OPEC 162nd Meeting concludes

No 6/2012
Vienna, Austria
12 Dec 2012

The 162nd Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna, Austria, on Wednesday, 12 December 2012, under the Chairmanship of its President, HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and Head of its Delegation.

The Conference congratulated HE Dr Abdel Bari Ali Al-Arousi on his appointment as Minister of Oil and Gas of Libya, and thanked his predecessor in office, HE Eng Abdurahman Benyezza, for his contribution to the work of the Organization.

The Conference elected HE Hani Abdulaziz Hussain, Minister of Oil of the State of Kuwait, as President of the Conference for one year, with effect from 1 January 2013, and HE Dr Abdel Bari Ali Al-Arousi, Minister of Oil and Gas of Libya and Head of its Delegation, as Alternate President, for the same period.

The Conference reviewed the Secretary General's report, the report of the Economic Commission Board (ECB), the report of the Ministerial Monitoring Sub-Committee (MMSC) – whose Members the Conference again commended for their continued and appreciated efforts on behalf of the Organization – and various administrative matters. The Conference exchanged views on, inter alia: developments in multilateral environment matters, including the outcome of COP18/CMP8 held in Doha, Qatar, earlier this month; the status of the Organization’s ongoing energy dialogue with the European Union (EU); its continued cooperative work for the G-20; and its dialogue with the Russian Federation. The Conference congratulated the Government and people of Qatar on the successful hosting of COP18/CMP8, noting with satisfaction that the event’s positive conclusion paved the way for a new course of action for designing the future climate change regime. In this connection, Ministers applauded the work being done in this important area by climate change negotiators from around the world.

The Conference reviewed the oil market outlook, as presented by the Secretary General, in particular the supply/demand projections for 2013.  Ministers noted that the price volatility witnessed throughout 2012 remained mostly a reflection of increased levels of speculation in the commodities markets, exacerbated by geopolitical tensions and, latterly, exceptional weather conditions. The Conference observed: the mounting pessimism over the global economic outlook, with downside risks continuing to be presented by the sovereign debt crisis in the Euro-zone; high unemployment in the advanced economies, especially the Euro-zone; and inflation risk in the emerging economies. Indeed, the biggest challenge facing global oil markets in 2013 is uncertainty surrounding the global economy, with the fragility of the Euro-zone remaining a major concern. The Conference further noted that, although world oil demand is forecast to increase slightly during the year 2013, this is likely to be more than offset by the projected increase in non-OPEC supply and that projected demand for OPEC crude in 2013 is expected to contract to 29.7 mb/d.

Given the demand uncertainties, the Conference decided to maintain the current production level of 30.0 mb/d. The Conference also agreed that Member Countries would, if necessary, take steps to ensure market balance and reasonable price levels for producers and consumers.  In taking this decision, Member Countries confirmed that they will swiftly respond to developments that might have a detrimental impact on an orderly oil market. 

Since it is vital to remain vigilant in the face of the uncertainty surrounding the outlook for the world’s major economies, as well as the implications of the enduring weaknesses in the international financial system that are expected to continue to pose downside risks for both the global economy and the oil market, the Conference directed the Secretariat to maintain its close monitoring of developments in supply and demand, as well as non-fundamental factors, such as macroeconomic sentiment and speculative activity, keeping Member Countries abreast of developments at all times.

The Conference decided to extend the tenure of HE Abdalla Salem El-Badri as Secretary General for a period of one year, with effect from 1 January 2013.

The Conference appointed Mr Yasser M. Mufti, Saudi Arabian Governor for OPEC, as Chairman of the Board of Governors for the year 2013, and Dr Ali Obaid Al Yabhouni, the United Arab Emirates’ Governor for OPEC, as Alternate Chairman for the same period, with effect from 1 January 2013.

The Conference approved the Budget of the Organization for the year 2013.

The Conference decided that its next Ordinary Meeting will convene in Vienna, Austria, on 31 May 2013.

Finally, the Conference renewed its expression of appreciation 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.