Jeddah summit calls for more investment in oil output
Sunday, 22 June 2008, 19:30 IST
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Jeddah: The world's top oil producing and consuming countries have called for increased investments in oil production as well as greater transparency and regulation of financial markets to rein in spiralling prices. In a final communiqué issued at the end of the emergency meeting of oil consuming and producing countries convened by Saudi Arabia here Sunday, it was stated participants noted with concern that oil prices have risen sharply. "Participants also noted that current oil prices and their volatility are detrimental to the global economy and in particular the economies of least developed countries," it said. The communique was jointly issued by the secretariats of the Organization of Petroleum Exporting Countries (Opec) and the International Energy Agency (IEA), Saudi Arabia and the Riyadh-based International Energy Forum. Though it did not mention any specific steps to curb global oil prices, it stated: "The existence of spare capacity throughout the oil supply chain is important for the stability of the global oil market. "Hence an appropriate increase in investment, both upstream and downstream, is necessary to ensure that the markets are supplied in a timely and adequate manner. Predictable energy and investment policies, as well as better access to technology, are necessary to this end." It said that the participants recognized that the transparency and regulation of financial markets should be improved through measures to capture more data on index fund activity and to examine cross-exchange interaction in the crude market. "The quality, completeness and timeliness of oil data submitted through the monthly Joint Oil Data Initiative (JODI) should be enhanced," the communiqué stated. "In order to further improve market transparency and stability, the seven organisations involved in JODI (Apec, Eurostat, IEA, IEF, OLADE, Opec and UNSD) are called upon to start work to cover annual data, that includes, among other things, upstream and downstream capacities and expansion plans." It called for an immediate collaboration between the IEA and Opec secretariats, along with the IEF secretariat, to prepare shared analyses on oil market trends and outlook, as well as of the impact of financial markets on the level and volatility of oil prices, which can be used to better understand the market situation. The participants also recognized that "development assistance from the national, regional and international finance and aid institutions is intensified to alleviate the consequences of higher oil prices on the least developed countries". The communiqué called for enhanced cooperation among international, national and service companies from all producing and consuming countries in investment, technology and human resource development. It was also recognized that "energy efficiency is promoted in all sectors through passing on market price signals, technology transfer and the sharing of best practices in energy production and consumption", it said. The statement concluded with a call to host Saudi Arabia and the other participating nations in the Jeddah meet to reconvene in London later this year in response to the invitation extended by the British government. Sunday's meeting was convened by the Saudi Arabian government to discuss what it said was an unjustified rise in prices of petroleum products. Global oil prices have doubled from $50 a barrel in August last year to between $135 and $150. The meeting was attended by representatives of 36 oil producing and consuming countries including India, seven international organizations, and a number of global oil majors. The Indian delegation was led by Finance Minister P. Chidambaram and Petroleum and Natural Gas Minister Murli Deora.
Source: IANS
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