Agreement Between OPEC and Non OPEC Countries

Source: www.gulfoilandgas.com 12/10/2016, Location: South America

Countries outside of the Organization of the Petroleum Exporting Countries (OPEC), committed to reduce their production by 558,000 barrels per day, at a meeting of OPEC and non OPEC producing countries that was held at OPEC headquarters in Vienna, Austria. This consolidates the November 30th accord which called for OPEC members to cut their output by 1.2 million barrels per day.

"We are very happy with this historic agreement with non OPEC countries”, said the People's Power Minister of Petroleum and President of Petroleos de Venezuela, S.A. (PDVSA) Eulogio Del Pino, on Telesur network. "A week ago we had reached an agreement with the OPEC countries to cut 1.2 million barrels and today we have reached an agreement with 11 countries to cut 558,000 barrels per day as of January 1, 2017. It adds up to 1,758,000 barrels, an amount that will help with price equilibrium, placing the value of crude at a fair price”, he said.

This unprecedented meeting managed to gather 24 OPEC and non OPEC producing countries that defined strategies to cut production with the aim of stabilizing the global market, eliminating excess supply and defending a fair price for oil thus bringing to an end the cycle of low prices that has affected producing countries and the global economy.

Minister Del Pino anticipates that with this Declaration of Cooperation, signed today by non OPEC producing countries, oil prices will continue to rise and before the end of this year producers will have a fair price. "It is a very important agreement because it will have a direct impact on inventories and as well as the volumes that are in the market. It has definitely been a demonstration that producers want to have control over our prices and that now we are moving on to a new stage, as our president Maduro has defined. We have to establish price formulas that allow for much better investment planning", he said.

Minister Del Pino said that in 6 to 9 months, inventories will reach balance and the Venezuelan basket price will be between 50 and 60 dollars per barrel.

He also said that he is currently working on setting the next meeting of presidents of OPEC and non OPEC producing countries."President Maduro received a letter from the OPEC Secretariat this week requesting that he promotes this meeting for the first half of the year. We are considering that for the first quarter, if possible in the month of February, we will have that meeting of the leaders of the countries that today signed this agreement that involves countries in Africa, the Americas and that is so important for the world economy”.

Another of the achievements of this meeting was the creation of a Monitoring Committee, consisting of five countries: Russia, Kuwait, Venezuela, Iran, Algeria and Oman (three members of the organization and two non members) that will ensure compliance with this agreement.

"It is unheard of, in the past there was no such Monitoring Committee. It existed within OPEC, but never at the OPEC-non OPEC level. It will allow us to follow up on this agreement through monthly communication and data review meetings, but at the same time we will be working to establish definitive formulas”, said Minister Del Pino.


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