OPEC is drafting an agreement that would institutionalize the producer groups oil market cooperation with Russia and other allies beyond their current output cut agreement, which expires at the end of the year, Platts reported on February 15, 2018.
OPEC Secretary Gen. Mohammed Barkindo confirmed to Platts the draft agreement was in the works, which was 1st reported by UAE newspaper «The National» in an interview with UAE energy minister Suhail al-Mazrouei.
«The aim is together with the secretary general to put together a draft agreement for this group to stay together for a longer time,» Mazrouei said, adding that it was »a work in progress» and providing no other details. Mazrouei, who currently holds the rotating OPEC presidency, said that he hoped the pact could be signed by the end of the year.
The OPEC/non-OPEC production cut agreement commits OPEC and 10 partners, led by the worlds largest crude producer Russia, to cut 1.8 million b/d in supplies to rebalance the market. Barkindo has previously said that the cooperation between the 24 countries in the supply cut agreement should be made permanent, but the comments indicate that the platform may be close to being formalized.
Russian energy minister Alexander Novak in an interview with Platts said Russia was keen to build a long-term relationship with OPEC kingpin Saudi Arabia and the broader OPEC alliance.
«We understand that global demand for oil will continue to grow rapidly and this demand will need to be met, so we will likely need to work together, including on upstream technology and joint projects to meet this growing demand,« Novak said, just before meeting with his Saudi counterpart Khalid al-Falih in Riyadh.
«Taking into account the current political and economic relationship and projects that we're considering, I think our relationship will be of long-term nature,» Novak added.
Falih, for his part, said in Oman last month that the coalition would seek to continue their stewardship of oil supply into 2019 and beyond, to give the industry a smoother market in which to invest to meet future demand.