London — OPEC may still consider extending its cooperation with non-OPEC partners on managing supplies despite a tightening market and the recent geopolitics-led rise in oil prices, Qatari oil minister Mohammed al-Sada said in an interview (full transcript).
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Global upstream investment is still lagging and will be insufficient to meet projected future demand, Sada told S&P Global Platts.
"It would be safe to say that, except for shale plays in USA, there is still a general hesitation in committing resources for oil exploration and development.," Sada said. "There is a need to stimulate investments to ensure adequate oil supplies are available to meet the growing demand and offset declines in some parts of the world."
OPEC meets June 22 in Vienna to review its 1.8 million b/d supply cut pact with 10 key non-OPEC producers, including Russia, which is scheduled to run through the end of 2018.
OPEC officials have over the last several months said they intend to extend some kind of production monitoring agreement with Russia and other non-OPEC countries beyond the deal's expiry.
In recent weeks, however, ministers from Saudi Arabia and Russia have suggested that quotas could be eased going forward to make up for any lost supplies from Venezuela's continued output decline and US sanctions on Iran.
Venezuela and Iran have appealed to OPEC to maintain unity, saying any rises in production by other members at the expense of their market share runs counter to OPEC statues intended to protect each country's interests.
Sada, who served as OPEC's president while the deal was being negotiated in 2016, did not comment on whether OPEC should negotiate an exit strategy from the cuts at the Vienna meeting.
But he credited the deal with clearing the global OECD stock overhang of some 340 million barrels above the five-year average since coming into force in January 2017.
"It has worked well, and there is certainly a good opportunity to extend and enhance the cooperation with the countries who have contributed to the stabilization of the market in the best interest of all and the world economy at large," Sada said.
He said ministers would review market conditions at the upcoming meeting and a decision would be made, "taking into consideration the short-term and long-term market stability."