Brussels, 29/06/2010 (Agence Europe) - The disaster caused by offshore drilling by the British oil company BP in the Gulf of Mexico (United States) was a main point on the agenda of the 7th ministerial energy dialogue meeting between the EU and the Organisation of Petroleum Exporting Countries (OPEC), in Brussels on Monday 28 June. Representatives of the EU included the Belgian energy minister, Paul Magnette, and the special adviser to the Spanish energy minister, Alfonso Gonzalez Finat. Representatives for OPEC included the Ecuadorian minister for petroleum and OPEC president-in-office, Wilson Pástor-Morris, and Iranian petroleum minister Masoud Mir-Kazemi. Energy Commissioner Günther Oettinger and the OPEC secretary general, Salem El-Badri, expressed their concern regarding the disaster and agreed that a time for reflection was needed before political measures are taken. “Good responses take time”, Oettinger stressed, initialling a debate at Community level on the safety of oil and gas drilling platforms (EUROPE 10166). Underlining the EU's experience in extraction and noting that drilling in the North Sea is not as deep as in the Gulf of Mexico, the commissioner admitted that ever more advanced techniques push companies to the limits of technology. “This raises serious and urgent questions”, he stressed, calling for a system of regulation that will reassure European citizens about the impact of the offshore industry. El-Badri was more cautious about the need for political measures against oil drilling in shallow waters, and was reticent to put all the blame on BP. “We cannot say that BP has a bad reputation. We do not know what happened in the Gulf of Mexico. At present, we must assess the situation. Perhaps it was human error or an error of design - but we must wait to know”, he stressed. EU and OPEC ministers agreed an international round table on the safety of offshore drilling should be held in Brussels early 2011, with representatives from industry and from national regulatory authorities.
At bilateral level, discussions between EU and OPEC representatives, who established high level bilateral dialogue in 2004 to improve relations between producer and consumer countries, focused on ways to strengthen energy cooperation between the two blocs and to stabilise oil prices. In a joint statement, ministers reaffirm their agreement on the fact that fossil fuels will “continue to meet most of the world's energy needs, with oil playing the leading role”. “Global demand for oil is expected to resume growth in 2010”, they went on to say, reaffirming the EU and OPEC commitment in favour of sustainable development principles. The text also confirms the “mutual interest” of participants in “stable, transparent and predictable oil markets”. In order to reduce risk of excessive market volatility, they reiterated their conviction that adequate regulatory reforms, including greater transparency, need to be part of an overall reshaping of the global financial sector. The statement also points out that EU/OPEC energy dialogue will continue to analyse and discuss the root causes of the recent financial crisis and economic recession, including the financial losses incurred by producing countries.
The OPEC side said the influence of financial markets on crude prices deserves further attention, with these prices “closely following movements in equity markets and the US dollar”, as El-Badri pointed out. Answering press questions on the ideal price of oil for both producers and consumers, the OPEC secretary said the cartel had “no target”. “What we need is a reasonable price so that we can invest for new supply. I cannot give you a figure. Right now, we are comfortable with the level of prices”, he explained. Oettinger considers the price mechanisms are working well. “We think the rule of fixing prices is OK and intact”, the energy commissioner said. In his opening address, El-Badri reiterated the ongoing investment drive in OPEC member countries in the petroleum industry, both upstream and downstream, despite the disruptions and uncertainty caused by oil price volatility. He also underlined how important it was for producer countries to receive reliable market signals and for consumer countries to conduct predictable energy policies so that investment is pursued in a timely and adequate manner.
The 8th ministerial meeting is scheduled for June 2011, in Vienna. (E.H./transl.jl)