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06 Jun 2020

Opening address to the 179th Meeting of the OPEC Conference

Delivered by HE Mohamed Arkab, Algeria’s Minister of Energy and President of the OPEC Conference 2020, at the 179th Meeting of the OPEC Conference, 6 June 2020, via videoconference.

Your Royal Highness,

Excellencies, distinguished delegates,

Good afternoon.

In the name of Algeria and on behalf of the Heads of Delegation and the OPEC Secretariat, it is my pleasure to welcome you all to the 179th Meeting of the OPEC Conference.

I would also like to take this opportunity to offer a very warm welcome to a number of Ministers who have assumed their position since the last OPEC Conference meeting, which took place on the 5th of March 2020: HE Dr. Ali Alawi, Minister of Finance and Acting Minister of Oil of Iraq and HE Tareck El Aissami, People's Minister of Petroleum of Venezuela.

On behalf of OPEC, we wish you every success in your highly demanding positions and look forward to working closely with you.

We would like to extend our sincere thanks for the tireless endeavours of your predecessors. HE Thamir Abbas al- Ghadhban of Iraq has been an energetic and committed champion of the ‘Declaration of Cooperation’ and tremendous advocate of OPEC. For many decades, he has been a committed public servant and skilled diplomat. HE Manuel Salvador Quevedo Fernandez, made an outstanding contribution to the ‘Declaration of Cooperation’ process, and helped shepherd through the ‘Charter of Cooperation’ in his capacity as President of the Conference last year.

We are truly grateful for their work and wish them every success for the future.

I would also like at the outset to express on behalf of Algeria and on behalf of the OPEC Conference, my thanks and gratitude to His Royal Highness Abdulaziz Bin Salman, Minister of Energy of Saudi Arabia, for his untiring efforts, dignified leadership and exemplary forward-looking attitude, to forge consensus, and to rally support for our cause. HRH took the initiative to advance the date of our meeting, for the benefit of all, and to postpone the meeting of the Joint Ministerial Monitoring Committee to a later date when all secondary sources data becomes available.  

We are grateful for that.

Excellencies, Ladies and Gentlemen,

We convene this Meeting with heavy hearts, for the entire OPEC Family is greatly saddened by the passing of our colleague and dear friend, Mr. Hossein Kazempour Ardebili, Governor for OPEC for IR Iran. Hossein Kazempour was a widely respected and accomplished representative of his country. Over many decades, he distinguished himself through his breadth of oil industry knowledge and his skilful navigation of complex negotiations. Above all, he conducted himself with great dignity and showed respect for all with whom he worked.

On behalf of the OPEC Conference, I would like to offer our sincere and heartfelt condolences to Mr. Kazempour’s family, the delegation of IR Iran and all who mourn his tragic passing. We will always honour his legacy.

I would ask you to join with me, as we stand to observe a minute’s silence to commemorate our dear friend.

[MINUTE’S SILENCE]

May he rest in peace.

Excellencies, Ladies and gentlemen,

This is the first time the OPEC Conference has ever held a meeting via videoconference  ̶  a vivid reminder of how far the global COVID-19 pandemic has altered almost every aspect of daily life. Our world has been transformed in a very short space of time, and much has transpired since the last meeting of the Conference.  

The impact of global lockdowns and closed borders ushered in an unprecedented economic contraction, oil demand destruction and extreme market volatility.  For the year 2020, world oil demand growth is forecast to drop by approximately 9.1 mb/d. The worst of the contraction is expected to take place in the second quarter and be particularly concentrated in the month of April. In the first half of 2020, stocks are expected to increase by a staggering 1.5 billion of barrels. This is unprecedented.

However, the month was not without its bright spots. The world witnessed a visible demonstration by a large group of major oil producing nations of their willingness to take concerted action in the interests of producers, consumers and the global economy.

At the 9th and 10th Extraordinary OPEC and non-OPEC Ministerial meetings, held on 9-10 and 12 April 2020, the Declaration of Cooperation  partners agreed to adjust downwards overall crude oil production by 9.7 mb/d in May and June 2020; by 7.7 mb/d from July 2020 to the end of December 2020; and by 5.8 mb/d from January 2021 to the end of April 2022

This is the largest ever production adjustment in the history of the oil industry. The adjustments have been agreed for two years. This is the longest ever period for agreed adjustments under the DoC.

Several producers outside of the DoC partners backed our efforts, including, Alberta (Canada), Argentina, Colombia, Ecuador, Egypt, Indonesia, Norway and Trinidad and Tobago, all of whom were observers at the 9th (Extraordinary) OPEC and non-OPEC Ministerial Meeting. The subsequent G20 Extraordinary Energy Ministers Meeting on 10 April 2020, which included other major producers  recognized these efforts to support market stabilization.

Since the production adjustments became operational on 1 May, several participating countries have made detailed announcements about how they plan to fulfil their commitments. Additional adjustments announced by Saudi Arabia, Kuwait, the UAE and Oman, amounted to 1.2 mb/d for the month of June. This is extremely constructive.

These adjustments have provided much needed relief to the market, and we have seen something of a tentative recovery. The outlook for both supply and demand have improved in the last few weeks. In addition to high conformity rates with the voluntary production adjustments, production has been shut-in elsewhere, and demand has picked up globally, as economic activity slowly returns to some form of normalcy. 

Despite the progress achieved to date, we cannot afford to rest on our laurels. We need to carefully review market conditions and decide on the best way forward. The challenges that we face remain daunting. Perseverance in our efforts is a must.

Ladies and gentlemen,

Sixty years and one hundred and seven eight meetings after the first meeting of the OPEC Conference took place in 1960, there have been many twists and turns in the Organization’s history, a journey which we will commemorate in September during the 60 Year Anniversary celebrations.  

Despite the many changes for the industry and the world over these six decades, one thing has remained constant: the Organization’s abiding commitment to both oil market stability and the principle of fraternity among nations that lies at the heart of the international community. I can think of no greater tribute to our late friend, Hossein Kazempour, than allowing those timeless values to guide our work today.

May our Organization always act responsibly; work cohesively; and never waver from the inspiring vision on which it was founded.

Thank you for your attention.