Scene Setting Remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at Plenary Session 1, 16^th IEF Ministerial, 11 April 2018, New Delhi, India.

Excellencies, ladies and gentlemen.
Good morning.

I am deeply honoured to participate at the International Energy Forum’s 16^th Ministerial Meeting. I want to thank the Government of India for hosting this event, along with the Governments of the People’s Republic of China and Korea for acting as co-hosts.

I also want to thank the IEF’s most noble Secretary General, HE Dr. Sun Xiansheng, who I have come to deeply respect over the course of our mutual engagement on energy issues.

When we talk about ‘The Future of Energy Security’, OPEC has always recognized market stability as a cornerstone. Today’s picture is completely different to when we convened in September 2016 in Algiers at the last IEF Ministerial Meeting.

In the contemporary history of oil, it was probably the most downcast moment. The ship was drifting without a compass, threatening not only the fate of this noble industry that has fueled current unparalleled global prosperity, but putting the future of oil as an energy source of choice at great risk.

Prices were in a free fall since mid-2014. The world’s oil supply massively outpaced demand. Economies were depressed and industry jobs were being shed. Investments were cut or frozen. OECD commercial stock levels had swelled to a record high of 400 mb in February 2016. The market was at 0!

Something had to be done, and done urgently, hence OPEC decided to take the lead and return to the driver’s seat. Cooperation is the cornerstone of this newly budding leaf of life, and the main tool used to achieve the organization’s renewed commitment to jointly rescue the industry and restore sustainable market stability.

The historic Declaration of Cooperation between 24 OPEC and non-OPEC participating countries signed on 10^th December 2016 has shown what the determined efforts of a group of nations can bring. At the third joint meeting on 30^th November of 2017 the Declaration of Cooperation was amended to continue throughout 2018.

Today we can say that the rebalancing process is well underway, with strong conformity throughout 2017 - averaging 109% – turning market pessimism into optimism. In February 2018, conformity reached a record 138%. In March, we are heading to another record level of conformity.

The overhang in OECD commercial oil stocks has shrunk to below 44 mb, investment is gradually inching back, and world economies are continuing to fire on all cylinders!

Excellencies, ladies and gentlemen,

It took all of us together to bring the oil market out of the wilderness, and we need to take these lessons into the future. The equally important second phase of our efforts includes institutionalization of this cooperative process into a broader framework and ensuring continuity. This also means creating an enabling environment for adequate and timely investment, not only to maintain current production levels and replace natural decline, but also to satisfy future oil demand.

In addition, OPEC Member Countries recognize sustainable development and alleviation of energy poverty as universal aspirations. OPEC is also fully engaged in and supportive of the Paris Agreement, which has been signed by all and ratified by most Member Countries. We believe in an all-inclusive approach, hence our decision to actively work on a global consensus.

Excellencies, ladies and gentlemen,

The global energy system is undergoing significant and speedy changes and becoming progressively complex. Our economies are increasingly interwoven. We must build on our common ground to face upcoming challenges together, strive for sustainable market stability and safeguard future energy security through our ongoing effective cooperation. The irreversible forces of globalization will continue to shape this energy transition.

We have, through the Declaration of Cooperation, which has become a permanent feature on the global energy scene, established a new framework for producing countries, taking into account the strategic interests of consumer countries as well as the world economy.

Thank-you.