London — OPEC is drafting an agreement that would institutionalize the producer group?soil market cooperation with Russia and other allies beyond their currentoutput cut agreement, which expires at the end of the year.
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OPEC Secretary General Mohammed Barkindo confirmed to S&P Global Platts thedraft agreement was in the works, which was first reported Thursday by UAEnewspaper The National in an interview with UAE energy minister Suhailal-Mazrouei.
"The aim is together with the secretary general to put together a draftagreement for this group to stay together for a longer time," Mazrouei toldthe newspaper, adding that it was "a work in progress" and providing no otherdetails.
Mazrouei, who currently holds the rotating OPEC presidency, said that he hopedthe pact could be signed by the end of the year.
The OPEC/non-OPEC production cut agreement commits OPEC and 10 partners, ledby the world?s largest crude producer Russia, to cut 1.8 million b/d insupplies to rebalance the market.
Barkindo has previously said that the cooperation between the 24 countries inthe supply cut agreement should be made permanent, but the comments indicatethat the platform may be close to being formalized.
Russian energy minister Alexander Novak could not immediately be reached forcomment, but in an interview with Platts on Tuesday, he said Russia was keento build a long-term relationship with OPEC kingpin Saudi Arabia and thebroader OPEC alliance.
"We understand that global demand for oil will continue to grow rapidly andthis demand will need to be met, so we will likely need to work together,including on upstream technology and joint projects to meet this growingdemand," Novak said, just before meeting with his Saudi counterpart Khalidal-Falih in Riyadh.
"Taking into account the current political and economic relationship andprojects that we're considering, I think our relationship will be of long-termnature," he added.
Falih, for his part, said in Oman last month that the coalition would seek tocontinue their stewardship of oil supply into 2019 and beyond, to give theindustry a smoother market in which to invest to meet future demand.
"It does not necessarily mean that sticking barrel by barrel to the samelimits or caps or targets of production country by country that we signed upto in 2016, but assuring stakeholders, investors, consumers and the globalcommunities that this is something that is here to stay," he said.
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