OPEC : This was a very constructive, very good meeting

This was a very constructive, very good meeting

OPEC Bulletin Commentary July-August 2011

The immediate build-up to the meeting may not have been an easy one. But its outcome was a reaffirmation of the commitment of the participants to sound, constructive dialogue.

This was the general verdict on the Eighth Ministerial Meeting of the EU-OPEC Energy Dialogue, held in Vienna on June 27.

The sudden announcement made by the International Energy Agency just four days before - to release 60 million barrels of oil to the international oil market in the coming month from its members' emergency stocks - was still fresh in everyone's minds as the meeting began. Indeed, this was the first formal meeting between leading representatives of each group since the announcement, in the context of about two-thirds of the EU's members also being IEA members. For its part, the EU drew attention to OPEC's not reaching a production agreement at its 159th Conference on June 8.

All this was set against the backdrop of a difficult first half of the year for the oil market, which had seen a general upward surge in prices amid excessive volatility and speculation, despite supply and demand fundamentals remaining sound throughout.

Overall, this has so far been a difficult year for the energy industry, which has been affected by a rise in political tensions in some key producing regions, some acute natural disasters, particularly the epoch-changing events in Japan, and continued economic doubt and turmoil, especially with regard to the industrialised world's emergence from global recession and its return to sustained recovery.

"We now have the unique opportunity to show that our dialogue has the capability to face those challenges as partners, joined by mutual respect and trust," the European Commissioner for Energy, Günther Oettinger, told the meeting.

While the two delegations clarified their views about the present situation and their recent actions, they were at the same time intent on developing and strengthening the energy dialogue, which has already achieved much success since its establishment in 2005. The energy dialogue has already examined such key topical issues as the effects of the global financial crisis on the oil sector, the impact of financial markets on oil price volatility, energy policies, biofuels and their impact on the refining sector, and energy technologies, including carbon capture and storage. Moreover, the benefits have been felt not just by the EU and OPEC, but also by the global energy community as a whole.

As OPEC Secretary General, Abdalla Salem El-Badri, pointed out to the meeting, "the EU-OPEC Dialogue is a prime example of constructive cooperation on energy between groups of countries."

He continued: "Both OPEC and the EU have learned much about each other since our dialogue began back in 2005. Its development has allowed us to better understand our energy challenges, identify areas of common ground, discuss our respective viewpoints, develop areas of mutual interest and expand our contacts across various levels of our organizations." He stressed that it was "essential we continue to build on what we have achieved."

Accordingly, this year's Ministerial Meeting continued to deliver the goods. The parties agreed to hold a workshop on technological advances in the road transportation sector, to complete preparations for a joint Energy Technology Centre and to hold a roundtable on oil and gas exploration and production activities.

Looking further into the future, Oettinger told the press conference afterwards that he had invited OPEC to take part as an expert in the EU process to develop a long-term energy road map to 2050, mainly for the decades 2020-30.

With these achievements in place, perhaps the President of the EU Energy Council, Tamás Fellegi, also Hungary's Minister for National Development, best summed up proceedings when he said afterwards: "This was a very constructive, very good meeting."

OPEC Bulletin July-August 2011

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