OPEC+ Proposed Agreement May Be Signed in December

SEATTLE (Oil Monster): The long-term, indefinite cooperation agreement being drafted by Opec and its ally, Russia, could be signed on Dec. 7, when the group next meets in Vienna, said the Saudi energy minister.

According to the transcript of an interview released Monday by Russia’s TASS news agency, Khalid Al-Falih said the so-called Opec+ “open-ended” coordination agreement would start in January, Kallanish Energy learns.

The Opec+ secretariat has been in the making for a while and both Russia and Saudi Arabia have started “quiet contacts” with some countries to join, the minister said. Russia and other countries are happy to cooperate with Opec, but not to join Opec, hence the need for a new secretariat, he added.

“I think, Russia will have to take leadership,” said Al-Falih. “Total non-Opec participation is 20 million barrels per day (Mmbpd), but Russia alone gives 11 Mmbpd. So obviously Russia is a heavyweight both in terms of production and in terms of political influence.”

The group wouldn’t follow the steps of Opec of one country, one voice. Instead, it should not “hang on voting and a formal process, but focus more on alignment and objectives,” Al-Falih said.

He said both Russia and Saudi Arabia have a “bigger scale and impact," and “ultimately carry more weight” in the future group's decisions – to be achieved through “convincing.”

“If the group (Opec and its non-Opec allies) works together, we can quickly act to adjust production,” given 2019’s uncertainties and risk of continued volatility, Al-Falih said.

 Courtesy: www.kallanishenergy.com