C o m m e n t a r y
A partnership of common interests
Albert Einstein once wrote: “Nothing truly valuable can be
achieved except by the unselfish cooperation of many individu-
als.” This powerful truism has been evidently fundamental to
the success of the joint endeavours of 24 OPEC and non-OPEC
producers over the course of 2017, for at the core of the historic
‘Declaration of Cooperation’ is an age-old, yet profoundly effec-
tive problem-solving mechanism: partnership.
The way a partnership works as a whole determines its suc-
cess. There may be partnerships formed with great individuals;
but if they do not work with common interests and goals in mind,
then the partnership is not likely to achieve success. In contrast,
the first year of the ‘Declaration of Cooperation’ reflects the unity
and focus required to deliver a successful partnership.
TheDeclaration has beenbuilt on the back of the key elements
that have helped evolve all successful partnerships: trust, mutual
respect, honesty, transparency, a shared vision, and clear objec-
tives. It has been a collaborative and committed global partner-
ship between oil producing nations to help return balance and
sustainable stability to the oil market.
This was evidently brought to the fore at the 173
the OPEC Conference and the 3
OPEC and non-OPEC Meeting,
both held in Vienna on November 30, 2017. The two back-to-
back meetings — with around 200 delegates who were joined by
over 250 journalists and analysts — saw participants discuss the
progress made in the ‘Declaration of Cooperation’, the global oil
market outlook for 2018, and the report and recommendations
made by the Joint Ministerial Monitoring Committee (JMMC) from
the previous day.
Delegates specifically recognized the importance of the deci-
sions taken at the 172
OPEC Conference and the 2
non-OPEC Meeting, both held on May 25, 2017, to extend the
‘Declaration of Cooperation’ for a further period of nine months
to the end of March 2018. The market trajectory and sentiment
witnessed in the period since has shown that the extension de-
cision was right and timely, despite the initial market response.
This has been evidently vindicated by the fact that the rebalanc-
ing trend has quickened since May 2017. There has been an ac-
celeration in the reduction of the stock overhang, driven by the
unprecedentedhigh conformity levels to the voluntary production
adjustments; global economic growth is healthy; and oil demand
growth has been on the rise, for both 2017 and 2018.
All industry stakeholders are benefitting from improvingmar-
ket fundamentals, and optimismhas replaced the pessimism that
has been prevalent in the industry for far too long.
There are clearly many encouraging signs. But it was also
noted by many ministers at the meetings that the market rebal-
ancing cannot be taken for granted.
This was noted by Khalid A Al-Falih, President of the OPEC
Conference, and Minister of Energy, Industry and Mineral
Resources of the Kingdom of Saudi Arabia, in his opening re-
marks to the 173
Meeting of the Conference. “History tells us
that as we get closer to the goal, commitment can start to waiver.
So, to achieve our goals on a sustainable basis, we must stay the
course, with each Member Country taking full responsibility for
its own contributions and not relying on others. That is the only
way to succeed.”
The emphasis is on remaining vigilant and steadfast, which
was evident in the outcome of the two November 2017 meetings,
with the ‘Declaration of Cooperation’ amended to take effect for
the whole year of 2018 from January to December. In addition,
there was a pledge for full and timely conformity of OPEC and
participating non-OPEC countries in accordance with the volun-
tary production adjustments.
The decisionwas a clear vindication that not only is this OPEC
and non-OPEC partnership holding together and producing re-
sults: it is flourishing. The ‘Declaration of Cooperation’ has all
the elements in place to further evolve into an essential feature
of the consensus building required to rebalance and stabilize the
global oil market.
It was also further cemented by the participation at the 3
OPEC and non-OPEC Meeting of an additional six non-OPEC pro-
ducing countries—Chad, Congo, Egypt, Turkmenistan, Ugandaand
Uzbekistan — and their public declarations of support. Together,
30 oil producing countries — the largest partnership of its kind
— reaffirmed their commitment to restoring stability to the oil
market on a sustainable basis, in the interests of producers, con-
sumers and the global economy.
Moreover, there is also a focus on institutionalizing this frame-
work that builds on this unparalleled global platform of stability,
going beyond the short-term to look at the broader challenges
and opportunities the oil industry will face in the years and dec-
ades to come. It is vital to remember that the short-, medium-
and long-terms are all interlinked. All are equally important and
none can be viewed in isolation.
As the great Henry Ford once said: “Coming together is a be-
ginning; keeping together is progress; working together is suc-
cess.” It is vital to ensure that the ‘Declaration of Cooperation’,
which remains open to other producers, is a partnership that
works for everyone, across all timeframes, to help deliver the
sustainable market stability we all desire.