GECF and OPEC Commit to Working More Closely Together in the Future
The Gas Exporting Countries Forum (GECF) Secretariat leadership team, led by HE Secretary General Yury Sentyurin, met with OPEC Secretary General HE Mohammad Sanusi Barkindo and the OPEC delegation for the 1st Technical Meeting of the OPEC-GECF Energy Dialogue on 22 June via a webinar.
The meeting reflected on the impact of the COVID-19 pandemic on the global economy, oil and gas markets, medium- and long-term energy market assumptions and perspectives, as well as technical collaboration on data and statistics. The two organizations also renewed their commitment to laying the groundwork of closer collaboration even under the unprecedented circumstances being faced by the global economy.
The meeting also reached a consensus on the importance of energy security and maintaining stability in the energy markets as well as supporting and promoting the unique importance of multilateralism.
Kicking-off the discussion, HE Barkindo referred to the recent decisions taken by participants of the Declaration of Cooperation at the 9th, 10th and 11th (Extraordinary) OPEC and Non-OPEC Ministerial meetings held on 9-10, 12 April and 6 June 2020, respectively, to adjust overall crude oil production by 9.7 mb/d for May and June 2020, with a further extension until the end of July agreed at the 11th meeting. Further adjustments are to take place for a total of two years under the initial agreement, until 31 December 2020 by 7.7 mb/d; and from 1 January 2021 to 30 April 2022 by 5.8 mb/d.
HE Barkindo spoke about the great many things the GECF and OPEC have in common, including many of the same member countries, the essential nature of both organizations for the development of mankind, and organizational goals.
“I believe there is a great deal that we can learn from each other,” said HE Barkindo.
Highlighting that the themes that bind the two organizations together also hold the potential to be make them thrive, HE Yury Sentyurin said: “We consider the GECF-OPEC Memorandum of Understanding (MoU) to be a milestone in the evolving relationship between our entities. Since the signing of the bilateral MoU between GECF and OPEC in Moscow on the sidelines of the Russian Energy Week in October 2019, our collaboration has been developing incrementally due to the ongoing fruitful dialogue and enabling working contacts between our officials.”
Speaking about the pressing issues facing the oil and gas industry, the GECF Secretary General remarked that, at present, the Forum is elaborating a new post-COVID-19 scenario, which forecasts natural gas demand to decline in 2020 by 2.8% in the best-case scenario and up to 6% in the worst-case scenario. Further, any recovery and anticipated rebound of the economy in 2021 is unlikely to compensate for the losses the industry has incurred, and that gas demand could reach the 2019 levels only in 2022.
In the long run though, according to the long-term projections, the natural gas will remain an indispensable fuel for the energy transition, however gas consumption in 2050 can be 2-3% less (or between 100 to 200 bcm less) than the volumes the GECF forecasted as recently as February 2020.
Moreover, a prolonged period of increased gas affordability provides strong economic and environmental reasons for governments in consumer countries to strategically realign energy policy towards natural gas.
To this end, reiteratedly extending sincere appreciation to the OPEC’s proposal, GECF Secretary General reaffirmed the Forum’s readiness to formulate a special box on natural gas and LNG supply in the new edition of the OPEC World Oil Outlook 2020.
In conclusion, HE Yury Sentyurin extended his congratulations to HE Barkindo and his Secretariat staff on the occasion of OPEC’s diamond anniversary, which is being celebrated this year.
The GECF and OPEC signed a Memorandum of Understanding on 30 October 2019, to “exchange knowledge, experience, views, information, data and practices in the areas of mutual interest.”
Areas of cooperation identified in the MoU include energy market monitoring, analysis, modelling and forecasting; energy market research studies covering the short- medium- and long-term, and their methodologies; energy market data and statistics, data and statistical operational topics (such as methodologies of data gathering, assessment and dissemination); energy initiatives and developments aimed at sustainability, along with environmental and social responsibility; and other areas and matters involving common interests and concerns.