According to OPEC’s Secretary- General Mohammed Barkindo, for a potential OPEC agreement to limit crude oil production to help re-balance the market Russia, the world’s biggest energy producer, is “on board”.
Barkindo told reporters Monday at an energy conference in Abu Dhabi that cooperation from non-OPEC producers will help bring the oil market back into balance even as members of the Organization of Petroleum Exporting Countries remain committed to an agreement they reached in Algiers in September to trim output. In Vienna, where OPEC will convene for its bi-annual meeting, is the place where Russia is due to join the group for talks on the output controlling issue later this month.
“We as OPEC remain committed to the Algiers accord,” Barkindo said. “I have heard from the highest quarters in Moscow that Russia is on board.”
Producers from outside the group, such as Russia, are being attempted to be convinced to join the efforts to cut the production by OPEC, which pumps about 40 percent of the world’s oil. When the oil cartels’ members meet in Vienna on Nov. 30, the members of the organization want to put the changes into effect. Producer nations such as Russia, Azerbaijan, Brazil, Kazakhstan and Mexico were trying to be convinced by the group as it has held talks with them over the past weeks.
Eni SpA CEO Claudio Descalzi said in a Bloomberg TV interview from Abu Dhabi that producers from outside OPEC need to join the group in cutting output.
“OPEC alone is not enough,” he said.
Pumping at a post-Soviet record of 11.2 million barrels a day last month was Bottom of Form
Russia and it is the world’s largest energy producer. And output may climb further even as new fields ramping up production and more due to start producing before year-end. Russia was willing to freeze production for six months or more, rather than cut, and only if OPEC reached an agreement first, energy Minister Alexander Novak indicated.
As several OPEC states disputed production estimates that would determine the size of cuts by individual members of the group, crude has fallen subsequent to its rise as the Algiers accord helped push oil prices to a 15-month high above $50 a barrel. Benchmark Brent crude rose 0.9 percent to $45.98 a barrel at 2:43 p.m. in London.
A deal to secure the cooperation of other major suppliers after rounds of talks in Vienna has been prevented so far due to OPEC’s internal disagreements. The producers will meet again later this month in Vienna.
Author and energy consultant Daniel Yergin said in an interview at the conference that without a deal, OPEC will return to the policy of pumping without limits to secure sales.
He said that if there is to be agreement to limit production, OPEC members Iraq and Iran represent a “sticking point” that needs a resolution. Both countries have asked to be exempt from any production cuts.
“If there isn’t an agreement, it’s back to battle for market share.”
(Adapted from Bloomberg.com)