OPEC 167th Meeting concludes

No 3/2015
Vienna, Austria
05 Jun 2015

The 167th Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) was held in Vienna, Austria, on Friday, 5th June 2015 under the Chairmanship of its Alternate President, HE Dr. Mohammed Bin Saleh Al Sada, Minister of Energy and Industry of Qatar and Head of its Delegation.

The Conference congratulated HE Dr. Salah Khebri on his appointment as Algeria’s Minister of Energy and HE Asdrúbal Chávez as the People’s Minister of Petroleum and Mining of Venezuela, and thanked their predecessors in office, HE Dr. Youcef Yousfi and HE Rafael Ramirez, for their dedicated and valuable contribution to the work of the Organization.

A welcome was also extended to Dr. Jamila Shu’ara, Permanent Secretary of Nigeria’s Ministry of Special Duties and Inter-Governmental Affairs, who was heading Nigeria’s Delegation for this Conference by appointment of Nigeria’s newly inaugurated President, HE Muhammadu Buhari, Head of State and Commander-in-Chief of the Armed Forces.

The Conference considered the Secretary General’s report and the report of the Economic Commission Board. It also exchanged views on other issues, in particular, preparations for the COP21/CMP 11 in Paris; the status of the UN post-2015 development agenda; the Organization’s ongoing cooperation with the International Energy Forum and the International Energy Agency; the ongoing collaboration with various international organizations within the G-20; as well as OPEC’s ongoing energy dialogue with the European Union, the Russian Federation, and others.

Agreeing on the importance of maintaining dialogue with other oil-producing countries, the Conference affirmed the technical meeting of oil and economic experts from both OPEC and Non-OPEC countries, held on 12th May 2015, in Vienna. The meeting had discussed, inter alia, oil market fundamentals and the global economy, with participants concluding that market stability remains a common objective for all producers, attainable through cooperative effort. Participants agreed to convene again before the end of the year.

The Conference reviewed the oil market outlook, as presented by the Secretary General, in particular the demand and supply projections, and the outlook for the second half of 2015. The Conference noted that the global economic recovery had stabilized, albeit with growth at moderate levels. In the current year, GDP growth is projected at 3.3%, with this expected to be at a slightly higher level of 3.5% for 2016.

Recording its continued concern over market volatility and the challenges faced by the global oil industry as a whole, the Conference observed, further, that the sharp decline in oil prices witnessed at the end of last year and the start of this year – caused by oversupply and speculation – had now abated, with prices moving slightly higher in recent months.

The Conference noted that world oil demand is forecast to increase in the second half of 2015 and in 2016, with growth driven by non-OECD countries. On the supply side, non-OPEC growth in 2015 is expected to be just below 700,000 barrels per day, which is only around one-third of the growth witnessed in 2014.

The Conference also observed the recent build in stocks and the surplus of oil in both OECD and non-OECD countries, which has resulted in stock levels that lie well above the five-year average in terms of absolute volumes, indicating that the market is comfortably supplied.

In view of the foregoing, the Conference resolved to maintain the 30 mb/d ceiling and urged Member Countries to adhere to it.  Member Countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers. Nonetheless, the Conference stressed that, given the current market uncertainties, the Secretariat should continue to closely monitor developments in the coming months.

The Conference was briefed by the Head of Delegation of Ecuador on the ongoing arbitration process brought against the Republic of Ecuador by Chevron Corporation and Texaco Petroleum Company. The Conference expressed its support to the Republic of Ecuador in the exercise of its sovereign rights over its natural resources, in accordance with international law, a right documented in the Algiers, Caracas and Riyadh Summit Declarations of OPEC Heads of State and Government. Furthermore, the Conference called for amicable negotiations and a good faith resolution for the dispute, within a framework of utmost respect for the sovereignty of the Republic of Ecuador, and without resorting to ex parte pre-judgement measures that would make impartial solutions more difficult.

The Conference appointed Eng. Iván Orellana, Venezuelan Governor for OPEC, as Chairman of the Board of Governors until 31st December 2015, and Eng. Mohamed Hamel, Algerian Governor for OPEC, as Alternate Chairman for the same period.

The Conference decided that its next Ordinary Meeting will convene on Friday, 4th December, 2015, in Vienna, Austria.

Finally, the Conference again expressed its appreciation to the Government and to the 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 Conference Meeting and for the 6th OPEC International Seminar.