Opec’s secretary general said today that the rebalancing of the oil and gas market was under way following a recent agreement to cap crude output.
Mohammad Sanusi Barkindo said last month’s Opec agreement in Algiers had reduced volatility and halted further deterioration in prices.
However, he said the large stock overhang was still a major concern.
Speaking at the fifth annual Opec-Russia Energy Dialogue in Vienna, Mr Sanusi Barkindo said: “We believe it is essential that producers, both OPEC and non-OPEC, look to address the issue of the stock high inventories. This is now central to the return of a balanced market and to establish sustainability.
“The importance of this cannot be overemphasized. We need sustainable market stability to fund investment in new exploration and production, to arrest decline rates in existing fields, to expand midstream and downstream capacity and to hire, train and support the people that will continue to drive this industry forward in the years ahead.”
He said a number of challenges facing the industry would be addressed at today’s gathering, including excessive speculation and the role of financial markets, the impact of geopolitics, advances in technology and environmental and climate change policies.
Mr Sanusi Barkindo said cooperation between Opec and Russia had flourished in recent years, with direct and open channels of communication evolving.
“The leadership role of the Russian Federation is crucial in combatting the current energy challenges that are often intertwined and complex in nature,” he said.
The meeting was attended by a Russian delegation that included Energy Minister Alexander Novak.
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