Page 6 - AfrElec Week 14

AfrElec COMMENTARY AfrElec
Four windows on OPEC-plus talks
Smaller oil-producing states will watch the upcoming Russian-Saudi discussions closely
GLOBAL
WHAT:
Tough demand and price conditions are generating widespread interest in the April 9 OPEC-plus meetings
WHY:
Some African and Latin American states have stopped short of pledging to support production cuts
WHAT NEXT:
Brazil has suggested working through the G20 rather than OPEC
AS Russia and Saudi Arabia gear up for talks at OPEC’s headquarters in Vienna on April 9, other oil-producing states are looking on anxiously. They have a stake in the outcome of these dis- cussions – not just because many of them were party to the OPEC-plus agreement that expired at the end of March, but also because their own economies have been shaken by the collapse of that accord.
Moreover, officials from many of these smaller producers will participate in the nego- tiations. Many of them hope to see a new OPECplus output deal emerge from the meet- ing, laying a foundation for recovery from the demand destruction that has followed the spread of the coronavirus (COVID-19) pandemic.
These hopes are not entirely unreasonable, given that Russia has said it would like to see OPEC and its allies in the OPEC-plus agreement reduce yields by a combined 10mn bpd.
But production cuts do not appear to have universal support. This essay will examine some of the statements coming out of Latin America and Africa in advance of the talks in Vienna.
Algeria
Algeria, which currently holds the presi- dency of the OPEC Conference, has indicated that it believes that production cuts ought to be foremost in the thoughts of those present at the
meeting on April 9.
The North African state’s Energy Ministry
said as much in a statement issued on April 5. “Algeria calls upon all oil-producing coun- tries to seize the opportunity of the meeting scheduled to be held on April 9, to work co-op- eratively towards reaching an agreement for a global, massive and immediate reduction in oil production,” Energy Minister Mohamed Arkab
was quoted as saying in the statement.
Arkab noted that world oil markets were under pressure now, but he also pointed out that coronavirus-related drops in energy demand were not the only factor in play. A number of the world’s largest oil producers have responded to the expiration of the OPEC-plus deal by increas-
ing output rapidly, he noted.
The only way to improve market conditions,
he added, is for oil producers to work together to rein in output.
Nigeria
Timipre Sylva, Nigeria’s Minister of State for Petroleum Resources, said on April 6 that his country was ready to contribute to efforts to hammer out an agreement between producers.
“Nigeria, like the rest of the world, has been hit by the global pandemic, COVID-19, and is prepared to join the rest of the world in making the necessary sacrifices needed to stabilise the
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w w w . N E W S B A S E . c o m Week 14 09•April•2020