The 9th OPEC and non-OPEC Ministerial Meeting held in the format of online video conference has adopted the new Declaration of Cooperation that envisages a three-stage cut in oil production from October 2018 levels, the Azerbaijani Ministry of Energy told local media.
The ministry said that along with OPEC+ countries, Norway, Argentina, Colombia, Indonesia, Egypt, Chad, Trinidad and Tobago were the new participants of the video conference. OPEC+ countries have agreed on a daily cut in oil production for various periods and volumes.
According to the new Declaration of Cooperation, OPEC + countries will decrease oil production by 10 million barrels per day from May through June, which is 23 percent of the level of October 2018. The production commitments made up over 6 million barrels per day for OPEC countries and more than 3.9 million barrels per day for non-OPEC countries.
The production quota limits for the member countries and non-OPEC countries include only volumes of crude oil. Condensate volumes are not taken into account in these commitments.
Azerbaijan, oil production of which amounted to 718,000 barrels of crude oil per day in October 2018, also undertook new commitments to balance the world oil market and stabilize oil prices. According to the new agreement, it will reduce the production by 164,000 barrels.
Thus, from May 1 through July 1, 2020, daily oil production in Azerbaijan will be regulated in accordance with the agreed quota. During this period, it should maintain a daily oil production at the level of 554,000 barrels.
An agreement was reached to decrease the daily oil production within OPEC + from July through December 2020 by 8 million barrels, which is 18 percent of the level of October 2018. The quotas were set at 4.8 million barrels per day for OPEC member countries and 3.1 million barrels per day for non-OPEC countries. During this period, Azerbaijan will need to reduce daily production by 131,000 barrels to 587,000 barrels.
From 2021 to April 2022, it’s planned to reduce daily oil production on OPEC+ by 6 million barrels, which is 14 percent of the level of October 2018. The production obligations for this period will amount to 3.6 million barrels for OPEC and 2.3 million barrels for non-OPEC countries. Azerbaijan will need to reduce production by 98,000 barrels for this period and maintain production in the amount of 620,000 barrels.
The OPEC countries’ representatives appealed to non OPEC + countries to reduce oil production by 5 million barrels per day.
Commenting on the new agreement, the Minister of Energy of Azerbaijan Parviz Shahbazov has appreciated the decision of OPEC and non-OPEC countries.
“The new reality is such that we can solve the existing global problem not separately, but through global cooperation. For a short period of time since March, we again became convinced that sustainable stability in the oil market is impossible without joint responsibility and the regulatory process at the global level,” he said.
“The current situation and uncertainty regarding the recovery of the global economy, as well as global demand for oil, make us support the oil market in the future. Involving non-OPEC + countries in this process is very important. We hope that this OPEC + decision and the efforts of other countries outside the OPEC will gradually contribute to establishing a balance and price stability in the oil market,” the minister noted.
“This emergency meeting of the leading global oil producers is a historic event for the oil market. Each oil country participating in this process has shown solidarity with the intention to stabilize the oil market. Azerbaijan, which plays an active role in the OPEC + regulatory process, has also supported the global oil market by accepting new commitments,” Shahbazov added.
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