OPEC should be able to reach a deal next month to limit oil production without too much disagreement about individual countries’ output levels, the producer group’s secretary-general said on Tuesday.
Mohammed Barkindo also told journalists on the sidelines of the Oil & Money conference that Russia, which is not in OPEC, was not backtracking on its pledge to contribute to output limits should OPEC reach a deal at its next meeting on Nov. 30.
“We expect that all the building blocks will be in place in a timely fashion for the implementation,” Barkindo told the conference, an annual London gathering of top oil officials and company executives.
“I am optimistic we will have a decision,” he said.
The Organization of the Petroleum Exporting Countries agreed in Algiers on Sept. 28 to reduce production to a range of 32.50 million to 33.0 million barrels per day, its first output cut since 2008.
Oil prices have risen to a 2016 high near $54 a barrel since the decision.
But ministers left aside the delicate issue of how much each of the 14 OPEC members will produce, handing the matter to what the group terms a High-Level Committee that will meet in Vienna on Oct. 28-29 and to which non-OPEC representatives are also invited.
The deal faces potential setbacks from Iraq’s questioning of secondary sources’ output estimates on which OPEC bases its production decisions, and from countries including Iran, Libya and Nigeria whose output has been hit by sanctions or conflict.
Barkindo did not see the secondary-source issue as a problem in reaching an agreement and added that while there were no “exemptions” to the Algeria deal, the committee would consider nations’ circumstances.
“The Algiers accord was all-inclusive. All 14 member countries agreed to this ceiling, that gives us flexibility in implementation to take into account the special circumstances of some of our member countries, including Iran,” he said.
He declined to say whether OPEC would narrow its output target or stick to a range.
“The range provides flexibility – flexibility in coming to that all-inclusive decision of OPEC-14 as well as flexibility in the implementation of this decision,” he said.
“It’s a conference decision. What this committee is going to do is design a framework of the implementation of this range.”
He downplayed suggestions that OPEC, whose November meeting will be its oil ministers’ third this year, is moving to a more active phase of market management.
OPEC ministers have met only twice annually in recent years, less often than in the past.
“Two is more than enough,” he said.
*Alex Lawler; Karolin Schaps; Editing – Dale Hudson & David Goodman – Reuters