- Title: OPEC, non-OPEC agree first global oil pact since 2001
- Date: 10th December 2016
- Summary: VIENNA, AUSTRIA (DECEMBER 10, 2016) (REUTERS) OPEC HEADQUARTERS BUILDING GROUP OF POLICEMEN STANDING IN FRONT OF BUILDING OPEC BUILDING ENTRANCE WITH REPORTERS STANDING IN LINE AND INSCRIPTION ABOVE ENTRANCE READING (English): "ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES" VARIOUS OF DELEGATES IN CONFERENCE ROOM OPEC PRESIDENT AND QATAR'S ENERGY MINISTER, MOHAMMED BIN SALEH AL-SADA, SPEAKING CONFERENCE ROOM WITH DELEGATES SEATED RUSSIA'S ENERGY MINISTER, ALEXANDER NOVAK, SADA, AND SAUDI ARABIA'S ENERGY MINISTER, KHALID AL-FALIH, IN NEWS CONFERENCE JOURNALISTS (SOUNDBITE) (English) OPEC PRESIDENT AND QATAR'S ENERGY MINISTER, MOHAMMED BIN SALEH AL-SADA, SAYING: "Our agreement has really stemmed from the sense of responsibility towards the balancing of the market which will lead to positive results not only for producers and exporters but also to consumers, and to the healthy economy we all require to the world." NOVAK, SADA, AND FALIH IN NEWS CONFERENCE (SOUNDBITE) (English) OPEC PRESIDENT AND QATAR'S ENERGY MINISTER, MOHAMMED BIN SALEH AL-SADA, SAYING: "The non-OPEC countries participating today, they committed to approximately 560 - to be exact, 558 - thousand barrels [per day]." JOURNALISTS (SOUNDBITE) (Russian) RUSSIA'S ENERGY MINISTER ALEXANDER NOVAK, SAYING: "In order to monitor the progress of the deal, and to recommend the members the following actions to take, there will be a monitoring committee created which would consist of five countries - three coming from OPEC and two non-OPEC." NOVAK, SADA, AND FALIH AT NEWS CONFERENCE (SOUNDBITE) (Russian) RUSSIA'S ENERGY MINISTER ALEXANDER NOVAK, SAYING: "We believe that today's agreement would speed up the re-balancing in the market, which is happening as we speak, it would help stabilise the oil markets, reduce volatility and speculation and improve the investment attractiveness of the oil industry globally." JOURNALISTS NOVAK, SADA, AND FALIH AT NEWS CONFERENCE (SOUNDBITE) (English) SAUDI ARABIA'S ENERGY MINISTER KHALID AL-FALIH, SAYING: "Saudi Arabia is well known, we don't load a single cargo unless it has been requested by a customer based on a pre-announced price based on a long-term contract. So what we are going to be loading in January is based on nominations that we received a few days ago, and allocations that we made two days ago as I mentioned. And as we go forward, we will always keep that ceiling, but there is no guarantee that we will not go below the ceiling as a result of market fluctuations. But we will not go above that ceiling for as long as we are party to this agreement which runs for six months." DELEGATES IN AUDIENCE NOVAK, SADA, AND FALIH LEAVING
- Embargoed: 25th December 2016 21:16
- Keywords: OPEC oil global oil pact
- Location: VIENNA, AUSTRIA
- City: VIENNA, AUSTRIA
- Country: Austria
- Reuters ID: LVA0015CAW4EF
- Aspect Ratio: 16:9
- Story Text: OPEC and non-OPEC producers on Saturday (December 10) reached their first deal since 2001 to jointly curtail oil output and ease a global glut after more than two years of low prices that overstretched many budgets and spurred unrest in some countries.
With the deal finally signed after almost a year of arguing within the Organization of the Petroleum Exporting Countries and mistrust in the willingness of non-OPEC Russia to play ball, the market's focus will now switch to compliance with the agreement.
Russia, which 15 years ago failed to deliver on promises to cut in tandem with OPEC, is expected to perform real output reductions this time.
"Our agreement has really stemmed from the sense of responsibility towards the balancing of the market which will lead to positive results not only for producers and exporters but also to consumers, and to the healthy economy we all require to the world," OPEC President and Qatar's Energy Minister, Mohammed bin Saleh al-Sada, told reporters.
On Saturday, producers from outside the 13-country group agreed to reduce output by 558,000 barrels per day, short of the initial target of 600,000 but still the largest contribution by non-OPEC ever.
"In order to monitor the progress of the deal, and to recommend the members the following actions to take, there will be a monitoring committee created which would consist of five countries - three coming from OPEC and two non-OPEC," Russian Energy Minister Alexander Novak told the news conference.
"We believe that today's agreement would speed up the re-balancing in the market, which is happening as we speak, it would help stabilise the oil markets, reduce volatility and speculation and improve the investment attractiveness of the oil industry globally," Novak added.
Last week, OPEC agreed to slash output by 1.2 million barrels per day from January 1, with top exporter Saudi Arabia cutting as much as 486,000 barrels per day. Saudi Arabia's energy minister Khalid al-Falih said on Saturday that Riyadh may decide to cut even deeper.
"Saudi Arabia is well known, we don't load a single cargo unless it has been requested by a customer based on a pre-announced price based on a long-term contract. So what we are going to be loading in January is based on nominations that we received a few days ago, and allocations that we made two days ago as I mentioned. And as we go forward, we will always keep that ceiling, but there is no guarantee that we will not go below the ceiling as a result of market fluctuations. But we will not go above that ceiling for as long as we are party to this agreement which runs for six months," Falih said.
The agreed non-OPEC output reduction includes Russia's cut of 300,000 barrels per day, Novak said. He added it would be gradual and by the end of March 2017 Russia would be producing 200,000 barrels per day less than its October 2016 level of 11.247 million barrels - Russia's highest production estimate so far.
Oil prices have more than halved in the past two years after Saudi Arabia raised output steeply in an attempt to drive higher-cost producers such as U.S. shale firms out of the market.
The plunge in oil to below $50 per barrel - and sometimes even below $30 - from as high as $115 in mid-2014 has helped reduce growth in U.S. shale output.
But it also hit the revenues of oil-dependent economies including Saudi Arabia and Russia, prompting the two largest exporters of crude to start their first oil cooperation talks in 15 years.
Apart from Russia, the talks on Saturday were attended by or had comments or commitments sent from non-OPEC members Azerbaijan, Bahrain, Bolivia, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan and South Sudan.
Novak said OPEC and the non-OPEC countries at the meeting were responsible for 55 percent of global output, and that their joint reduction of around 1.8 million barrels per day would account for about 2 percent of the global oil supply. - Copyright Holder: REUTERS
- Copyright Notice: (c) Copyright Thomson Reuters 2016. Open For Restrictions - http://about.reuters.com/fulllegal.asp
- Usage Terms/Restrictions: None
