London — The head of the Gas Exporting Countries Forum, Yuriy Sentyurin, said June 22 that he considered OPEC a “model” for the gas exporter group’s activities, hailing the first technical dialog with OPEC as a “new chapter in our collaboration.”
The GECF — whose members include gas heavyweights Russia, Qatar and Iran — came into being in 2001 and holds around 70% of the world’s proven gas reserves.
Over the past decade there has been speculation that the GECF could morph into a “Gas OPEC” with the power to manage markets through supply intervention, but the group has so far ruled out coordinated market management.
Sentyurin’s comments June 22 came in light of the COVID-19 pandemic and subsequent severe drop in demand for both oil and gas.”Maybe now it’s high time that the gas and oil industry implements the knowledge and solutions of the oil industry. To use the best practices demonstrated by your community,” Sentyurin said in a statement.
Sentyurin said that he saw OPEC as a “model” for GECF activities, and that the GECF had benefitted from an “ever-strengthening exchange between officers of the two organizations.”
Sentyurin met with his OPEC counterpart Mohammed Barkindo by teleconference June 22 for the inaugural technical meeting of the OPEC-GECF Energy Dialogue.The meeting built on the bilateral memorandum of understanding signed by the two groups in October last year.
Barkindo briefed Sentyurin on OPEC’s recent oil production cut decisions and spoke about the “great many things” the GECF and OPEC have in common, including many of the same member countries.”I believe there is a great deal that we can learn from each other,” Barkindo said.
As recently as January, Sentyurin told S&P Global Platts in an interview that there was “no intention” among the members of the GECF to engage in coordinated market management during periods of low prices.
Instead, Sentyurin said at the time, the gas market tended to return to balance by itself, a reference to the “boom and bust” nature of the market.However, that was before the coronavirus pandemic and the resulting impact on demand and on prices, which have fallen to record lows globally.
GECF countries accounted for an estimated 1.75 Tcm of marketed gas production — or 44% of the global total — in 2018.Algeria, Equatorial Guinea, Iran, Libya, Nigeria and Venezuela are members of both organizations, while OPEC member states Angola, Iraq and the UAE are also GECF observer countries.
Qatar was a member of OPEC, but left the group at the start of 2019.Other than those also in OPEC, the other GECF member countries are Bolivia, Egypt, Russia, and Trinidad and Tobago.Azerbaijan, Kazakhstan, Malaysia, Norway, Oman and Peru are also GECF observer countries.
Up to now, the GECF has been tasked with keeping track of global gas market developments and promoting the use of gas across the world. Under the October 2019 MOU, the GECF and OPEC agreed to enhance cooperation between the two bodies, mainly in the area of sharing market data and knowledge.