The Organization of Arab Petroleum Exporting Countries (OAPEC) approved Egypt’s proposal to outline a set of measures to overcome the consequences of the global financial crisis during a closed-door meeting.
The OAPEC meeting, which mainly aimed to follow up the latest developments of the world oil market, came ahead of a planned meeting of the Organization of Petroleum Exporting Countries (OPEC). Ten ministers out of the 11-OAPEC members attended the meeting, as Syria was the only exception.
It is worth mentioning that seven OAPEC members belong to OPEC membership.
The Egyptian Minister of Petroleum Eng. Sameh Fahmy said that the timing of the two OAPEC and OPEC meetings was crucial amid the record drop of oil prices and relevant negative effects on the producers and the global economy.
“A set of measures will be drawn up to deal with the negative consequences of the global financial crisis in the oil, gas and petrochemical sectors,” Fahmy highlighted.
The proposals will be submitted for approval by the Arab League’s first economic summit to be held in Kuwait in January 2009. Egypt will head the OAPEC ministerial meeting in 2009 after Libya.
Saudi Oil Minister Ali Al-Naimi, talking after a meeting of the Arab oil countries’ sub-group OAPEC, indicated the sentiment for a production cutback at the forthcoming OPEC ministerial meeting on Dec 17 in Algeria. “We will decide on a firm measure when we meet in Algeria,” he told reporters, remarking that a cut is possible.
Crude prices dropped from $147 per barrel to lower than $50 over the past few months, which forced OPEC to meet in Vienna on October 24 and announce a 1.5 million-barrel cut in daily crude production.
OPEC President Chakib Khelil told reporters that some countries were currently finding “no buyer for their crude,” adding that some oil needs to be taken off the market.
The cartel is expected to announce a further cut at a meeting in Algeria on December 17th.
Several oil ministers expressed on the same day their discontent with the current oil prices, and called for all oil exporting countries to cooperate in order to help to restore prices back to normal.
Qatar’s Oil Minister, Abdullah Bin Hamad Al-Attiya, said before the OAPEC meeting on the same day, “We believe $70 a barrel is an acceptable price, which would encourage investment in the sector.”
He also called for cooperation between OAPEC and OPEC members and declared that his country believes prices should be between $75 and $100 per barrel, because if the price falls below $70, investment would freeze, which would cause a crisis in supply in the future.