Opening Remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 1^st Meeting of the High-level Committee of the Algiers Accord (OPEC Member Countries), Friday, 28 October 2016, Vienna, Austria.

Distinguished delegates,
Ladies and gentlemen,

I would like to welcome you all to the most important gathering since the last Meeting of the Conference held in Algeria. That meeting, of course, produced the Algiers Accord, which has brought us here today. Today’s meeting is a continuation of that landmark decision.

We are certainly living in challenging times – a time when many of the old ‘certainties’ have fallen away and a new landscape has opened up before us.

However, it is a landscape so populated with changing variables that no single nation, company or enterprise can realistically be expected to respond alone.

In fact, the challenges in the current market environment have highlighted the importance of OPEC’s role – not only for its Member Countries, acting as one, but also for the benefit of the global economy.

These challenges have also underscored the need to forge ahead together – in ways that honour the relationships among our Member Countries.

This is our duty. It is our mission.

With this in mind, we meet to develop a framework for the implementation of the Algiers Accord.

Our deliberations today – and tomorrow with some non-OPEC producers – could very well have fundamental ramifications for the market, as well as for the medium- to long-term of the industry.

You will recall that the 170^th Extraordinary Meeting of the Conference opted for an OPEC-14 production target ranging between 32.5 and 33 mb/d in order to accelerate the ongoing drawdown of the stock overhang and bring the rebalancing process forward.

This was decided in order to restore much-needed stability to the market on a sustainable basis.

Already this decision has reversed the market trend positively and reduced relative volatility.

In establishing this Committee, the mandate of the Algiers Accord was, among others, to also develop production levels among our Member Countries within the agreed target range.

It also mandated that the Committee develop a framework of high-level consultations between OPEC and non-OPEC producing countries.

Since the Algiers Accord, a ‘road map for implementation’ has already begun to take shape. This has emerged in the process of carrying out extensive consultations with other stakeholders on how best to honour and implement the Conference’s decision – in the interest of all producers and consumers.

Thus, OPEC has sought to use every occasion in recent weeks to advance the Accord. It has used additional platforms to confer with other producers.

Similarly, OPEC has used other fora – like the G-24 Ministerial and the IMF/World Bank meetings in Washington, as well as the World Energy Congress in Istanbul – for extensive exchanges of perspectives on the current challenges facing not only the oil and gas industry but the global economy in general.

The market has been out of balance for too long, due primarily to supply driven forces. These have led to a severe correction in prices, impacting required and timely investments, which is now threatening future supply.

OPEC and non-OPEC must now come together and take coordinated and timely action for the common good of all.

While we have seen the rebalancing process already underway, the physical market remains in surplus. A large stock overhang continues to persist. And today’s excess stocks of around 300 million barrels calls for our collective and urgent action.

The recent High-level OPEC-Russia Dialogue Meeting this Monday was a good reflection of the broader consultations with other producers that we continue to undertake in response.

Personally, I also just visited Baghdad, Iraq – the birthplace of our Organization and a key Founder Member – in order to solidify the consensus of the Algiers Accord.

I also plan to visit other Member Countries in due course. But our task for today is clear.

Our meeting today will include presentations given by the  Secretariat – and, hopefully, other Member Countries – in order to provide you with the most current industry data and analysis.

We expect that this will facilitate and enrich your deliberations.

Finally, in accordance with the mandate of the Algiers Accord, we are also expected to develop a long-term framework for regular, structured and sustainable consultation with non-OPEC producers. Our meeting with some of them will take place tomorrow.

Thank you for your attention. I will now yield the floor to the Chairman of the Board.