The participants from OPEC were: Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, Minister of Energy of Kuwait and President of the OPEC Conference; Dr Edmund Maduabebe Daukoru, Minister of State for Petroleum of Nigeria and Alternate President of the OPEC Conference; and Dr Adnan Shihab-Eldin, Acting for the OPEC Secretary General.

The participants from the EU were: Mr Malcolm Wicks, Minister for Energy of the United Kingdom and President of the EU Council; Dr Martin Bartenstein, Minister of Economy and Labour of Austria; and Mr Andris Piebalgs, European Commissioner for Energy.

The participants reflected upon the good progress made with the EU-OPEC Energy Dialogue following the first meeting held at a ministerial level in Brussels on 9th June, including the first joint roundtable in Vienna on 21st November when recent oil market developments and future prospects were addressed.

It is recalled that this Dialogue is seen by the EU as part of a broader approach to strengthen energy relationships with the main oil and gas suppliers, and by OPEC as a significant further step in its continued efforts to enhance understanding and cooperation among oil producers and consumers. They emphasized once again the importance of maintaining the dialogue when prices are low, as well as high. Both sides recognise the importance of an effective framework enabling an exchange of views on energy issues of common interest, and the potential this has for contributing to stability, transparency and predictability in the international oil market.

Participants at today’s meeting reviewed the report from the first joint roundtable on oil market developments, welcoming the constructive nature of the exchange of views and information, and discussions, and recognising two identified areas of mutual interest for further reflection, namely the refining sector and financial markets. In this connection, they recommended that a study on refining could be undertaken and that a workshop on the financial markets, with broad participation, could be organised, following further preparatory research work.

The participants, while expressing concern about continued oil market volatility, welcomed the moderation in oil prices in recent weeks. They acknowledged the positive impacts of OPEC’s actions to raise output as well as to implement costly investment plans to accelerate the expansion of crude production capacity. They reiterated the importance of market stability and reasonable prices for both producers and consumers, for world economy at large, and especially the economies of the developing countries. In this connection they recognized that extreme prices, in either direction, over a sustained period are potentially damaging and, therefore, not desirable. The participants confirmed not only the importance of mobilizing investments both in the upstream and downstream, and ensuring adequate spare capacity and stocks, but also the need to reduce the uncertainties associated with the level of future oil demand.

Publication by OPEC and other producers of information about their investment plans in upstream and downstream was welcomed as a further means of contributing to market stability, as would greater clarity in the demand outlook. They also acknowledged that actions on the part of both the EU, through the strong support for the emergency oil stocks release within the IEA mechanism, and OPEC, by making available to the market its spare capacity of around 2mb/d for a period of three months as of first October, should it be called for, amongst others, had helped calm markets after the devastation caused by Hurricanes Katrina and Rita in the United States of America. They recognized, however, that the serious tightness in the global refinery system would continue to strain market stability in the next few years, which calls for more efforts to create an environment that promotes downstream investments in major consuming countries and regions.

The Energy Dialogue’s work programme for 2006 was discussed, in particular the preparations for meeting on energy technologies, with focus on carbon capture and storage in conjunction with enhanced oil recovery, as well as a second roundtable on the impact of energy policies on both demand and supply. In order to enhance cooperation on technology, the participants also explored the possibility of establishing an EU-OPEC technology centre. They also took note of the efforts being made to develop the Commission’s internal energy market observation system and, in this connection agreed to explore cooperation possibilities.

They welcomed an important advance in the producer-consumer dialogue — the formal inauguration of the International Energy Forum’s Secretariat in Riyadh, Saudi Arabia, and the official launching of the Joint Oil Data Initiative (JODI) database, to which both OPEC and the EU have contributed. OPEC and Eurostat of the European Commission are two of the six international organisations behind the development of the JODI database.

The third meeting of the Energy Dialogue will be held in June 2006 in Brussels, with a view to following a cycle of yearly meetings at ministerial level.