OPEC’s talks with non-cartel oil producers to give no results

Oil&Gas Materials 29 January 2016 21:28 (UTC +04:00)
The talks of OPEC with non-cartel oil producers won’t give any results.
OPEC’s talks with non-cartel oil producers to give no results

Baku, Azerbaijan, Jan. 29

By Elena Kosolapova - Trend:

The talks of OPEC with non-cartel oil producers won't give any results, said Nikolai Ivanov, head of the energy markets sector at Russian Institute for Energy and Finance, speaking to Trend Jan. 28.

This week, OPEC urged non-cartel countries to jointly solve the problem of oil excess on the market. On Jan. 28, Russian Energy Minister Alexander Novak said that in February, OPEC plans to hold a meeting with participation of the non-cartel oil producing countries, and Russia is ready to participate in it.

"OPEC is in fact on its last legs," Ivanov asserted. "Saudi Arabia is taking steps that other countries perceive as unfriendly. There are very strong contradictions within the OPEC itself."

The expert reminded that most of OPEC countries are not pleased with the current low oil price.

He added that Nigeria, Algeria, Angola, Venezuela are among them.

"In particular, Arab countries do not suffer," he said. "The Arabs are able to reduce the price upon the long-term contracts."

Ivanov also said that currently OPEC must somehow save reputation and pretend that it is somehow trying to act in the common interests of the organization's members.

"Their actions are unlikely to result in anything," he said. "But it is necessary to imitate some activity. It is necessary to negotiate, meet in Vienna and make statements."

Ivanov added that OPEC Secretary General Abdalla Salem El-Badri's initiative to negotiate with different oil producers contradicts to OPEC's previous actions.

Saudi Oil Minister Ali Al-Naimi said earlier that only efficient producers should stay in the market, Ivanov recalled, saying that in other words, Saudi Arabia didn't want to subsidize inefficient producers within OPEC.

"The Saudis didn't want to share their part in the market and told about it directly. After Saudi Arabia has showed its true intentions, it is unlikely that anyone would believe it," said Ivanov.

In addition, the majority of traditional fields in the world do not allow reducing oil production smoothly, according to him.

For example, he said, if the production is cut in Russia, the specifics of the old Siberian fields won't allow increasing the output later.

"Therefore, the negotiations between Russia and OPEC are absolutely meaningless," said Ivanov.


Follow the author on Twitter: @E_Kosolapova