Opening Remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 1st Meeting of the High-level Committee of the Algiers Accord (OPEC and non-OPEC Countries), Saturday, 29 October 2016, Vienna, Austria.

Distinguished delegates,
Ladies and Gentlemen,

I would like to welcome all of you to the OPEC Secretariat.  Some of you are here for the first time.

I am especially pleased to see the high-level presence of His Excellency, Natig Aliyev, Azerbaijan Minister of Industry and Energy. We are honoured to have you at this meeting.

You join OPEC and its Member Country representatives for an important meeting – and what I hope will be a fruitful day of deliberations.

This meeting is the result of the decision reached at the 170th Extraordinary Meeting of the OPEC Conference in Algeria last month.

That agreement – now known as the Algiers Accord – set a production target for OPEC’s 14 Member Countries, 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.

The Algiers Accord was truly a landmark achievement. It was a collective decision reached by consensus of all the OPEC-14 Member Countries.  It hindered a further slide in crude oil prices – which have since reversed direction – and also reduced volatility.  These were certainly positive and encouraging.

However, the markets are still under pressure of oversupply as reflected in excess stocks.  The recovery process has taken far too long and we cannot risk delaying the adjustment any further.

The Algiers Accord enabled a common platform for an effective action for us all and it should be implemented in a timely fashion. Anything short of implementation of this Accord could lead to the elongation of the rebalancing process with further deterioration of financial conditions and setbacks in investments extending into a third year, which would be unprecedented. 

Therefore, we should be calling for maximum commitment from all OPEC and non-OPEC countries in this regard and we should expect no less as this is our commitment, not only to our Member Countries but to the global community.

Today’s meeting, therefore, comes at a critical time for the global oil market as we producers jointly put efforts into taking action for the sake of the ‘sustainable market stability’ we all desire.

The Algiers Accord also mandated several other important things.

First, it established this High-level Committee, which was mandated to work towards the implementation of production levels among our Member Countries.

This Committee, which brings together both OPEC and non-OPEC producers, is now tasked with engaging in deliberations that we hope will lead to coordinated and timely action in response to such challenges – for the benefit of the global economy and the common good of all.

Second, the Algiers Accord also mandated this Committee to develop a framework of high-level consultations between OPEC and non-OPEC producing countries – a mechanism to facilitate long-term dialogue between us.

This is meant to be a process through which we may together identify risks and take pro-active measures to ensure a balanced oil market on a sustainable basis.

Over the past couple of months we have been part of many consultations and discussions – both with fellow OPEC countries and non-OPEC countries as well – about how best to return stability to the market.

Let me state that our talks with non-OPEC countries – in which the Russian Federation has played an extremely active role – have been very constructive.

I recall the optimistic nature and conduct of our talks on the side-lines of the World Energy Congress in Istanbul, around two weeks ago.

We also had very positive consultations just this week during our High-level OPEC-Russia Energy Dialogue on Monday. 

Such close interactions are indeed very supportive – and are exemplary for the cooperation and joint actions we clearly seek among producers.

I would also like to recognize the important leadership role already played by some non-OPEC countries.  The statements of some national leaders – of countries such as Oman and Russia, for example – have demonstrated their support for this meeting, and reflect a broad understanding of the importance of sharing contributions among non-OPEC countries.

I was very much encouraged by the statement made by Vladimir Putin, President of the Russian Federation at the World Energy Congress on October the 10th in Istanbul.  He stated that “Russia is ready to join joint measures on reducing the production of oil and invites other oil exporters to do so”. 

Such support is important at critical times like these.  It gives testimony to what some might think is only a narrow concern of a few countries.  And it exemplifies the readiness of non-OPEC producers to enhance the rebalancing process.

If we can remember that it is only together – not individually – that we can move forward, then I remain hopeful that the outcome of today’s meeting will be positive. 

This calls for joint, coordinated and timely actions.  And we hope to discuss how to implement such actions across both OPEC and non-OPEC producers.

These talks are vital to better understand each other, our current circumstances, and what options are available to us to help reduce the imbalance and increase the stability of the market.  We believe that by finding common ground among all producers, we will be able to develop lasting and sustainable solutions to the challenges we all face today.

I wish to thank you for your attention – and I wish you all fruitful deliberations.

HE Barkindo delivers his opening remarks

HE Barkindo delivers his opening remarks

HE Barkindo listens to the meeting deliberations

HE Barkindo listens to the meeting deliberations

OPEC and non-OPEC participants at the OPEC Secretariat

OPEC and non-OPEC participants at the OPEC Secretariat