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How can world energy map change if OPEC reaches deal?

Oil&Gas Materials 7 November 2016 11:58 (UTC +04:00)
OPEC deal in effect is not so much of a deal, given that all the important details were left out, Sijbren de Jong, analyst at The Hague Center for Strategic Studies and expert in energy security

Baku, Azerbaijan, Nov.7

By Leman Zeynalova – Trend:

OPEC deal in effect is not so much of a deal, given that all the important details were left out, Sijbren de Jong, analyst at The Hague Center for Strategic Studies and expert in energy security, told Trend Nov. 7.

He pointed out that it is unknown yet who will cut the oil production, by how much and etc. and the countries involved are arguing over these points.

Currently, all eyes are on Russia, but it will not cut production, according to the analyst.

“Russia right now needs the money it makes off international oil sales and quantity also matters,” said Sijbren de Jong. “Besides that the history of OPEC-Russia cooperation is not great.”

Regarding the prospects for changes in the world energy map in the case if OPEC reaches a deal in Vienna, he noted that if Saudi Arabia cuts the oil output, it will have to rely on other OPEC countries to not step into the market share it leaves behind.

However, history has shown that other OPEC members cannot always be trusted in this regard, according to Sijbren de Jong.

So, market rebalancing very much depends on the extent to which the investments in new fields that are currently not being made will have an effect in the long term.

Officials and experts from OPEC countries and non-OPEC nations, including Azerbaijan, Brazil, Kazakhstan, Mexico, Oman and Russia met for consultations in Vienna on Oct. 29 and only agreed to meet again in November before a scheduled regular OPEC meeting on Nov. 30.

OPEC and non-OPEC countries said in a joint statement that the meeting on Oct. 29 was "a positive development" towards reaching a global output limiting deal on Nov. 30.

In September, OPEC producers agreed during the informal meeting in Algiers to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.

How much each country will produce is to be decided at the next formal meeting of OPEC in November.

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