Opening address to the 172nd Meeting of the OPEC Conference

No 21/2017
Vienna, Austria
25 May 2017

by HE Khalid A. Al-Falih, Saudi Arabia's Minister of Energy, Industry and Mineral Resources, and President of the OPEC Conference


Your Excellencies, Distinguished Delegates, Ladies and Gentlemen: Good morning.  It is my pleasure to welcome you all to the OPEC Secretariat for the 172nd Meeting of the OPEC Conference.  I would especially like to recognize and welcome several esteemed gentlemen who join us here for the first time.

I first would like to welcome and congratulate His Excellency Issam A. Almarzooq, who was appointed Kuwait’s Minister of Oil, and Minister of Electricity and Water last year.

Second, I would like to similarly welcome and congratulate His Excellency Dr. Nelson Martínez, who was appointed People’s Minister of Petroleum of the Bolivarian Republic of Venezuela early in 2017.

Third, I would also like to welcome and congratulate His Excellency Pascal Houangni Ambouroue, who was appointed Minister of Petroleum and Hydrocarbons of Gabon, also earlier this year.

And finally, I would like to welcome and congratulate His Excellency Carlos E. Pérez, Ecuador’s Minister of Hydrocarbons, who was appointed earlier this month.

Our gratitude and sincere thanks go to their predecessors, who contributed greatly to our past successes.

I would also like to recognize His Excellency Gabriel Mbaga Obiang Lima, Minister of Mines and Hydrocarbons of the Republic of Equatorial Guinea, and welcome his nation, which has joined the Organization as a Member Country.

On behalf of everyone here, Your Excellencies, we look forward to working together with each one of you and your national delegations.

Ladies and Gentlemen,

Since our last meeting in November, the oil market situation has markedly improved.  We started with a bearish sentiment, but the market is now well on its way toward rebalancing.  We have more work to do in lowering inventories toward the last five-year average, but we are on the right track.

Stakeholders across the spectrum are benefitting from the improved situation—not only the producers who are part of the supply agreement but other countries as well.  IOCs are also posting their best quarterly earnings in two years.  Investment flows into the upstream sector have picked up, albeit at a slower pace than required to meet forecast long-term demand.  And despite potential volatility, I expect the situation to continue improving, assisted by a more robust global economy and higher GDP growth in 2017, as well as fairly healthy oil demand growth this year, particularly in Asia.

The market has seen OPEC’s firm and unwavering resolve, along with that of the participating non-OPEC producing countries, as reflected in the high level of conformity—with reductions exceeding 100 percent of the target in first four months of the agreement.  The Joint Ministerial Monitoring Committee and the Joint Technical Committee were created to effectively implement the accords, and both have helped deliver concrete results, leading to the return of confidence and positive market sentiment I referred to earlier.  I would like to recognize their contributions.

But these outcomes could not have been achieved without the extensive process of consultations and discussions involving all of the OPEC Member Countries and the participating non-OPEC producing countries.  So, I would like to compliment and congratulate all of my colleagues for this accomplishment, and for the high level of conformity exhibited by the majority of Member Countries, without which the market would still be adrift.

Nevertheless, vigilance should be the watchword of the day, and it is critical that we do not become complacent.

Your Excellencies, ladies and gentlemen,

At today’s meeting, we will review the developments of the past six months, as well as the market outlook for the remainder of 2017 and beyond, as we consider our posture going forward.

The main focus for today remains on consolidating, strengthening and accelerating the process of rebalancing, alongside the important task of drawing down global oil inventories.

Together with our partners among participating non-OPEC countries, we will continue to monitor the health of the oil market and the wider global economy, and examine ways to accelerate recovery and return the market to its normal condition.

Your Excellencies, ladies and gentlemen,

Beyond the important task of rebalancing markets in the short to mid-term, I would also like to reiterate the vision for a forward-looking OPEC of the future that I outlined after assuming OPEC’s Presidency early in the year.

Nurturing a constructive and stable market environment is our highest priority.  This goal is important not only for us but also for consumers, as it ensures a sustainable future for oil supply and demand—the absence of which may produce seriously unwelcome outcomes such as price spikes and risks to global energy security.  Other key objectives include strengthening cooperation between OPEC and non-OPEC producers, and fostering excellent relations with international energy institutions to promote greater understanding of vital issues.

OPEC also has a fundamental interest in the health of the global economy and the worldwide energy industry, so that appropriate levels of investment are maintained and technological progress continues to be encouraged and nurtured.  OPEC will therefore be strengthened to proactively deal with emerging challenges, and the institution will further evolve as a highly respected organization able to deal with growing complexity and accelerating change.

Lastly, we will give special attention to lightening the environmental footprint of oil, making a positive and compelling case for our natural resources.  We will therefore engage appropriately with the United Nations Framework Convention on Climate Change, or UNFCCC.

Your Excellencies, ladies and gentlemen,

As we begin today’s Meeting of the Conference, the task in front of us is admittedly challenging and complex, but I’m confident that by working together we can and will accomplish our goals for the mutual benefit of all.  Thank you for your attention.

 HE Khalid A. Al-Falih, Saudi Arabia's Minister of Energy, Industry and Mineral Resources, and President of the OPEC Conference

HE Khalid A. Al-Falih, Saudi Arabia's Minister of Energy, Industry and Mineral Resources, and President of the OPEC Conference

HE Khalid A. Al-Falih, OPEC Conference President (c); Mr. Estévâo Pedro, Angola's Governor for OPEC and Chairman of the Board of Governors (l); and HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Khalid A. Al-Falih, OPEC Conference President (c); Mr. Estévâo Pedro, Angola's Governor for OPEC and Chairman of the Board of Governors (l); and HE Mohammad Sanusi Barkindo, OPEC Secretary General