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C o m m e n t a r y

Dialogue is alive and well

In an increasingly globalized, complex and interdependent

energy industry, dialogue has become essential for any stake-

holder to accomplish its goals. In times such as these, no one

can go the distance alone.

OPEC has been at the forefront of international energy

dialogue since the early 1990s, when it joined forces with

the International Energy Agency to begin a platform for pro-

ducer-consumer dialogue through the establishment of the

International Energy Forum (IEF).

Since its founding in July of 1991 in Paris, the

IEF

has

evolved to become the world’s preeminent venue for dia-

logue between global oil and gas producing and consuming

countries.

Today, its

72 Member Countries,

representing all six con-

tinents, encompass nearly 90 per cent of global supply and

demand for oil and gas. Its membership has expanded over

the years to include transit states and other producers such

as Argentina, China, India, Mexico, Russia and South Africa.

OPEC continues to play a leading role in the IEF’s biennial

Ministerial Meetings, which host the world’s largest gather-

ing of energy ministers.

In the years since the IEF was founded, OPEC has ex-

panded its dialogue activities to include platforms with the

European Union, the Russian Federation, and more recently,

Japan, India, China and the United States.

Additionally, since 2016, intensified dialogue between

OPEC and non-OPEC producing countries culminated in the

historic ‘Declaration of Cooperation’, in which 24 producers

came together to help rescue the oil market from one of the

worst downturns in history, when the oil price plummeted by

nearly 80 per cent in mid-2014.

This month, OPEC’s dialogue efforts were in full swing as

the Secretary General spoke in several of the world’s capitals

to promote lasting stability in the world oil market.

In Russia, on October 3, he shared a panel with President,

Vladimir Putin, during the country’s premier oil and gas event

— Russian Energy Week.

Both leaders made comments emphasizing the ongoing

importance of dialogue in the industry.

President Putin noted that the landmark OPEC and non-

OPEC cooperation, in which Russia has played a key role, was

helping restore stability to the oil market and providing ben-

efits to the world economy.

“Everyone is interested in a stablemarket,” he said. “What

we did with OPEC, I believe, is beneficial for all the global

economy.”

The Secretary General, in his remarks, noted the impor-

tant role of dialogue in increasing transparency and reducing

volatility.

“Through our dialogues and cooperation, we can lessen

the hills and valleys of high volatility which create instabil-

ity in the market and risks for future investment,” he stated.

“While some ups and downs are endemic to the oil industry,

we can certainly lessen their impact by sharing information

and moving towards a common goal.”

A week later, the Secretary General was in New Delhi to

take part in the first-ever India Energy Forum. Again here, he

underlined the prominent role of dialogue between OPEC and

one of the world’s largest consumers.

“This premier energy forummarks a newstage in the grow-

ing strategic relationship betweenOPEC and India, and builds

onpreviousmeetings and interactions thatwehavehad so far,”

he said. “My friend, Honourable Minister Pradhan, reminded

me on Sunday, during our OPEC-India bilateral meeting, that

within less than a year, we have already met five times. The

dialogue between OPEC and India — the relationship that we

celebrate here today — is rather unique given India’s role as

one of the most dynamic countries in the world.”

Before the end of the year, OPEC will engage in at least

two more high-level dialogues with the European Union and

China.

OPEC has also initiated a new era of dialogue with the

United States, which began last December when an OPEC del-

egation, led by the Secretary General, held a series of high-

profile meetings in Washington, DC and New York City.

The week-long itinerary included meetings at the

International Monetary Fund, the US Energy Information

Administration, the Centre for Strategic and International

Studies(CSIS),theUSCommodityFuturesTradingCommission,

Columbia University and IHS Markit.

During remarks delivered at CSIS on December 13, 2016,

the Secretary General extended an invitation for the US to

join OPEC’s portfolio of international dialogue initiatives.

“We hope now that the United States will join us for a new

era of collaboration and dialogue, so that we can work togeth-

er towards our mutually beneficial goal of ensuring stability

in the world energy markets,” he said. “These conditions will

contribute to economic growth and prosperity, two things we

all desire for this and future generations.”

During this month’s India event, the Secretary General

reinforced this message, urging producers in the US to join

the collaborative efforts currently being made by OPEC and

non-OPEC producers to rebalance the global oil market.

“We urge our friends in the shale basins of North America

to take this shared responsibility with all seriousness it de-

serves, as one of the key lessons learnt fromthe current unique

supply-driven cycle,” he stated.

Only time will tell as to how the US oil industry might re-

spond to this open invitation. One thing is certain, though:

OPEC’s long history of dialogue and cooperation, which is

alive and well today, is bearing fruit and bringing us closer

to a healthy, stable and sustainable global oil market.