Further steps in the constructive EU-OPEC Energy Dialogue

No --
Brussels, Belgium
24 Jun 2008

The fifth ministerial-level meeting of the Energy Dialogue between the European Union (EU) and the Organization of the Petroleum Exporting Countries (OPEC) took place in Brussels, today.

Representatives of the EU included Mr Andrej Vizjak, President of the EU Energy Council, Minister of Economy of Slovenia; Mr Jean-Louis Borloo, incoming President of the EU Energy Council, Ministre d'Etat, ministre de l'énergie, de l'écologie, du développement durable et de l'aménagement du territoire of France; and Mr Andris Piebalgs, European Commissioner for Energy. Representatives of OPEC included Dr Chakib Khelil, President of the OPEC Conference, Minister of Energy and Mines of Algeria; Mr Desidério da Graça Veríssimo e Costa, Alternate President of the OPEC Conference, Minister of Petroleum of Angola, and Mr Abdalla Salem El-Badri, Secretary General of OPEC.

The EU and OPEC representatives welcomed the progress that had been made since the fourth meeting of the Energy Dialogue in Vienna, Austria, on 21 June 2007. This included: a joint study on oil refining, with a follow-up workshop, held in Brussels, in January 2008; the launch of a joint study on the impacts of financial markets on oil price and volatility; discussions about the establishment of a joint energy technology centre; and other meetings and discussions on subjects of common interest. The representatives expressed their appreciation for the constructive exchanges of views in all these activities.

The participants underlined the importance of dialogue between producers and consumers, when prices are high or low. The recent Jeddah Energy Meeting is the latest instance of such dialogue. The participants reiterated their mutual interest in stable, transparent, and predictable oil markets, and recalled their recognition of the reciprocal nature of energy security, with security of supply and security of demand being two faces of the same coin. In this regard, they recognised the importance of secure future demand for crude and products in spurring timely investment both upstream and downstream, thus contributing to greater security of supply.

While acknowledging the continued importance of fossil fuels, and in particular oil, in responding to the future world energy needs, they also welcomed the growing diversity in the energy mix, including renewables. They further stressed the importance of sustainable development, with its three mutually supportive pillars of economic development, social progress and protection of the environment. They also recognised the needs of the poorest to access modern energy services, efforts towards avoiding waste of valuable resources, including through improved energy efficiency, as well as the need to develop and deploy cleaner fossil fuel technologies, in particular Carbon Capture and Storage (CCS).

EU representatives outlined their recent policy proposals, which are currently being discussed in the European Parliament and Council, as well as developments in relation to the Energy and Climate Change package and the Internal Energy Market. For their part, OPEC representatives presented their analysis of the recent developments in the oil market, reiterating that it remains well supplied, with supply exceeding demand and with healthy commercial crude stocks. OPEC stressed the role of financial markets as well as the declining value of the dollar in driving the current crude oil price and volatility, in particular through increased speculative activity.

Another session involved the presentation of the 2030 baseline demand scenario by the EU, and the latest World Oil Outlook prepared annually by OPEC. This exchange of views represents an essential contribution to deepen mutual understanding. The presentation provided the EU with an opportunity to confirm that its policy developments will not translate into a reduction in oil imports. OPEC, in its presentation, stressed the uncertainties related to the demand for its crude, stemming mainly from technology, alternative fuels as well as consuming countries policies.

Finally, the meeting was presented with the main conclusions of the joint study on oil refining and the follow-up workshop, attended by member countries and industry representatives. The meeting also considered a progress report of the joint study on the impact of financial markets on oil price and volatility and a progress report on the EU-OPEC energy technology centre.

The meeting agreed on the following work programme, with report to the 6th Ministerial Meeting:

  • to hold a round table on CCS, which will take place in Brussels, tentatively on 31st October 2008, followed by technical site visits;
  • to finalise the joint study on the impacts of financial markets on oil price and volatility, to be followed by an international workshop in Vienna, early 2009;
  • to undertake a feasibility study on the establishment of an EU-OPEC Energy Technology Centre, also addressing education and training;
  • to prepare terms of reference for a joint study on the impacts of biofuels on oil refining.

The 6th EU-OPEC Ministerial Meeting is scheduled for June 2009 in Vienna.