152nd (Ordinary) Meeting of the OPEC Conference

No 4/2009
Vienna, Austria
15 Mar 2009

The 152nd Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) convened in Vienna, Austria, on 15th March 2009, under the Chairmanship of its President, HE Eng. José Maria Botelho de Vasconcelos, Minister of Petroleum of Angola and Head of its Delegation, and its Alternate President, HE Eng. Derlis Palacios Guerrero, Minister of Mines and Petroleum of Ecuador and Head of its Delegation.

The Conference congratulated HE Sheikh Ahmad Al-Abdullah Al-Ahmad Al-Sabah on his appointment as Minister of Oil of Kuwait and Head of its Delegation, and similarly congratulated HE Dr. Rilwanu Lukman on his appointment as Minister of Petroleum Resources of the Federal Republic of Nigeria and Head of its Delegation.

The Conference warmly welcomed HE Natiq Aliyev, Minister of Industry and Energy of Azerbaijan, HE Eng. Shamel Hamdy, First Under Secretary, Ministry of Petroleum of Egypt, HE Dr. Aldo Flores, General Director of International Affairs, Mexican Secretariat of Energy, HE Igor Sechin, First Vice Prime Minister of the Russian Federation, HE Al Zubair Ahmed Hassan, Minister of Energy and Mining of Sudan, and HE Suleiman J. Al-Herbish, Director General of the OPEC Fund for International Development, attending the Meeting as Observers.

The Conference reviewed the Secretary General's report, the report of the Economic Commission Board, the report of the Ministerial Monitoring Sub-Committee – whose Members the Conference once again thanked for their longstanding efforts on OPEC's behalf – and various administrative matters.

In its review of recent oil market developments, along with the Secretariat's supply/demand projections for 2009, the Conference was concerned to note that the world economy is in the midst of the worst global economic recession in decades, with the world economy forecast to contract by 0.2% in 2009, considerably lower than the forecast in December 2008, and downside risks dominating, especially in the OECD region. It also noted that while a necessary condition for economic recovery is a return of confidence in financial markets, and that systemic risks to the financial system have already been reduced, the degree of success of bank bailout plans and fiscal stimulus packages may only become evident later in the year, in addition to which equity markets remain bearish with the potential for further downward movement.

The Conference also observed with concern the deep impact of the economic downturn on world oil demand, estimated to decline by 1.0 mb/d in 2009 to 84.6 mb/d. As a result of this, high stock levels, which are currently at 59 days of forward cover, will persist. At the same time the Conference noted that non-OPEC supply is forecast to grow by 0.4 mb/d in 2009, to 50.7 mb/d, resulting in a total call on OPEC production during 2009 of 29.1 mb/d, a reduction of 1.8 mb/d over 2008.

In this regard the Conference voiced its hope that the decisions taken by the forthcoming meeting of G-20 in April 2009 may contribute a substantial improvement to the world economy.

The Conference, however, welcomed, some initial signs reported of a reversal in crude oil-stock trends, and a narrowing of the contango in the front price structure, indicating that the adjustment process instigated through OPEC measures vis-à-vis excess supply in the market is gradually helping to redress balance, and was also pleased to observe that following the decision taken by the 151st (Extraordinary) Meeting of the Conference in December 2008 to cut 4.2 mb/d from the actual September 2008 OPEC-11 production level with effect from 1st January 2009, compliance for the month of February, according to secondary sources, was 79%, which has contributed to balancing the price of the OPEC Reference Basket at around US$40/b since the beginning of the year, despite the critical economic outlook.

The Conference therefore emphasized its commitment to comply fully with its decision of December 2008, in order to further contribute to market stability. The Secretariat will monitor very closely developments in the market. Furthermore, the Conference will convene in Vienna, on Thursday 28th May 2009, to consider any further actions deemed necessary. The Conference also agreed that its next Ordinary Meeting will be convened in Vienna, on Wednesday 9th September 2009.

At the same time the Conference reiterated its commitment to stabilizing the market, ensuring a regular supply of petroleum to consumers at price levels which are equitable not only for the world economy, for consumers but also to ensure adequate future supply.

The Conference decided to extend the term of office of Mr. Abdalla Salem El-Badri as Secretary General for a further term of office of three years, as of 1st January 2010.

The Conference passed Resolutions that will be published on 15th April 2009, after ratification by Member Countries.

The Conference again expressed its appreciation to the Government of the Republic of Austria and the authorities of the City of Vienna for their warm hospitality and the excellent arrangements made for the Meeting.