Continuation of high-level dialogue between OPEC and Russia

No --
Moscow, Russia
24 Oct 2008

HE Dmitry Medvedev, President of the Russian Federation and HE Abdalla Salem El Badri, Secretary General of the Organisation of Petroleum Exporting Countries (OPEC) met on 22nd October, 2008, in Moscow. The meeting was attended by Russia’s Deputy Prime Minister, Igor Sechin, Minister of Energy, Sergei Shmatko, as well as high-level officials.

The President of the Russian Federation recalled the role of OPEC Member Countries and Russia, as major energy and oil producers and exporters. He underlined the importance of the cooperation between OPEC and Russia and highlighted the Russian readiness for a continuous and comprehensive dialogue with OPEC, for the purpose of achieving stable and predictable oil markets. This is particularly important, given the development of turmoil in international financial markets and its adverse influence on the world economy and oil markets.

HE Abdalla El Badri stated that the dialogue with the Russian Federation is of key importance. He described the behaviour of oil markets since the middle of last year, stressing that they remained well supplied and that the observed high volatility was mainly caused by non-fundamentals, such as the value of the dollar and the speculation in futures markets and in non-regulated exchanges, where the daily volume of traded paper barrels by far exceeds the volume of physical barrels produced. He also noted the negative consequences of the current global financial crisis both on the world economy as a whole and on oil exporting countries. Having reviewed OPEC’s recent assessment of market conditions and outlook, he stated that the situation called for increased vigilance and a proactive stance.

Both parties shared the concern that the current turmoil might have large negative impacts on the volume of investments in the oil sector, and might lead to cancellation of projects and freeze the launching of new oil and gas projects.

It was also agreed that the development of the dialogue and cooperation between OPEC and its Member Countries, and the Russian Federation is essential to overcome such a crisis and to ensure stability of the oil market, something which is crucial for producers and consumers alike, both in the short- and the long-term.

HE Abdalla El Badri also made a keynote presentation at the opening ceremony of the International Energy Week, addressing the current oil market situation as well as the long-term challenges facing the oil industry. OPEC’s delegation additionally held working meetings with high-level Russian officials.

During the Third OPEC-Russia workshop held on the 23rd October, issues were examined related to the current state of the world oil market and long-term perspectives, among them the oil and gas sectors in the Russian Federation, as well as global environmental and world trade matters.

The fourth workshop is planned to be held next year at OPEC’s Headquarters in Vienna.