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Wednesday, 26 April 2017 20:00

There seems to be a consensus in oil production cut by OPEC and non-OPEC countries, - Minister of Energy of Saudi Arabia Featured

There seems to be a consensus in oil production cut by OPEC and non-OPEC countries, - Minister of Energy of Saudi Arabia

“In terms of the oil policy both countries are also very responsible in their approach to the oil markets. We realize that the markets can only prosper if the interests of consumers and producers are protected and if supply and demand are balanced. We do not have shortages or excessive supply which in the past caused extreme volatility”, Minister of Energy, Industry and Natural Resources of Saudi Arabia Khalid al-Falih told journalists in Baku today (April 26) while commenting the situation with present oil prices, Caspian Energy News (www.caspianenergy.net) reports.

“Last year we consulted with our friends and colleagues in Azerbaijan about the need to come together and have a moderate reduction and supply that will bring the market more into balance. Azerbaijan committed to reduce 35,000 barrels from their production. They have not only met, they have exceeded it. Saudi Arabia has also committed to bring its production to about 10.06 mln barrels per day and we have been below that level so far this year. We consulted today between the two ministries and our delegation about what to do next and as I mentioned before we are totally aligned. We think we need to bring global inventories to where the 5-year average should be. We will make that decision”, he emphasized in reply to the question about the decision to cut production by OPEC and non-OPEC countries.

Assessing Azerbaijan’s role in promoting the oil production cut agreement, he noted that “Minister of Energy of Azerbaijan Natig Aliyev has agreed to join us in Vienna on May 24-25”.

“Between now and then I will be discussing with him what are the options on the table and we will listen to the views of Azerbaijan. Azerbaijan is a leading oil province. They are the first one to produce oil before Saudi Arabia ever produced. So I am optimistic about the oil markets. We think they will balance this year and if they don’t balance within the remaining period before the deal expires all of us will be pragmatic enough to do the right thing which is to bring these markets into balance”, Khalid al-Falih continued.

Commenting the fact that Azerbaijan has announced about the commencement of the post-oil era and economic reforms for general promotion of the non-oil sector, Khalid al-Falih stated: “This is extremely important for all resource rich countries. Saudi Arabia and Azerbaijan have many things in common, including our heritage, culture and our values. But we are also resource dependent. Both countries depend on hydrocarbons for their export and foreign currency dependence. Therefore it is important to diversity and not to move away from oil but to build other sectors that will allow non oil exports. Saudi Arabia has a vision 2030 which is very much about diversification and building non-oil industries and economic sectors. I have been exposed today in our discussions with Minister Natig Aliyev and the Deputy Minister of Economy about ambitious plans. We will be sharing our experience in implementing vision 2030. And both countries will benefit from this exchange of views not only on planning but also on implementation of these ambitious plans. And we hope that Saudi Arabia will help Azerbaijan by investing it. We will encourage both our sovereign wealth fund, our big enterprises like SABIC and Maaden to come and invest in Azerbaijan, as well as the private sector.  We have many companies and individuals and funds in Saudi Arabia who are looking for safe and high growth economies to invest. And I certainly see Azerbaijan in that category. We will encourage them to come and be part to this economic and industrial diversification story that is taking place”.

Speaking about the extension to the OPEC and non-OPEC agreement, Khalid al-Falih highlighted the following:

I think you will hear about it in four weeks. All I said last week is that there seems to be a consensus in that direction but we still need to talk to a big non-OPEC exporter like Russia. I will be meeting with RF Minister of Energy Alexander Novak in the next two weeks. I will be talking to him by phone hopefully this week. And we will develop a decision that everybody has to support. The agreement delivery is very good. It is not perfect. Azerbaijan deserves the biggest appreciation together with Saudi Arabia, Angola and a couple of other countries that have over delivered to their commitments. We have to encourage others to catch up in April and in May and June. At the same time we will give everybody an opportunity to state what they think as far as what to do after June. The monitoring committee met in March and they will issue a report before the OPEC and non-OPEC meeting takes place in May. That will give us their recommendation. So we have to give them a chance to do that analysis”.

Person in charge of the newsline: Jeyhun Bayramov 

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