Fourth Joint OPEC/IEA Workshop

No --
Oslo, Norway
19 May 2006

[Joint Communiqué] A joint workshop was organised today in Oslo by the IEA and OPEC on Global Oil Demand: Outlook and Uncertainties. This event, hosted by the Norwegian Ministry of Petroleum and Energy, was the fourth in a series of workshops that demonstrates a further strengthening in the dialogue and cooperation between these two Organizations.

The previous workshop, which was held in Kuwait City in May 2005, focused on the economic prospects for the MENA region, as well as its energy supply and demand prospects, while the first two workshops concentrated on oil investment prospects, particularly in relation to the oil outlook, investment challenges, drivers and uncertainties.

This fourth workshop considered the key issues and uncertainties for world oil demand over the coming years. Whilst it is accepted that global demand for oil will continue to rise, the exact rate of growth is subject to some uncertainty. The reasons for this include the changing relationship between prices, economic growth and demand; the influence of key demand regions; the pace of technological development; and the likelihood that governments will introduce more stringent energy and environmental policies. This uncertainty is a hindrance to producer and consumer countries alike as it complicates efforts to ensure that the appropriate investments are in place to expand crude production and refining capacity to meet additional demand. The proceedings of the workshop will be published by OPEC and will also provide valuable input to the IEA’s World Energy Outlook 2006 which will be released on 7 November.

The workshop was attended by high-level delegates representing the OPEC and IEA Secretariats, as well as senior government officials from OPEC and IEA Member Countries, international experts focused on economic and energy analysis, and senior representatives from international institutions. The workshop included sessions on challenges in assessing global oil demand prospects, the evolving oil consumption patterns and structures in key oil demand growth regions, and the impact of energy and environmental policies on oil demand. Presentations were made by international experts, as well as by representatives from OPEC and IEA member countries. The workshop concluded with a fruitful panel discussion addressing uncertainties and their implications on the global demand outlook.

In his opening address, OPEC’s Acting Secretary General, Mr. Mohammad Barkindo, said “Given the considerable uncertainties that surround today’s global markets, it is of paramount importance that we develop an outlook in the near- to long-term. For this reason, a good understanding of policy developments and their potential impact on the major demand growth regions is essential for providing a realistic outlook for demand. Security of supply is — and will remain — one of OPEC’s top priorities, along with supporting oil market stability. At the same time, security of demand is essential and can only be achieved by enhanced cooperation from the consuming countries.

In his opening comments, Claude Mandil, Executive Director of the IEA, said “the IEA understands the importance to everyone of accurately forecasting demand. For this reason, since the 1970s we have been publishing scenarios on demand and the implications of new policies adopted in response to environmental, energy security or economic concerns. In today’s rapidly evolving markets we must strive to continue to make the best possible projections using the best available data as this will improve investment confidence. Achieving this requires constructive dialogue between oil producers and the major consumers. Today’s meeting constitutes an important step in this ongoing process.”

Continued strengthening of cooperation and active dialogue between OPEC and the IEA is recognised as an important element in improving the understanding of the concerns of all parties and is in line with the clear mutual interests of supporting oil market stability and predictability.

During the course of the meeting OPEC and the IEA agreed that a fifth workshop in the series will be held in 2007 and will focus on the rising importance of China and India in global energy markets.