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Opec, non-Opec to meet in Turkey: Caracas, Algiers

06 Oct 2016 12:51 (+01:00 GMT)
Opec, non-Opec to meet in Turkey: Caracas, Algiers

Santiago, 6 October (Argus) — Representatives from some Opec and some non-Opec oil producing countries will meet informally in Istanbul on the sidelines of the World Energy Congress, according to the governments of Venezuela and Algeria.

Venezuelan energy ministry Eulogio Del Pino will participate in a meeting on 12 October and other participants will include the oil minister of Saudi Arabia Khalid al Falih, Russia's Alexander Novak, Algeria's Nouderine Boutarfa, Gabon's Etienne Ngougou, the UAE's Suhail Al Mazrouei and Qatar's Mohammed Al Sada, according to a Venezuelan government statement. Novak is the only non-Opec minister on the list but — the US aside — Russia is by far the most important non-Opec producer and was involved in a failed plan to freeze production alongside Opec earlier this year.

Ministers from some smaller non-Opec producer countries are due to be in Istanbul. The countries include Bahrain, Mexico, and Yemen.

The objective of the meeting is to discuss "implementation of a production freeze" agreed by Opec members in Algiers last month, and the incorporation of non-Opec countries into the accord.

In a separate statement, Caracas said Venezuelan president Nicolas Maduro will "soon" meet with his Russian counterpart Vladimir Putin to forge oil, economic, agricultural and trade agreements and issue "good announcements" regarding the stabilization and recovery of the oil market.

And Algerian minister Boutarfa said today: "God willing, there will be an unofficial meeting between Opec and some non-Opec countries during the World Energy Congress in Istanbul." He did not specify which non-Opec countries would participate.

Opec members agreed in Algiers on 28 September to work towards reducing their combined output to 32.5mn-33mn b/d, and set up a committee representing all members to work out the modalities of implementing the decision and dividing the cut among producers. The committee will make recommendations to the next Opec ministerial meeting in Vienna on 30 November.

"At the upcoming meeting in Vienna at the end of November, we will evaluate the market. Opec is now unified and everything has become easier," said Boutarfa.

"We have taken the first step to protect prices and, God willing, they will rise above $50/bl. Even though there is no written target, the initial target is $55/bl. We have said between $50/bl and $55/bl for prices in 2017," he added.

Russian oil minister Novak said at a joint press conference with Saudi minister al-Falih on 27 September in Algiers that if Opec members are able to agree in November to limit their output, "[we] will be ready to contribute and do our best to see a swifter and quicker rebalancing of the market."

But Novak made clear that Russia's strategy for collaborating with Opec to rebalance the market focuses on avoiding output increases, rather than cutting output.

"With respect to the Russian strategy, it spells out maintaining our production flat, and never mind that demand will keep increasing, we will not put additional pressure on the market as our supply will remain flat," said Novak.

Asked which non-Opec countries might join Opec in restraining output to support prices, Novak said, "If there is a deal, the proposal will be made to quite a big number of non-Opec countries. In April, we had seven non-Opec countries around the table at the Doha meeting with a considerable amount of production. All the exporters may participate."

Venezuela and Algeria are among the Opec countries hardest hit by the 2014 plunge in oil prices. Both have lobbied hard for Opec members to agree to production constraints and to involve non-Opec producers.