Welcoming Remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 2nd Technical Meeting of OPEC and non-OPEC Producing Countries, 27 November 2017, Vienna, Austria.

Distinguished delegates, colleagues, ladies and gentlemen,

I want to share my heartfelt thanks that so many of you have travelled from far and wide to come to Vienna and attend the second edition of our OPEC-non-OPEC technical meeting, under the umbrella of the Declaration of Cooperation. For those of you here for the second time, after attending our 1st Technical Meeting of OPEC and non-OPEC Producing Countries in May, welcome back.

It is very exciting for me to see how our work together is becoming richer and deeper over time, and how these meetings are giving shape and structure to a framework under which future cooperation and sharing of perspectives will take place.

This meeting has been organized for the technical experts of OPEC and participating non-OPEC producing countries and is meant to provide the opportunity to exchange views on key factors impacting oil market developments, including a morning session dedicated to developments in non-OPEC liquids supply.

Before I speak further about what is on the agenda, I want to congratulate everyone here on the one year anniversary of the Declaration of Cooperation. We are here today where others thought we would not be one year ago. We have accomplished what naysayers thought would be impossible, and we have done it with equity, transparency, inclusiveness and fairness. The current market conditions, the returning level of confidence and optimism in the industry are all evidence of the outcome of our joint efforts.

Together with our non-OPEC partners, we have co-authored a new chapter in the history of this industry, one that is about cooperation, stability and sustainability. Our work together over the past year has forged new relationships between OPEC and non-OPEC countries which never existed in the past. This has led to new friendships, new opportunities and laid the groundwork for ongoing future cooperation. We can be very proud of what we have achieved working together.

The decisions we made were historic and mark the first time in the history of the industry that 24 OPEC and non-OPEC producers have joined forces to help contribute to improving oil market stability. I am happy to say that we can now firmly put to rest any suggestions that this process we have started and the Declaration of Cooperation could not be successful.

Our path towards market stability has seen several bumps along the way, and we have suffered occasional setbacks, but our determination and hard work are paying off. The commitment shown by each and every country participating in the Declaration of Cooperation is unprecedented and most remarkable.

The fact that average conformity to the supply adjustments has been over 100 per cent since the implementation of the decision on January 1 of this year not only warms my heart personally, but has led to a new optimism in the oil market not seen for a very long time.

Investment is returning, which bodes well for the future. Without investment now, we will not be able to meet the growing future demand of tomorrow, or accommodate the production losses of older fields. The global economy seems to also be benefitting from improvements in the sector, and is witnessing a state of growth not seen since the last financial crisis.

After reaching record-high levels of more than 380 million barrels over the five-year average, OECD commercial oil inventories have steadily fallen to stand 140 million barrels above the five-year average in October. Additionally, excess crude in floating storage has been drawn down considerably, by 50 million barrels since June 2017, supported by the shift in the market structure where for the first time since the summer of 2014, all major crude oil benchmarks have flipped into backwardation, signaling clearly a market that is steadily returning to balance.

Ladies and gentlemen,

Today’s meeting follows on the successful first Technical Meeting of OPEC and non-OPEC producing countries held on 19th May of this year. Seventeen countries participated in this event, including five non-OPEC countries. Five external experts delivered presentations, which was followed by a very constructive dialogue.

The special theme chosen at that time was US tight oil prospects. In fact, due to its pertinence and further recommendations, we have dedicated a full-day workshop held on the same subject on 22 November that allowed us a deeper dive on most recent developments and likely prospects. Our special focus in this morning’s session with invited experts will be of complementary nature, namely looking at liquids supply prospects in other non-OPEC regions.

Our meeting today provides the opportunity to share views on short- and medium-term oil market developments. Additionally, the morning session will focus on conventional non-OPEC liquids supply developments. Our esteemed speakers will discuss supply prospects both globally and in the North Sea, Latin America, Canada, Russia, Kazakhstan and Africa.

Ladies and gentlemen,

As is stated in the Declaration of Cooperation: “Countries participating in the Declaration of Cooperation decided to strengthen their cooperation, including through joint analysis and outlooks, with a view to ensuring a sustainable oil market, for the benefit of producers and consumers and to regularly review at the technical and ministerial levels the status of their cooperation.”

Our joint meetings and activities will support us in creating a stable market that is less subject to extremes, both today and in the future.

We must strive to remain committed to our joint statements in the Declaration of Cooperation and ensure continuity. This is beyond attaining short-term market rebalancing, and calls for strengthening our cooperation through a dynamic and transparent framework for sustainable market stability in the medium- to long term. These technical meetings are undoubtedly an integral part of this critical process.

Thank you.

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General

2nd Technical Meeting of OPEC and non-OPEC Producing Countries took place at the OPEC Secretariat in Vienna

2nd Technical Meeting of OPEC and non-OPEC Producing Countries took place at the OPEC Secretariat in Vienna