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U.S. shale companies ready for dialogue with OPEC

24 July 2017 [14:42] - TODAY.AZ

By Azernews


By Sara Israfilbayova

American producers of shale oil are ready for a dialogue with the Organization of the Petroleum Exporting Countries (OPEC).

The OPEC dialogue with U.S. shale oil producers, which was launched last year, will continue, said Secretary General of OPEC Mohammed Barkindo in an interview with RBC.

"For the first time in the history of OPEC, we started a dialogue with producers in the U.S. We initiated this dialogue, I should say that I was surprised by the warmth with which they accepted this initiative,” he stressed.

Barkindo also talked about working with Russia, which, he said, has lasted for more than 10 years. "We have come a long way with Russia. Now it has reached the point where we are working together on the stability of the world oil market. We hope that eventually American manufacturers will join us in these joint efforts to restore stability to the industry, which in the past two years has been declining," he added.

The Secretary General noted that according to the preliminary forecast of cartel experts, this year the organization expects zero growth, further adding that this is a direct threat to future oil supplies.

The forecast for oil production in non-OPEC countries, he notes, on the contrary, will only grow.

Ministers from the OPEC and other non-OPEC producers will meet in the Russian city of St. Petersburg on July 24 to review market conditions and examine any proposals related to their pact to cut output.

Sources familiar with the talks said the meeting may introduce a conditional cap on output from Nigeria and Libya - two OPEC members so far exempt from output cuts, according to Reuters.

OPEC and non-OPEC producers reached the agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from Jan. 1, 2017.

The parties decided to extend the production adjustments for a further period of nine months, in May 2017.

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