Nigeria Oil and Gas Conference and Exhibition3 July 2018

Special Keynote address byHE Mohammad Sanusi Barkindo

Secretary General, OPEC 

© 2018 Organization of the Petroleum Exporting Countries 22

Disclaimer

The data, analysis and any other information (‘Content’) contained in this presentation is for informationalpurposes only and is not intended as a substitute for advice from your business, finance, investmentconsultant or other professional. Whilst reasonable efforts have been made to ensure the accuracy of theContent of this presentation, the OPEC Secretariat makes no warranties or representations as to itsaccuracy, currency or comprehensiveness and assumes no liability or responsibility for any error oromission and/or for any loss arising in connection with or attributable to any action or decision taken as aresult of using or relying on the Content of this presentation. This presentation may contain references tomaterial(s) from third parties whose copyright must be acknowledged by obtaining necessaryauthorization from the copyright owner(s). The OPEC Secretariat will not be liable or responsible for anyunauthorized use of third party material(s). The views expressed in this presentation are those of theOPEC Secretariat and do not necessarily reflect the views of individual OPEC Member Countries.

© 2018 Organization of the Petroleum Exporting Countries 33

Dr Alirio Parra: An OPEC Icon 

© 2018 Organization of the Petroleum Exporting Countries 4

OPEC Bulletin: Nigeria Special 

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© 2018 Organization of the Petroleum Exporting Countries

World oil supply growth outpaced oil demand growth during 2014-2016, y-o-y change, mb/d

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From 2014 to 2016, world supply grew by 5.8 mb/d, while word oil demand increased by 4.3 mb/d. 

-2 -1 0 1 2 3 4 5

World oil demand

OPEC crude

OPEC NGLs

Non-OPEC production 3.5 mb/d

2014 2015 2016

1.9 mb/d

0.4 mb/d

4.3 mb/d

5.8 mb/d

Source: OPEC Secretariat.

© 2018 Organization of the Petroleum Exporting Countries

Rise in OECD commercial inventories, mb

6

2,562

2,706

2,989 3,002

2,853

2,500

2,600

2,700

2,800

2,900

3,000

3,100

2013 2014 2015 2016 2017

427 mb

OECD commercial inventoriesat the end of the year

8 mb

403 mb

-35-100

0

100

200

300

400

500

Oct

14

Dec

14

Feb

15A

pr 1

5Ju

n 15

Aug

15

Oct

15

Dec

15

Feb

16A

pr 1

6Ju

n 16

Aug

16

Oct

16

Dec

16

Feb

17A

pr 1

7Ju

n 17

Aug

17

Oct

17

Dec

17

Feb

18A

pr 1

8

Difference to 5-year average

Source: OPEC Secretariat.

7

Relation between investment and oil prices

7

0

20

40

60

80

100

120

01002003004005006007008009001000

Global Spending(LHS) Prices (RHS)

$ bn US$/b

‐28% ‐6% ‐15%‐7%

‐24% ‐25%‐40%

‐20%

0%

20%

40%

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Spending, y‐o‐y change

Clear correlation between oil prices and investment levels. 

The last cycle saw the most severe downturn in investment over a period of two years with around 25% drop per year. 

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Oil demand in the long‐term

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• Global oil demand will increase by 15.8 mb/d, reaching 111.1 mb/d by 2040.

• The transportation sector will remain the main consumer of oil.

• Strong growth is also foreseen in the petrochemicals sector.

• Demand growth decelerates over the long-term.

World oil demand by sector

© 2018 Organization of the Petroleum Exporting Countries

OPEC landmark decisions in 2016

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Algiers Accord

• 170th (Extraordinary) Meeting of the Conference –28 September 2016; Algiers

Vienna Decision• 171st Meeting of the Conference –30 November 2016; Vienna

• Adjustment of 1.2 mb/d from OPEC‐11 countries     

Joint Declaration of Cooperation

• OPEC and non‐OPEC Ministerial Meeting –10 December 2016; Vienna

• Adjustment of 0.6 mb/d  from 11 non‐OPEC participating countries 

Source: OPEC Secretariat.

© 2018 Organization of the Petroleum Exporting Countries 1010

Impact of DOC implementation and achievements 

25 sovereign producing nations acting in partnership Element of oil market stability reintroduced A transparent and fully accessible platform, open to all producersPositive change in perceptions of OPEC Commended by producers, consumers and industry stakeholdersPositive impact on the global economy, trade worldwide has increasedReturn of confidence to the oil industry, gradual recovery in investments Welcomed by financial markets Oil export values have significantly increased (34‐37%)

© 2018 Organization of the Petroleum Exporting Countries

Drop in OECD commercial oil stock since Declaration of Cooperation

11Sources: Euroilstock, IEA, METI, OPEC Secretariat and US EIA.

152%

118%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Jan-

17Fe

b-17

Mar

-17

Apr

-17

May

-17

Jun-

17Ju

l-17

Aug

-17

Sep-

17O

ct-1

7N

ov-1

7D

ec-1

7Ja

n-18

Feb-

18M

ar-1

8A

pr-1

8M

ay-1

8

Average

Conformity by OPEC and non‐OPEC participants, %

11926

218

86

-20

337

112

-35

-401060

110160210260310

Jan 17 Oct 17 May18

Products Crude Total

By product

‐372 mb

235

80-12

17

8

-31

85

53

8

337

140

-35

-401060

110160210260310

Jan 17 Oct 17 May 18Americas Asia Pacific Europe OECD Total

By region‐372 mb

© 2018 Organization of the Petroleum Exporting Countries

Performance of the world economy and oil demand growthpercentage GDP change from the previous year, %

Note: * 2018 = Forecast.Sources: OPEC Secretariat, IMF, Markit and Haver Analytics.

2.7

6.5

7.3

1.8

1.9

4.9

1.2

2.2

2.7

2.4

3.8

2.2

6.9

6.31.5

1.0

4.8

1.72.5

2.3

2.5

3.8

‐5.0 ‐2.0 1.0 4.0 7.0 10.0

OPEC

ChinaIndia

RussiaBrazil

Non‐OECD

JapanEuro‐zone

USOECD

World

2017*

2018*

GDP growth in selected countries

12

97.6

100.3

96

98

100

102

45

48

51

54

1Q18 2Q18 3Q18 4Q18

OECD Non‐OECD World oil demand (RHS)

World oil demand, 2018 (mb/d)

www.opec.org

Thank you

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