OPEC's Badri worried about investment but says all oil producers
must cooperate
London (Platts)--6 Oct 2015 715 am EDT/1115 GMT
OPEC Secretary General Abdalla el-Badri said Tuesday he was concerned
about the impact of low oil prices on investment and the consequences
for future supply, but insisted that rebalancing world oil markets was
the responsibility of all producers and not a burden to be borne by OPEC
alone.
Badri also predicted that oil prices would rise from current six-year
lows of below $50/b in the next few months, although he did not say how
much improvement he expected.
"We have an overhang of 200 million [barrels] in the market. All of us
should work together, OPEC and non-OPEC...all of us have to work
together to see how we can get rid of this 200 million barrel overhang,"
he told the annual Oil & Money conference in London.
"I'm really disturbed," he said, referring to the wave of investment
cuts announced by oil companies this year in response to the price
plunge. "You will see the result. This means less supply and higher
prices in the future."
Talking to reporters later, Badri said overall global investment in oil
could drop by $130 billion this year from $650 billion in 2014.
Badri also appeared to offer some comfort to those OPEC members which
have been unhappy about the group's current laissez-faire strategy of
allowing prices to fall to levels that will force high-cost non-OPEC
production out of the market.
"This will take a year, maybe a year and a half," he said.
He noted that non-OPEC supply growth was slowing and was expected to be
"zero" next year, while the call on OPEC crude was rising.
"So we see that there is an improvement in the market," he said, "but
how much the price will improve we don't know."
Badri told reporters he expected Iran's full return to the market to be
discussed at OPEC's next meeting on December 4 in Vienna.
The International Atomic Energy Agency expects to issue by mid-December
a final report on Iran's compliance with a landmark nuclear agreement
struck in mid-July, paving the way for sanctions to be lifted.
Iran has said it expects to boost its crude exports by 1 million b/d
within six months of the lifting of sanctions.
"I think this matter will be debated in the conference," he said.
Badri was asked whether any talks were planned between OPEC and a
number of independent producers. He said there had been a meeting of
technical experts in May and that he had suggested October 21 for a
follow-up meeting, again at expert level. A date has still to be set, he
said, emphasizing that this meeting will not be at ministerial level.
--Margaret McQuaile, margaret.mcquaile@platts.com
--Edited by James Leech, james.leech@platts.com
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