Opening Speech By HE Dr. Mohammed Bin Saleh Al-Sada, Qatar’s Minister of Energy and Industry and Alternate President of the OPEC Conference
Excellencies, ladies and gentlemen,
Let me begin by welcoming you all to Vienna for the 167th Meeting of the OPEC Conference.
I would like to extend special welcomes to His Excellency Dr. Salah Khebri, Algeria’s Minister of Energy, and His Excellency Mr. Asdrúbal Chávez, the People’s Minister of Petroleum and Mining of Venezuela, who are attending a Meeting of the OPEC Conference for the first time as Heads of their country’s respective Delegations.
On behalf of all the Heads of Delegation and the OPEC Secretariat, I would also like to thank their predecessors in office – His Excellency Mr. Rafael Ramirez of Venezuela and His Excellency Dr. Youcef Yousfi from Algeria. Both provided dedicated and loyal service to their countries, as well as valuable contributions to the work of the Organization. We wish them every success in their future endeavours.
In addition, I would also like to extend a warm welcome to Dr. Jamila Shu’ara, Permanent Secretary at Nigeria’s Ministry of Special Duties and Inter-Governmental Affairs, who has been appointed as her country’s Head of Delegation for this Conference.
Excellencies, ladies and gentlemen,
Since the last Meeting of the Conference in late November of last year, we have witnessed much volatility in the global oil industry.
Prices fell from around $77 per barrel at the time of the Meeting to around $45 by mid-January, although they have recovered since.
It should be stressed that we do not believe that actual market fundamentals warranted the almost 60 per cent fall in prices that the market witnessed between June 2014 and January 2015. It is evident that speculators played some role in this fall.
The market has continued to see oversupply, and additionally, crude stocks have witnessed a significant build. US commercial crude oil stocks in April 2015 were 24 per cent higher than the same time last year, although they have fallen back a little in recent weeks.
As a result of the downward price trend, a number of projects have been cancelled or put on hold, and investment plans have been revised. Rig counts have fallen dramatically, and many industry workers have been laid off.
The current environment is clearly challenging – and has become a test for both oil producers and hydrocarbon investors.
At OPEC, we continue to monitor the situation, and are looking at ways and means to address the challenges ahead. And for 2015, we are focused on how we see the market evolving – particularly over the second half of the year.
The global economic environment shows some encouraging signs, although the outlook is patchy. Global growth for 2015 is forecast at 3.3 per cent, the same level as in 2014.
World oil demand in 2015 is forecast to grow by around 1.2 million barrels per day, higher than the figure of 1 million barrels per day in 2014. The majority of this net oil demand growth will continue to be seen in non-OECD countries.
In terms of oil supply, non-OPEC countries will see much lower levels of production growth in 2015 than in previous years. In fact, expected non-OPEC supply growth this year is just below 700,000 barrels per day, which is only around one-third of the growth witnessed in 2014. In North America, US tight oil and Canadian oil sands are anticipated to see lower growth following recent strong declines in rig counts.
All this points to a more balanced market in the second half of 2015, with current estimates for OPEC crude demand at 30.3 million barrels per day in the third quarter, and 30.7 million barrels per day in the fourth quarter.
Of course, stability will be of paramount importance for the industry in the years ahead, given the need for investments in capacity expansion to make sure the world has enough supply to meet expected future demand.
Excellencies, ladies and gentlemen,
At today’s meeting, OPEC will discuss developments that have taken place over the last six months, and consider the market outlook for the remainder of 2015.
As always, OPEC’s focus will be on enhancing market stability in the interests of all parties and in support of steady global economic growth. However, we should remember that this is not the responsibility of OPEC alone. If we all wish to benefit from a more orderly oil market, then we should all be prepared to contribute to its stability. In support of this, dialogue and cooperation are essential.
It has been encouraging to see more of this take place among OPEC and non-OPEC countries in 2015. This includes a technical meeting between OPEC and non-OPEC countries that took place at the OPEC Secretariat last month.
These developments can only be beneficial. We at OPEC are always willing to talk to other energy stakeholders. And we hope these recent advancements continue.
OPEC also remains committed to participating in other international dialogue and cooperation efforts, and engaging further with other stakeholders.
It is essential for everyone to seek to enhance cooperation efforts in the interest of attaining and ensuring stability in the oil market. This will help us all to better deal with the change and uncertainty that cyclical events in our industry bring. And it will also help us to facilitate and support the development of some of the vast project opportunities that we can expect from the industry in the years and decades ahead.
Thank you for your attention.
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.
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