OPEC 160th Meeting concludes

No 6/2011
Vienna, Austria
14 Dec 2011

The 160th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) convened in Vienna, Austria, on 14 December 2011, under the Chairmanship of its President, HE Eng Rostam Ghasemi, Minister of Petroleum of the Islamic Republic of Iran and Head of its Delegation, and its Alternate President, HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and Head of its Delegation.

The Conference congratulated HE Eng Rostam Ghasemi on his appointment as Minister of Petroleum of the Islamic Republic of Iran and HE Eng Abdurahman Benyezza on his appointment as Minister of Oil and Gas of Libya.

The Conference elected HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and Head of its Delegation, as President of the Conference for one year, with effect from 1 January 2012, and HE Dr Mohammad Al-Busairi, Minister of Oil and State Minister of National Assembly Affairs of the State of Kuwait, as Alternate President, for the same period.

The Conference reviewed the Secretary General's report, the report of the Economic Commission Board, the report of the Ministerial Monitoring Sub-Committee - which met under the Chairmanship of HE Dr Mohammad Al-Busairi, Minister of Oil and State Minister of National Assembly Affairs of the State of Kuwait - and various administrative matters.  The Conference exchanged views on, inter alia, recent developments in multilateral environment matters and the outcome of the recent UN Climate Change Conference held in Durban, South Africa, as well as the status of the Organization's ongoing energy dialogue with the European Union.  The Conference applauded efforts being made by Member Countries' climate change negotiators to safeguard the interests of developing countries, in general, and oil-producing nations, in particular, and recorded its appreciation of the crucial work carried out by the Secretariat in relation to this very important topic.

The Conference reviewed recent oil market developments, as presented by the Secretary General, in particular supply/demand projections, as well as the outlook for 2012.  Ministers noted that the heightened price volatility witnessed during the course of the year 2011 is predominantly a reflection of increased levels of speculation in the commodities markets, exacerbated by geopolitical tensions, rather than a result of supply/demand fundamentals.  The Conference further observed that downside risks facing the global economy continue to include: the sovereign debt crisis in the Euro-zone; persistently high unemployment in the advanced economies; and inflation risk in the emerging economies.  Planned austerity measures, not only in the Eurozone but also in other OECD economies, are likely to contribute to lower economic growth in the coming year.

The Conference noted, further, that, although world oil demand is forecast to increase slightly during the year 2012, this rise is expected to be partially offset by a projected increase in non-OPEC supply.

In light of the foregoing and given the demand uncertainties, the Conference decided to maintain the current production level of 30.0 mb/d, including production from Libya, now and in the future.  The Conference also agreed that Member Countries would, if necessary, take steps (including voluntary downward adjustments of output) to ensure market balance and reasonable price levels.  In taking this decision, Member Countries confirmed their preparedness to swiftly respond to developments that might have a detrimental impact on orderly market developments.  Given the ongoing worrying economic downside risks, the Conference directed the Secretariat to continue its close monitoring of developments in supply and demand, as well as non-fundamental factors, such as macro-economic sentiment and speculative activity, keeping Member Countries abreast at all times.

As always, the Conference emphasized OPEC's statutory commitment to oil market stability through supplying petroleum to consumers at price levels that are not detrimental to the world economy, as well as consumers, but which, at the same time, do not create unsuitable investment conditions or undermine the ability of the industry to adjust to market changes.  Although the global outlook provides little security to producers and investors, future oil supply depends on ongoing and timely investments in capacity expansion.

The Conference appointed Mr Issa Shahin Al Ghanim, Qatari Governor for OPEC, as Chairman of the Board of Governors for the year 2012, and Dr Majid Al-Moneef, Saudi Arabian Governor for OPEC, as Alternate Chairman for the same period, with effect from 1 January 2012.

The Conference approved the Budget of the Organization for the year 2012.

The Conference decided that its next Ordinary Meeting will convene in Vienna, Austria, on 14 June 2012, immediately following the OPEC International Seminar on "Petroleum: Fuelling Prosperity, Supporting Sustainability" that is to take place at the Hofburg Palace, Vienna, Austria, on 13 and 14 June 2012.

Finally, the Conference recorded its continued gratitude to the Government and people of the Republic of Austria, as well as the authorities of the City of Vienna, for their warm hospitality and the excellent arrangements made for the Meeting.