE President, Sheikh Khalifa Bin Zayed Al-Nahyan, and the other GCC Heads of State and Governments as well as their able Ministers for their exemplary leadership. I would also like to pay a special tribute to His Excellency, the Minister of Energy of the UAE, Suhail Mohamed Al Mazrouei, for his skillful, persuasive and constructive engagements during the intensive negotiations behind closed doors. He displayed a deep knowledge of the technical intricacies of the complex issues involved and always provided a simplified solution in the way forward.

Significantly, OPEC’s historic ‘Declaration of Cooperation’ with non-OPEC producers is showing to the international community what can be achieved when OPEC finds its compass and returns to its statutory role. We are therefore understandably proud of what we have accomplished so far, which has been against all the odds and to the consternation of many across the spectrum. Together with 11 leading non-OPEC countries, led by the Russian Federation we have turned a new page in the history of oil.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

Throughout its history, OPEC has been committed to two statutory watchwords - stability and cooperation. In our experience, they are two sides of the same coin. The best way to achieve stability is through cooperation, while cooperation itself needs stability of commitment by those participating for any process to be meaningful and worthwhile. And with petroleum set to remain at the centre stage of the energy mix in the foreseeable future, OPEC will continue to sing from this hymn sheet which it knows holds all the right notes. Stability through cooperation is tried and trusted – and OPEC is convinced it is the way forward for an industry that will always have challenges to overcome. We therefore call on other producers, not yet on this global platform, to hasten to join.

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Of course, the cooperation I speak of is not just confined to the producers or consumers of oil, but to another strategic stakeholder – the global mass media, as well. Of all the international organizations in existence today, OPEC is perhaps the one that is most frequently in the media spotlight and intense scrutiny. The Organization is written about on a daily basis and most leading media houses even have specialized teams of journalists that focus exclusively on OPEC. At each and every Ministerial Conference of the Organization we receive between 250 and 300 members of the international media descending on the OPEC Secretariat in Vienna. And because we are under this constant glare of exposure, it is both essential and mutually beneficial that we have positive working relations with our colleagues in the media.

Such ties are invaluable for establishing and consolidating efficient and productive links of communication. With OPEC regularly making the news it is vital that our decisions, which often have far-reaching implications for the global energy business and beyond, are not misunderstood or misconstrued. A good deal of that basically comes down to the relationship we have with the members of the media.

In this regard, OPEC needs to remain transparent in its day-to-day operations and clear in its policy initiatives so that the media can have ready access to the Organization’s information and decisions. Importantly, our channel of communication with the mass media must always be open and reliable. In return, we expect the various media outfits and individuals to report accurately, fairly and responsibly on the Organization and its Members. This also requires a high level of professionalism on behalf of the media. Journalists covering petroleum need to be fully conversant about the industry’s issues to be able to write with authority. And for the rapport to prosper there has to be openness, trust and understanding on both sides. I want to think that our general relationship with the media today, not only in the GCC region, but across the world in general, may not be perfect, but is constantly growing in awareness, trust and respect.

However, fostering good ties in any undertaking does not happen overnight. That is an ongoing process that needs constant nurturing through education, insight and understanding. That is why regular seminars, specialist training workshops and fora, such as this one, are so important for enabling economic blocs like the GCC, or organizations like OPEC, to sit down with media representatives to learn more about each other’s perspectives, expectations and aspirations. After all, information is the raw material of the oil industry. This informs our current international outreach and sustained advocacy that is gradually but steadily changing the face of OPEC, globally.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

The ladies and gentlemen of the press constantly remind us that we have an important social responsibility to mankind to fulfill that cannot and should not be ignored. While technology has played a key role in advancing the fortunes of the oil industry, the media, on its part, has been instrumental in bringing the industry closer to the society we serve. Every oil company today has a department or unit dedicated to raising its profile as a responsible corporate citizen - explaining to the public what it does and how it does it. This is about enhancing the relationship between oil and society – bringing awareness to the people of the unique advantages offered by the world’s oil and gas resources, yet showing what the industry is doing to make its operations safer, more efficient and in tune, particularly, with a cleaner environment.

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However, under the watchful eye of the media, we can be proud to say that the industry continues to work very hard to improve its ‘green’ credentials by adapting new technologies to its drilling, production, refining, marketing and distribution activities. OPEC Member Countries have undertaken significant climate change-related projects in their petroleum operations. The UAE, for one, is at the forefront of the industry’s response measures. It is firmly committed to energy diversification, with renewables taking centre stage. Masdar City, located here in Abu Dhabi, is designed to be the most environmentally sustainable city in the world, while the Masdar Energy Company has grown to be a world authority on the subject of renewables. OPEC Member Countries are also pursuing the development of other ground-breaking processes, such as carbon capture and sequestration projects combined with enhanced oil recovery schemes, all in the quest to make their products and operations more environmentally friendly.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

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This brings me to one of the most important issues of our time, which I feel I must mention – that of climate change and our response as global producers of petroleum. Let me first state that OPEC, as an Organization – and I personally - have been at the forefront of the environmental debate and intergovernmental negotiations nearly from its inception. As the global energy transition has progressed, OPEC remains fully mindful of the fact that Member Countries need to use their energy resources in the most efficient, safe and effective way possible, so as to help sustain a healthy planet today and for future generations. But our Organization is also wary of the possible response measures by governments that have the potential to impact energy demand, the welfare of our Member Countries and their socio-economic development - in fact the overall future economy of petroleum. OPEC welcomed the landmark Paris Agreement reached at COP 21 in 2015. Our Member Countries played an important role in reaching the Agreement and will also play a leading role in its implementation – all 13 OPEC Members have already signed the Agreement and are in the process of ratifying it. I believe I am right in saying that the UAE was in fact the first country to put its signature to the ratification. Going forward, we sincerely hope that the same cooperative spirit that led to the successful adoption of the Paris Agreement will be maintained during its implementation stage, despite current uncertainties.

However, as oil producers and a vital cog in the wheels of the global economy, there are certain conditions we need to see met. First, it is essential that the Agreement continues to be guided by the principles and provisions set by the United Nations Framework Convention on Climate Change (UNFCCC). The core principles of equity, underpinned by common but differentiated responsibilities and respective capabilities should not be compromised. Secondly, in choosing the right path, it is critical to remember that oil and gas will continue to be the mainstay of the world economy for the foreseeable future. That undeniable fact has to be accommodated in any final formal plans agreed. Thirdly, as the environmental response develops, it is imperative that the unique situation and circumstances of developing countries be given the priority it deserves. It is critical for us to ensure that the world’s less-developed countries and their populations have equitable access to development and growth opportunities. And that means access to efficient and safe energy resources. OPEC attaches great importance to sustainable development, which is the foundation of growth and prosperity.

Combatting energy poverty is combatting poverty itself. I am pleased to say that OPEC’s sister organization, the OPEC Fund for International Development (OFID), is making great strides in tackling sustainable development and energy poverty issues. Its energy related funding programme currently extends to 90% of the world’s poorest countries, helping them through public and private sector lending, trade financing and grants. In 2016 alone, the energy sector attracted one-third of OFID’s total cumulative commitments for the year. This was equivalent to US$4.3 billion. As of February 2017, OFID’s cumulative commitments for all sectors stood at US$20.3 billion, with total disbursements amounting to US$13.7 billion.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

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OPEC, itself, is constantly looking at areas where it can broaden its information dissemination, especially in the promotion of data transparency with such organizations as JODI, which it is closely affiliated to. Under this transparency drive, OPEC is also expanding its outreach, particularly in Member Countries. In cooperation with the UAE Energy Ministry, we unveiled a new Smart App version for the Organization’s Annual Statistical Bulletin (ASB). And in this Forum, we will unveil a new multi-year ‘Big Data’ project, which is again in partnership with the UAE Energy Ministry and is aimed at developing a sophisticated, comprehensive and easy-to-use multi-dimensional big data tool for analyzing publicly available oil and gas data. In this regard, I would again like to say a special thank-you to His Excellency, the UAE Minister, his officials at the Ministry, as well as the Government, for taking the lead in initiating and advancing such strategic joint ventures between the UAE and OPEC. We hope this will encourage other OPEC Member Countries to establish similar partnerships.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

These are all important initiatives for an Organization that is always looking to enhance its reputation and international standing as an open and accommodating entity. These achievements need to be brought into the public discourse in a positive fashion. That is down to the role of the media, which shoulders a great deal of responsibility for such accurate and timely dissemination. But in this way, the petroleum industry and the media are seen proactively working hand-in-hand to drive home public understanding of the responsible and innovative ways OPEC and the industry operate.

Of course, nowadays, we have another information outlet that we simply cannot ignore – the face of social media, which seemingly continues to expand with each passing year. These are already firmly established applications that are having a growing influence on all walks of society. They are ultra-fast and have the ability to make any piece of news go viral within minutes. But as good as that sounds, there are also pitfalls. The new social media thrust has few boundaries and requires no professionalism or experience. Anyone with a smart phone can become a journalist. And most users of social media are not bound by any media codes or ethics. But while it is true that one cannot control the message on social media, the oil industry still needs to embrace its existence and realize and exploit its true potential for getting our sometimes complex messages across in a timely fashion.

Your Highness, excellencies, distinguished guests, ladies and gentlemen,

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I would like to thank the organizers once again for the opportunity to address you here today and I wish this Forum every success in its endeavours. Thank you for listening.

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OPEC Secretary General, HE Mohammad Sanusi Barkindo, delivering his keynote address at the Third GCC Petroleum Media Forum

OPEC Secretary General, HE Mohammad Sanusi Barkindo, delivering his keynote address at the Third GCC Petroleum Media Forum

OPEC Secretary General speaking to John Defterios, Emerging Market commentator and CNNMoney anchor, during a panel discussion at the Third GCC Petroleum Media Forum

OPEC Secretary General speaking to John Defterios, Emerging Market commentator and CNNMoney anchor, during a panel discussion at the Third GCC Petroleum Media Forum