OPEC REMAIN PRUDENT
OPEC - Vienna, Austria - 01 Dec 2021 - Opening address to the 182nd Meeting of the OPEC Conference
Delivered by HE Dr Diamantino Pedro Azevedo, Angola’s Minister of Mineral Resources and Petroleum and President of the OPEC Conference, at the 182nd Meeting of the OPEC Conference, 1 December 2021, via videoconference.
Your Royal Highness, esteemed colleagues,
It gives me great pleasure to welcome you to the 182nd Meeting of the OPEC Conference.
Let me begin by thanking the OPEC Secretariat for the consistent quality and timeliness of the research, analysis and other services they provide to our Member Countries, and for the outstanding technical support that makes our meetings possible.
We are aware that Austria is experiencing a serious new wave of COVID-19, with lockdown measures in place, and we wish the Secretariat Staff and their families safety and good health during these very challenging times.
The Secretariat has remained operational throughout multiple lockdowns over the past 20 months and has never missed a beat in supporting our Member Countries, and many other important stakeholders, with excellent reports and industry-leading publications.
Five years ago, the 171st Meeting of this Conference gave its unanimous support to joining with ten non-OPEC oil-producing countries in the Declaration of Cooperation – one of the boldest experiments in the 150-year history of oil.
The Declaration was the crowning achievement of efforts that began in September 2016 with the ‘Algiers Accord’ to develop a framework for consultations with leading non-OPEC producers. This visionary decision was followed two months later by the ‘Vienna Agreement’, which in turn paved the way for the signing of the Declaration of Cooperation in Vienna on December 10, 2016. This series of events marked a new chapter in the history of the oil industry.
Not all of us were present at these meetings. But all of us here today are witnesses to the astonishing success of this unique framework. Together, we set in motion two of the industry’s greatest market stabilization efforts, first to address the supply-driven downturn in 2015 and 2016, and then the demand crash at the onset of the COVID-19 pandemic – a downturn with no precedent in modern times.
Over the past 20 months, this trusted and proven relationship has worked without pause to stimulate and accelerate market stability and balance … and to support the global economy through lockdowns, ups and downs, and long periods of uncertainty.
Today, the COVID-19 pandemic remains a persistent foe which continues to spook the markets. The sudden appearance of a potentially new and more dangerous variant comes on top of new lockdowns in parts of Europe aimed at reversing a dramatic infection surge, especially in unvaccinated populations.
On another front, the planned release of oil from a number of strategic reserves reinforces to the necessity of diligent market monitoring to avoid a return to market imbalance. And we need to pay close attention to downside risks associated with inflation spikes, rising debt levels and supply-chain disruptions.
In these uncertain times, it is imperative that we – together with the non-OPEC countries in the DoC – remain prudent in our approach and prepared to be proactive as market conditions warrant.
We need to remain united, focused and ready to adapt to any changing market dynamics, as we have always done in the five-year history of the DoC, to ensure market balance, a sustainable stability, and to support growth and investments in the months and years ahead.
When OPEC reached out to non-OPEC in 2016, we were told it was an exercise in futility. This was proven wrong, not just once, but time and time again, to the benefit of producers, consumers and the global economy.
The five-year anniversary is one we should all applaud, thanking the OPEC Secretariat, the JTC, the JMMC, all Participating Countries, and each and every individual that has contributed to our success over the past half a decade.
The crucial role we have played in the recovery process is indeed reflected in the Economic Commission Board’s latest assessment, which expects global economic growth of around 5.6% this year and 4.2% in 2022. Our think-tank sees oil demand growing by around 5.7 mb/d in 2021 and a further 4.2 mb/d in 2022, which puts us on track to exceed levels not seen since early 2020.
Throughout all our efforts, we have benefited enormously from the leadership of HRH Prince Abdul Aziz Bin Salman as Chair of both the OPEC and non-OPEC Ministerial Meetings and the Joint Ministerial Monitoring Committee. With Alexander Novak, Deputy Prime Minister of the Russian Federation, as co-Chair, they have kept us moving in the direction of recovery and stability.
Today, we have the opportunity to consider the updated OPEC Long-Term Strategy. This timely document sets OPEC’s priorities and directions to help achieve the visionary aims set out by the Founder Members in 1960. It is important to remember here that since its founding, our Organization has overcome seven major oil cycles, and has emerged stronger each time.
I want to thank the High-Level Working Group and the OPEC Secretariat for carrying out a bottom-up review of the Strategy.
Thanks to their hard work, the draft Strategy presents a complete picture of the main challenges; scenarios and sensitivity cases; elements and actions; and recommendations on how to achieve our objectives.
The document also reflects the major changes in the five years since the last review was approved by the Conference, especially developments related to energy and climate policies, tougher investment conditions, and technology trends.
Some of the identified challenges have come into sharper focus during the pandemic. One example is the stimulus funding of around $25 trillion provided by developed countries and financial institutions during the pandemic, including massive sums aimed at incentivizing low-carbon economies.
The discussions leading up to and dominating the UN climate negotiations in Glasgow last month further amplified the challenges and uncertainties facing our industry.
The potential adverse economic impacts on our Member Countries could be very significant. Yet we remain firmly committed to global cooperation on climate issues, and dedicated to finding inclusive solutions to support post-pandemic social and economic resilience.
With global primary energy demand expected to increase by 28% by 2045, this is no time to create energy pariahs, nor to side-line leading energy-exporting countries like ours.
Our world also has an obligation to help many millions of people in Africa and other developing regions who live in energy poverty. Complex and interconnected challenges like climate change and energy poverty call for comprehensive and sustainable solutions to ensure an equitable distribution of energy. No one should be left behind.
I am very pleased by the Long-Term Strategy’s strong focus on collaboration to identify and support inclusive climate and energy policies. It is of utmost importance that we build on the successes of the Declaration of Cooperation and other collaborative platforms, such as the Charter of Cooperation.
Allow me to also underscore the major contributions of OPEC’s Energy Dialogues with other producing countries, leading consumer nations and key institutions. These regular forums further contribute to the common goal of sustaining market stability.
Since the last OPEC Conference, high-level and technical meetings have taken place with the Russian Federation and India, both long-time Dialogue partners. The Gas Exporting Countries Forum is an important newcomer to these forums, and many of our Member Countries are GECF Members or Observers.
In two days, on December 3rd, the fifth OPEC-China Energy Dialogue will take place, providing an important and timely platform for discussion with one of the world’s leading energy-consuming nations. Furthermore, our extensive cooperation with the International Energy Forum and other key institutions underpin our efforts to share knowledge and expand data access. All these dialogues and exchanges are appreciated and valued by our bilateral partners.
Before we turn to our busy agenda, I would also like to pay tribute to our esteemed colleague HE Ihsan Abdul Jabbar Ismaael, Iraq’s Minister of Oil, and to his Government for the extraordinary efforts that have gone into planning for a well-deserved celebration of OPEC’s 60th Anniversary. Though delayed by pandemic-related travel restrictions, we look forward to commemorating the anniversary in the birthplace of our Organization, Baghdad, in the first quarter of 2022.
It is with great sadness that the last surviving delegate at the founding of OPEC on September 14, 1960, Abdullah Ismail, passed away recently. This distinguished veteran of the oil industry in two Member Countries, Iraq and the United Arab Emirates, will be sorely missed at the celebration.
In closing, it has been an honour for me, and for Angola, to hold the Presidency of the OPEC Conference during this history-making year.
I thank all my esteemed colleagues and the OPEC Secretariat for the outstanding support you have provided.
Thank you, and I look forward to another successful meeting of the OPEC Conference.