OPEC : Opening address to the 139th (Extraordinary) Meeting of the OPEC Conference

Opening address to the 139th (Extraordinary) Meeting of the OPEC Conference

No 2/2006
Vienna, Austria
31 Jan 2006

by HE Dr Edmund Maduabebe Daukoru, President of the Conference and Minister of State for Petroleum Resources of Nigeria

Excellencies, ladies and gentlemen,

Welcome to the 139th (Extraordinary) Meeting of the OPEC Conference.

Before we turn our attention to the main subject of today’s Meeting, let me, once again, offer the deepest condolences of the OPEC Conference and those of the Secretariat to the Governments and the citizens of two of our Member Countries, following the sad loss to their leaderships earlier this month. His Highness Sheikh Maktoum bin Rashid Al-Maktoum, the Vice President and Prime Minister of the United Arab Emirates, passed away on 4 January. Less than a fortnight later, on 15 January, His Highness Sheikh Jaber Al-Ahmad Al-Sabah, the Emir of Kuwait, passed away. At times like these we can do no less than to re-affirm the spirit of friendship and solidarity that exists among our Member Countries. We pray to God Almighty to grant their souls eternal rest. I would also like to take this opportunity to congratulate their successors and pray for God’s guidance as they steer the affairs of their people.

On assuming the post of President of the OPEC Conference on 1 January, I also took on the responsibilities of the OPEC Secretary General, until such time as a new Secretary General is elected — as was the case with my distinguished predecessors from Indonesia and Kuwait in 2004 and 2005, respectively. To discharge this combined responsibility, I have named Mr Mohammed Barkindo, the Deputy Managing Director, Nigerian LNG, to undertake the task of Acting for the Secretary General during 2006, by subsisting leave of Conference. Mr Barkindo, who has worked closely with the Secretariat for two decades and is very familiar with its activities, being the longest-serving member of the Economic Commission Board, has since moved to Vienna to take up this assignment.

Today’s Extraordinary Meeting is the result of a decision taken when the Conference last met, in Kuwait on 12 December, and its purpose is to review the current market situation and take the appropriate decisions on production levels for the second and third quarters of the year. It has become the practice since a few years ago to hold Extraordinary Meetings between our two biannual Ordinary Meetings, scheduled for March and September; this is to ensure that our Organization remains abreast of developments in the oil market at all times and that we can fine-tune our production commitments in accordance with the shifting realities of the market, as well as respond — effectively, even at short notice — to any unexpected events as they arise, such as Hurricanes Katrina and Rita late last summer.

As we meet today, there is continued price volatility in the market and, clearly, we shall be addressing this issue once again, focusing on the outlook for the coming months. We have, throughout of 45-year history, maintained that volatility is not in the interest of long-term players in the oil market. All producers — OPEC and non-OPEC — as well as consumers and the major oil companies, must, therefore, do everything they can to stabilise the market. This is something OPEC cannot tackle alone. All parties benefit from stability, and, therefore, all parties must contribute to its achievement.

Excellencies, ladies and gentlemen,

Early indications suggest that the world economy will perform well in the first half of 2006; indeed, the forecast for world GDP growth for the whole of this year has already been increased slightly, reflecting improved expectations for Europe, Japan and China, though risks remain visible on global financial imbalances, and higher interest rates, particularly in the US. With substantial increases expected in non-OPEC supply during the year and with OPEC production already at much higher levels than current demand, it is clear we are fairly confident about the market outlook for the year. But, as we have seen, in particular, over the past two years, nothing can be taken for granted. This is why we are meeting today — to take a good hard look at the fundamentals and the likely challenges and pressure points for the year. We remain totally committed to market stability, with prices at reasonable and sustainable levels. We firmly recognise the importance of a stable, orderly oil market to world economic growth, long-term investment, and the advancement of global prosperity.

We are encouraged by some important developments that took place last year and these relate to the energy dialogues OPEC entered into with key markets. Since the last meeting of the Conference in December 2005 in Kuwait, my predecessor in office, HE Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, had visited the People’s Republic of China and Russia, in continuation of our efforts to consult at Ministerial level and dialogue with key stakeholders in the oil industry. The initiative will be relentlessly pursued in 2006, as we believe that it can play a big part in helping the industry meet the many challenges that lie ahead, in both the upstream and — increasingly — the downstream.

Excellencies, ladies and gentlemen,

Since we have much ground to cover today, we now proceed with the Meeting.

Thank you for your attention.