 and we'll get straight into the debate. Let's welcome back for the second year and we're pleased to have him. Khalid Alfale is the Minister of Energy, Industry and Minerals, and if that's not enough, he's now the President of OPEC as well. Nice round of applause. Maxime Oreskin is the Minister of Economic Development at Russia. For Russia, again, that's the largest producer side-by-side with Saudi Arabia. Very pleased to have her. I actually had to go to Turkey to go recruit her because she was on a panel I was doing at the World Energy Congress. Isabel Kosher is the CEO of NG of France. And Fatih Birol is the Executive Director of the International Energy Agency, released a report today, which we'll talk about, one of the foremost experts when it comes to research in the energy space. Nice round of applause for him. And serving as our front row guest with great pleasure is His Excellency Mohamed Barkindo is the Secretary General of OPEC. I see a lot of friends from the energy sector, so I hope you're ready to take some questions. So even if you don't put your hand up and I see you, the only person I'll spare, because we had a good knockout fight yesterday, was the CEO of Saudi Aramco, Master Amin, who's getting ready for $2 trillion IPO in 2018. It's excellent to have you in the front row as well. Thanks very much. Before we get started here, in the concept of the sand to snow, bringing our kind of mindset of the Middle East to the mountains of Davos, shall we say, I've accumulated a few sound bites from our debate last week. His Excellency, the Secretary General of OPEC, is there. Let's listen to what we debated there, and we'll start our discussion after those clips. Let's go ahead and roll those. There was a convergence of views, a consensus that had been reached across industry, not only between us, OPEC and non-OPEC, but also IOCs and other stakeholders that there was now an urgent need to assist the market in bringing forward this rebalancing process because of the severe consequences of this cycle. I think they did a remarkable job putting forward the strongest statement possible to the market. But I have some concerns that if we get any wavering in terms of compliance, that there's so much bare sentiment wanting to come back in. We know that if we want to really rebalance the market, which means bringing back inventories to a more normal level, it will not take six months. This year coming back from 28 to 55, you know, it's positive outcome. But let me be clear, it's relatively silver. If prices continue at the $55 to $60 band for the next year, I would expect a much more aggressive increase in production in the United States than is currently being anticipated by the international agencies such as the IEA or the EIA. There you go. It's a pretty good selection there, including from the Secretary General finishing up with the US State Department. Amos Hoxstein is very bullish on the shale recovery that's going to take place. Minister Alfali, when we sat in Abu Dhabi just last week, you made some news, as they say, by suggesting that Saudi Arabia has brought down its production in the spirit of the OPEC-non-OPEC agreement with 24 countries down below 10 million barrels a day. That's the first time we've done that in nearly two years. How long is that level of production going to last? Do you think it's necessary to sustain that through the first half of 2017 or a willingness to carry that through out 2017 to make sure that this market not only rebalances, but that Saudi Arabia, the largest player within OPEC, is willing to lead by example? Well, thank you, John. You know, the commitment that we have made is for six months, and the six months versus a longer period was debated and thought about, and the market forces, supply, demand, were simulated with a number of scenarios considered. And we came to the conclusion that the most likely, you know, the most probable outcome, given the expected high level of compliance, is that the markets were rebalanced in the first half. This is a human demand pickup of 1.3 million barrels. And given the level of supply we've seen by year-end and the caps that have been established by the 25 countries that were around the table. And Saudi Arabia, as always, as always sets the example. Our compliance record is unmatched, but I think the difference this time is that the severity of the downturn over the last two years has led everybody who came around on December 10th from OPEC and OPEC to come on their own, fully convinced that there needs to be a collective effort, that this is not something to be done by one country or two country or even the 13 countries of OPEC. The reason we went outside and worked with 11 countries led by Russia as the largest non-OPEC producer is that this consensus has developed that OPEC alone cannot do it. Needs to be done for the good of consumers and producers. Our compliance level will be maintained for the entirety of the six months. The good news is that since the agreement in December, people started taking action. Then December levels are lower than November. The first two weeks has been very, very strong compliance. Going the extra mile, every country I have talked to has matched and the majority of them have exceeded their committed cuts. Some of them by a large margin. So I think compliance is good. Markets, of course, always have anxiety. As you mentioned, show me the money, show me the cuts. End of January is not far away. I think the numbers will come. But the transparency of data is not perfect, but it's far better now than 10 years ago or 20 years ago. There are monitoring agencies now that look at loading and production. Many companies who work around the world disclose their production levels. There is a very high level of data available today that shows that the first part of January has seen higher compliance than the commitment. And I think as this anxiety about commitment goes down, the market confidence and the quality of the agreement will improve. Fatih Birol, you put out, and I'm glad we did the panel today, your latest energy outlook for the International Energy Agency. And it said it's too soon to tell when this market will rebalance. The reason I ran that clip from Patrick Poignet of Total is because he is a believer who may take up to two years to hold together this OPEC-non-OPEC agreement before the market really rebalances or not. Where do you sit there as the Executive Director of the IEA? Thanks, John. Now, as Khalid said, we are seeing that the oil producing countries are determined to implement the agreement. And this is bought by the market. And we have seen prices increasing $55, $56, even $57. This is fine, but what we have been saying, anticipating another fact we should take into consideration, namely, what does this increase in prices mean for other producers? First of all, U.S. shale oil. We have released our oil market report today. And what we see is, John, December 16, December 17, an expectation of 500,000 barrels per day, half a million barrels per day increase in shale oil. Last year, 2016 was a decline, and 17 we see an increase. And a lot of oil will be put in the market. Number one, number two, if the prices remain at this level or higher, I wouldn't exclude that we can revise this number up in the next months to come. Even in 2017, more than half a million barrels. If the prices go up, we may well do it. Number three, it is not only the United States, Brazil, Mexico, China, Colombia, we may well see that they will react to the higher prices. And number four, and finally, talking about more oil coming to the markets, demands, because demand is also related to price, the higher prices may also put a downward pressure on the oil demand growth. We have seen in the United States, November, December numbers, they are much weaker than the rest of the year as a result of higher prices. So to sum up, a price increase is there, very visible, effects are there. But we also see counter-effects coming from the US and elsewhere in terms of production and maybe in terms of slower demand growth. Good, the demand growth that you're projecting now and your report today was 1.3 million barrels a day for 2017. Again on the upside in 2016 with demand growth on a daily basis of 1.5 million barrels a day. So this energy market remains much more resilient than many thought. You made a reference to Shale. I'd like to bring up our first graphic and I got this from Wood McKenzie who up-support us in terms of the production here. I wanted to go back to 2011 to show the audience where we came from. This is US oil production. It does not include the liquids. I just wanted to have comparisons, basically oranges to oranges, if you will. So going from less than 4 million barrels a day in January 2011, look at that peak above 7.3 per oil. Again, not mixed with fluids. And look at that steep drop down. We lost about 1.3 million barrels a day and the projection to go right back up by the end of 2018. Isabel Kosher, you're in the gas business. You have some oil production. How do you see it as a CEO of a global energy player, the elasticity in the market today? Is it impressive how quick producers can adapt in the world before you idle a project and it takes months, if not longer to get a project back on board? This redefines the supply of oil and gas, does it not? Absolutely. Thank you. Thank you, John. You know, paradoxically, it's much more difficult to predict the immediate future rather than the long-term trends. What impressed me, you know, being here in Davos and discussing with a lot of people and also during the conversation I can have as a lot of you in the room, with governments or players from the private sector is convergence. Convergence on the very long-term trends. Convergence, we could summarize saying a strong business case for renewables, a strong business case for gas, probably a move towards much more decentralized energy systems, meaning that the production will be for a significant part, some specialists say 50%, on the site of consumption. Convergence also to say that the electrification will progress, that is to say that vehicles, for example, which are used to be fueled by oil will be probably massively fueled by power in this case. And convergence on the fact that these trends are positive in terms of energy access, in terms of decarbonisation, etc. What is impressive is to see that at the opposite, the immediate future is uncertain and probably more than ever. And the discussion for the beginning of this meeting show that. And remember, the recent drop of oil prices you started the meeting with this point, which was not expected at all. Well, it's an incitation for all of us to be modest on our ability to predict the immediate future. That's my point, it's the paradox between long-term trends which are clear and volatility in the years to come, which is huge. And from this point of view, I believe that every measure to reduce the uncertainty, the volatility is good. Good for states, good for industrialists. And from this point of view, the agreement, the OPEP and some of other countries are available to reach is an extremely good news because it is part of an effort to stabilise the view in order to help us to make the right arbitrage. Maybe another point on another important issue is CO2 price. A big part of the uncertainty comes from the fact that we have no CO2 price scheme, not CO2, no possibility to really value CO2 savings. We all believe that it will come one day when, at which price, which kind of scheme it would also, as the OPEP agreement, really something important for all the players. Good. Maxine Rex, it's great to have you as the Minister of Economic Development. You're not Alexander Novak, obviously. The Minister of Energy has been collaborating with the man on your right. But I'm sure you're here with a message for this audience at the same time. The latest numbers show through December that Russia is still producing 11.22 million barrels a day. That's right near an all-time high. We've seen the commitment from Saudi Arabia from a peak in the autumn of 10.7 million barrels a day. Which commitment can you make today to suggest you really will hit this reduction of 300,000 barrels as a country to live up to the agreement? Well, the commitment that we did is unchanged. So we are fully compliant and we are proceeding with a schedule that was agreed. So no news here, actually at all. And for the market as a whole, the station that we see is that if you look at the forward curve, you'll see that it's flat, and the excess supply more on the short end of the curve, which is very important because it shows the sustainable state of the market. And in my opinion, there is almost no risk on the supply side anymore for the market. What type of risk should we discuss on the demand side? And mainly on what will be happening with the global economy. IMF has the forecast for this year of 3.4. It will mean that the growth of demand for the market will be strong. But if anything bad happens in countries like China, it will impact the oil market. But, of course, it will be not the oil market that will be impacted by such a situation. It will be a global economy that will be impacted. There's a different way to look at that price projection as you're making for the next three months in the futures market. We've been capped after a good 30% rally around $54 to $55 a barrel. It was the same thing before we sat down today. Minister Ofala, you correctly predicted we could get very close to $60 a barrel at the end of 2016. We're very close because we got to $58. What do you feel comfortable with in 2017 looking at where we are in the first month of the year? I don't think I was trying to be tricky. I was pretty direct. Too direct. Yeah, you know, it's always risky to predict prices of anything, but certainly oil is too unpredictable. Too many variables. Other speakers spoke about supply risks, demand risks, global macroeconomic risks. We have currencies and things of that sort. Then we have countries that have constraints that also have their own issues that could take us up or down. So these are geopolitical risks that we have no view on. But I think the broad lines that are driving this market are all driving it towards not only rebalancing during 2017, but as I have said earlier during the year 2016 are actually driving the market towards a shortage, not too long into the future towards the end of this decade, 18 to 20, depending on how much investment we have and whether there are any unanticipated disruption. And that has been one of the drivers. I think people are fixated on price as if it is price is an indicator and it guides the market and investors it impacts demand but really what I'm focused on and my colleagues in OPEC are converging on this is what we need to focus on is supply and demand and global inventories and this is our job this is what we should be paid to do and if we do it right the price will find its natural equilibrium. I can tell you if I want to talk about prices that if you look at the last quarter of 2016 prices were in the 50s we had already indicated that we're going to have an agreement but look at where the budgets for 2017 are there is still no not enough investment flows going into projects we hope that shale will recover to a reasonable degree and that it will contribute but it's not enough I don't lose sleep that shale is going to come and overwhelm us I don't think it will what actually we need is long cycle projects the projects that need 10 and 20 and 30 billion dollars that are going to be producing the 200, 300 and 500,000 because we have decline the existing base of 95 million barrels declines between 3 to 5% year on year that's 3 to 5 million barrels that goes away so we have to plow in hundreds of billions of dollars a year as an industry to just stay still let alone to meet the 1 to 1.5 million barrel year on year demand increase and we hope that unconventional US shale other unconventional oil will take part of that but it will also require massive investments it will also require a supply chain industry and a service industry that can maintain that growth and I would just caution that costs on the way down are going to be different from costs on the way up it's like climbing climbing up is a lot more difficult than walking down the slope so as we start climbing costs will go up prolific acreage that has been supported the resilience of shale will run out and we will see the inflation maybe not to the same level but we will see some of the inflation that we saw earlier this decade so as those cap to production is what you're suggesting I think it will be moderated by these forces this is just natural it's not a bad prediction that I am making but I think it is what keeps me focused that we have to invest in Saudi Arabia others have to invest in conventional oil and we have to anticipate that unconventional will take part of the growth and we will come to that what is the Goldilocks price where you don't invite deep water projects that start to flood the market today you never give up John I try not we've been in this band for four or five months between 45 and 55 do you feel more comfortable between 55 and 65 I think like I said we've been in the 40s to 50s and it didn't bring enough investments three digit range really brought too much investment flows that flooded the market so somewhere in between and it's going to be impacted by inflation currencies demand response things of that nature so I'll be a fool to give a narrow range but I think it's safe to say that it's somewhere in that range that's 200 that's a really really wide range for Goldilocks you can't even find the path going forward I was thinking the range of 55 65 I don't think you disputed that there you go Fatih Birol what is the sustainable price I'm trying to find out that keeps investment coming in the latest report projection for 2017 we'd see $450 billion go back into the fossil fuel sector if you will in 2017 a rise of 3% the first time that's risen in 3 years as His Excellency was suggesting it's not enough to keep pace with demand what is a good balance and before you answer that can we bring the graphic up I wanted to show the break-even price per barrel for a range of different producers around the world it's tough to see the bottom of the screen that $54 is for the majors in the center you see $46 a barrel that's for Russia, that's the different Russian producers and that one on the right is the Asian producers they just want to give us a global reach that would include of course China and producers like Petronas for example in Malaysia so Russia at $46 the majors at $54, this is break-even cash flow looking at the IOCs as well so Patrick Feune said something very prescient about four or five months ago from Total he said we know the pain of 40 we don't want to feel 40 again what is a range that sustains this level of production and as the minister suggested the level of investment as well if we can get this picture again please bring that to there the next one we just saw it means if this graph is right today all the oil in the world can be produced so we have $55 then this would be definitely not a good news for some of the producers here because all of the oil majors Russian, Asian, all of them can be produced with $55 now I have two important I believe points to underline here number one don't underestimate underestimate the shale oil reaction it may well be strong and it may well put a later on a downward pressure on the prices this don't underestimate it what does this mean the oil markets are very different than before we are going to see major volatility in the markets in other words we are entering a period of greater oil price volatility and what does this mean this means especially for some of the producers it is now time to diversify their economies away from oil only because oil prices may go down and their economies may be very vulnerable to those price changes we have seen emirates for example you were there John Saudi Arabia is making some reforms in the Saudi vision 2030 but first in the case of I would like to very much share the minister's views in terms of Russia this test if I may say so in the last years was not a very successful one in terms of Russia so therefore this should remind us this will tilt off the oil prices now and in the future may well be a reason to diversify the economies from oil and gas revenues and making much more broader this is number one number two number one number which varies a lot and I discuss this with my colleague with Mohammed and others namely 2015 and 2016 two years in a row global oil investments decline and it is the first time we see it in the history of oil and looking at the current plants of the companies it may well be the case that in 2017 we do not see a significant rebound maybe even a decline a third year in a row and what does this mean this may well mean that in a few years of time we may see a gap between demand and supply which could put all of us in difficult situation so therefore if there are no major investment in 2017 the alarm bells are ringing so these are the two remarks I wanted to make thank you Isabel are you investing in more projects now that you see not only this oil price but the gain in gas prices as well gas is an incredibly competitive market and you've got operations in 70 countries around the world are you going full steam ahead with investment or not at this stage yeah important to say first that this is a transition what we are speaking about at the beginning here it won't happen overnight and we try to manage it like that like a transition trying to be clear on where are the big spaces for growth and again we see big spaces for growth for renewable for gas and for distributed energy behind that you have again the socialized systems managing and storing energy also so in this transition pace the role of the industry and I'm here in one sense I'm the representant of the business the role of each industry each player is to find the best way to accompany the countries in this transition in this diversification of the economy and each player tries to combine with the cards he has in his own game and we have if I say now a word about NGE we have the incredible chance and that's the heritage I got from my predecessor to have well key competencies in all the domains that we believe will grow in the future and then we have made strong choices to align fully with our portfolio of activities on these new solutions solutions based on gas and gas which will be progressively itself renewable we work a lot on that it's a question of you speak about hydrogen for example which is a way to green the gas or biogas but gas is needed to stabilize the energy systems so gas we bet a lot on renewables every technology will be necessary we will need to gather regarding the resources of each country in some cases a lot of potentially on geothermal for example technologies in some cases a lot of wind and everywhere solar energy will I'm convinced of that play a big role in the future energy mix the future cocktail won't be the only part but it will be a big one so we bet on gas we bet on renewable and we bet on energy savings and local energy management systems let me follow up with you quickly my question is quite direct at this level in the recovery you've seen in gas prices which has not been as pronounced as we've seen in oil prices are you putting money on the table to the point of Mr. Barol's statement here that we and Mr. Elphale that we're behind the curve when it comes to investment do you feel comfortable as NG taking on new projects in natural gas at this level our media is not to be a gas producer or not mainly to be a gas producer or oil producer our media is to transform this resource in something which is useful for the customer and then the question for me is not this one the question is what are the fuels what are the energy systems that will be able to be affordable for clients and gas will be sure I'm sure of that because today already gas is competitive I don't know if you know that but to manage the eating of your home is much less expensive than if you organize this eating betting on power 35% less so gas is a competitive and a very flexible energy that the reason why it is part of our bets on the future not the only one it is a cocktail I believe in integrated systems mixing energies mixing solutions with a big part of digital because if we believe that a significant part of energy will be managed on site you cannot do that without having IoT without having a strong field of development for softwares so without having a strong data management system because you need to automatically balance the system real time I want to follow up on one other oil question I'm just going to ask the secretary general of OPEC Mohamed Barkindo in the front row he has a microphone on already this is a question that has come up and presented to me time and time again last week in Abu Dhabi and again here in Davos when will the 1.8 actually in cuts between the 24 countries of this crowning achievement as minister Novak called it of Russia be delivered this is why the market seems to be flat today when will all 1.8 million barrels of cuts be delivered in the first half of the year you're going into a meeting this weekend in Vienna with the monitoring committee for the first time what can you tell us going into the meeting about when will see all 1.8 delivered so there's full transparency thank you thank you Joan I think you have heard from the conference president himself on the level of commitment we are seeing from all participating countries in this new broad platform that we created on the 10th of December in Vienna the level of commitment and enthusiasm that we are witnessing being in regular contact he's also been in contact with his colleagues I think it's almost unparalleled in OPEC we've been around for quite a while we've seen several cycles it was the first agreement since 2002 I'm not being tricky I've been looking for a specific answer here there's a lot of discussion about people cutting the gentleman to my left has made his cut already surpassing the 486,000 barrels he promised the duration of this declaration of cooperation is six months that took effect two weeks ago on the first of January and the roadmap is the adoption of a mechanism of compliance which the joint ministerial monitoring committee will hopefully do on Sunday this weekend in Vienna based on which they will ensure compliance beginning from next month and the averages for the six months will reflect the almost 1.8 million combined OPEC non-OPEC that would be adjusted from supply so it's work in progress the building blocks are being put in place but the level of commitment it's very high great I appreciate the candor I want to spend a few minutes if we can here on the kind of giant elephant that didn't show up to Davos that would be Donald Trump I think it's pretty fair comment I think there's an inauguration tomorrow that's taking place it has implications for the energy market it has implications for relations with Russia and also from President Obama himself suggesting that the sanctions that are in place in Russia already should be maintained that Russia needs to prove it's a common player in the global community your thoughts on this last shot across the bow to Russia before Mr. Obama vacates the White House there was actually a question also on the Russian economy so we will try to mix both of them so the reason why we're not performing that well in the past couple of years is that in the late 2014 we've decided to fully adjust to a new environment for a country to low oil prices to sanctions total shock to the balance of payments of Russia was 13% of GDP and we've adjusted to it fully so if you look at the results of 2016 with oil at 40 we have a positive current account we have small fiscal deficits so sustainable state of the economy so it also means that we have not only adjusted to a low oil prices but to sanctions so what we prefer to do at the moment to concentrate on our own problems our structural stories within the country we're not thinking much about the sanctions you're not thinking much about the sanctions do you expect that Donald Trump would be he's already said he would like to work with Vladimir Putin this is one of the is one of his first measures as president the first quarter of his presidency to lift those sanctions so he can work with Russia and what do you expect from Mr. Trump tell us I expect that he has a lot of Twitter's Twitter feeds and I'm sure he keeps CNN in his sights he's tried to rename his last week so we have to be on our toes as they say so we'll see what we'll be on the agenda you think it's possible though that the I don't know it's too early to predict that yeah very good a question for his excellency Mr. Alfala there's pretty outlandish proposal on the table about putting a tariff on imported oil into the United States that would be pretty radical do you think he's bluffing because he want better cooperation with the major oil producers like Saudi Arabia in Russia in the world how damaging would that be to relations between the United States and Saudi Arabia the US is the largest market for oil and gas it's also a significant producer of both as well as other energy sources everybody knows this it is the most integrated market and economy across the world through trade through technology development the US companies are the most international and they're present around the world a lot of wealth has been created globally and domestically in the US through integration in the global economy and the US is the champion of both capitalism and globalization but the US leadership is always looking for new formulas to create more value and you hear a lot of proposals but ultimately I have confidence that what will happen in the US is will be the right thing will be the right thing for the US partner Saudi Arabia has been a key partner of the US in trade energy for sure despite all of the transformations that we have talked about rising production in the US efficiency markets in the East rising we remain the number two supplier of petroleum to the US second only to Canada we supply more to the US believe it or not then we supply to China despite all of the mega trends on both ends and I believe policymakers and decision makers and congress ultimately will do the right thing I think they're looking at a host of reforms including tax reforms and so on and so forth one comment on this specific and I haven't studied it so I have to be very careful that's unusual you read pretty much everything as a minister of three agencies right minerals industry and oil you're pretty wide brief we all know that the US has a very strong downstream industry and as I mentioned we are a big exporter in the US the US continues to import millions of barrels of crude oil that's not going to disappear so any tariffs on imported feedstocks into the US is going to hurt the competitiveness of these industries the US also exports a lot of products out of its refining processes and petrochemicals so if you increase the cost of imports into the US economy the competitiveness of production coming out of the US I'm sure again that's going to be taken into consideration and as I mentioned there are a lot of smart people within the Trump administration and team and ultimately we have confidence that they will do the right thing ok follow up on another important issue Mr. Trump has suggested he would tear up that agreement within the P5 plus one structure with Iran Fati Biroh would that be a mistake to take Iran out of the umbrella out of that context of keeping them in with a dialogue here they've made a recovery of oil production up to nearly four million barrels a day after sanctions is it better to be confrontational with Iran as you see it for the United States or to be more collaborative it's a mistake to ask this question to me John so I can tell you that as an international civil servant it is definitely something beyond my immediate profession but of course Iran like other Middle East countries is a very important producer and I would like to tell you a few things about U.S. versus Middle East in terms of oil now yes U.S. oil production in my view will increase significantly but let's do not forget U.S. is still today a significant oil importer why Middle East is so important is that because Middle East is a major oil exporter feeding China feeding Asia India other countries so therefore U.S. oil production increases significantly U.S. will never replace Middle East as the oil exporter Middle East is and will remain the center of global oil map for many years to come so for therefore we have to watch what is happening in Middle East carefully and hope that oil industry, energy industry, geopolitics all go smoothly in a positive sense this is a point that we also understand but second point are natural gas but we should also talk about natural gas as well in terms of natural gas U.S. will be a major exporter LNG coming from United States and Australia will change the dynamics of gas markets and therefore there will be strong competition between pipeline exporters and the LNG exporters and this will definitely be good for the gas importers because competition is always beneficial for all of us and we shouldn't also forget you talk about the climate change a few minutes ago gas can play a positive role in terms of reducing the emissions if it replaces coal as we have seen in the United States reduction in U.S. emissions as a result of gas replacing coal Iran has the largest gas reserves in the world they're just rubbing up so your argument is probably to keep engaged with Iran I know the political sensitivity of it Isabel Koshera a very quick answer if we can here do you worry that Donald Trump will get the United States out of the COP 21 agreement to control the pace of climate change I spoke about uncertainty volatility of course the election of Donald Trump from this point of view is an additional question if the question is should it be a risk to see this megatrend the scenario transition really happening I believe that the answer is no for several reasons maybe I could mention too the first one is that this megatrend is sustained by very strong interest and we could take the example of emerging countries imagine for sub-Saharan African country for example for some of these countries they are obliged to fully import from outside their energy resources to fuel their growth and suddenly they see a new potential which is on their own territory which is the wind, which is the geothermal which is solar and which is in fact the growth without increasing the dependency so that's a key trend of that key interest that will in my view but make this trend absolutely impossible to stop if somebody would like to the second reason is and it is affordable again economically speaking it makes sense it will lead to a decrease of energy prices so you're suggesting we've come so far along on the climate change agreement that even if the US stepped out the momentum would be to continue with those policies yeah in my view yes I don't know if it could have a small impact on pace but not on the final goal I don't believe plus the fact that if we believe that part of the system will be decentralized the decision will be made by the states and more and more by cities by industrialists even by citizens in some cases so I don't believe it can be really a risk but a lot of questions I agree okay let me pose a final question here and then I'm going to take some questions from the floor for five minutes Javed Sarif the foreign minister of Iran was suggesting that Saudi Arabia and Iran can cooperate on many fronts in the future it's not as confrontational as people think you and I sat down for an interview in Istanbul at the World Energy Congress and at the time you had suggested and even back at the OPEC meeting when we sat down together in June of last year that Saudi Arabia and Iran can collaborate when it comes to energy I think you did set the example that you could find a compromise before you took over as minister we had a big showdown in Doha the previous minister left there was no agreement tensions between Saudi Arabia and Iran as it advanced now to a stage when it comes to business and regional stability that the two can work together well first of all I don't think it's right to characterize not reaching an agreement in Doha as a Saudi Iranian thing the conditions weren't right at that time where everybody came to the consensus we were able to reach by November of this year OPEC as we like to see it is apolitical it's a grouping of companies that have a common interest in stabilizing global markets bringing supply and demand together and reducing the volatility and uncertainty that Isabel has spoken about from an industry standpoint I know the consumers, the airlines transport companies petrochemical companies lose sleep and some of them lose their well-being because of the unpredictability of energy markets individual consumers also when they're buying appliances or cars they're making a bet on where energy price is so we have that responsibility to mitigate this to the maximum extent possible and we're willing to do it with everybody we've been able to do it with Russia Russia is an outside member of OPEC but we've had very strong alignment despite the fact that we've had our differences on some issues like Syria and elsewhere likewise Iran is part of OPEC if I'm not mistaken Muhammad OPEC and we'll be willing to work with them and long term I want to reiterate what my leadership has said and what people who run Saudi Arabia's foreign policy have said we have no problem with Iran the nation we have no problem with Iran the people Iran is in the Middle East to stay and we want the day when we have no barriers of collaboration with Iran whatsoever and we hope that they will migrate and quickly get to that state where we can work with them like a brotherly Muslim state and find common platforms to cooperate and collaborate in many other fields and if working together with OPEC leads them to change their behavior into that direction then we welcome it but I have to also say that there are big problems that we have to do is back his words with action and when we see the turmoil and the suffering and the tragedy in Syria we see what's happening in Yemen we see what happened in Bahrain before with interference and elsewhere in the Middle East and Lebanon we question these statements so we hope to see action that will demonstrate the real intent Thank you for the candor a final question to minister Arreskin Vladimir Putin moved very quickly strategic partners in the Middle East one being Turkey the other one Iran reengaged Israel we've got all kinds of new alliances here would it be a mistake for the Trump administration to you once again about Trump we're talking about the energy market not about Trump, it's a different panel I agree let's get to the questions that was my question good let's take one or two questions from the floor we have one there if we have a microphone handy again I ask for brevitys second hand and we'll have to wrap it up and one here in the second room my name is Hadi Fatahallah member of the global shippers community from Erbil Iraq my question is to the two ministers what's your plan B if prices don't go up will you flood the markets and the second question is if I mean why did we go all through this trouble if we don't have this major impact or direct impact on how PLATS calculates the Brent benchmark so why do all this maneuvering if there is no direct effect on the price benchmark calculation thank you it's nice to see somebody else have to ask these nasty questions it's all yours I think plan B is to be resilient and to be flexible and to deal with the circumstances certainly there are many variables that we can't predict so somebody talked about a potential demand collapse you know geopolitical macroeconomic impact we'll have to react and there has been times in the past where OPEC has taken one action and then a few months later found out that that action was not sufficient and followed up with another action we will not exclude that that's why we're meeting again in May are you suggesting that potentially if needed would do embark on fresh cuts if needed absolutely if what we think is probable takes place I believe that it will not be necessary so we're flexible adaptable, resilient resourceful all of these good words this is part of the theme here here in Davos as far as blacks and benchmarks I think these are important but they're small in the margin the absolute price is the absolute price what the market can afford and what will bring supply and demand how you assess it is in the small number of cents versus the absolute base I don't want to read too much into your words I don't want to be very careful but as an organization the players within OPEC at least are you open to take that agreement for the entire year if you find it necessary in the market the agreement you have on the table we've talked about that and that is in fact it was one of the options and again when we when we modeled the impact on inventory of implementing the 1.8 we were going to cross into the five year average so why extend it? extending it would create a shortage too early which we don't want to do our intent is to balance the market not to create a shortage but if we find out for reasons we don't know yet that it's not enough we will do what's necessary just a small addition to that I have to go back to a question on Donald Trump if you don't mind right off so on this story the market is long-term sustainability and sustainable development we do not want high oil prices we want sustainable oil market developments in terms of our country in terms of our domestic situation we're of course ready for any kind of scenario we're living pretty well at 40 your break even a couple of years ago was $80 a barrel you got it down to 40 so there's been a lot of adjustment and pain for Russia but you actually went through the exercise quick question for Mr. Janihi in the second row sorry I can't take more questions because of time it's very refreshing to see to see Saudi Arabia's 2030 in motion you've got three portfolios you've just proven to everybody you can take the foreign policy on your board too so after that compliment I've got a question we are talking about Aramco going public or an IPO for 5% of Aramco coming to the market within 2018 or something like that so the question is all about valuation then the IPO issue the Vision 2030 was based on a $30 outlook so from a valuation perspective as you said you do your exercise you do your homework so where do you see the valuation gaps since 50 to 100 but where do you see the valuation of Aramco how much north of $2 trillion or how much lower than $2 trillion thank you very much good question because you need a certain baseline for that valuation of $2 trillion people will not buy into Saudi Aramco stock because they have a view of what the price is going to be 2017 or 18 or 19 you buy equity into a company because you want to buy that equity for decades to come and Aramco is going to be around for generations to come given our almost unmatched certainly unmatched almost unlimited access to hydrocarbon resources so people who buy into Saudi Aramco will buy into the quality of the company its ability to create value and that value will depend on the long term value that one has for oil and gas and I go back to what Isabelle said the world is going to need a mix of oil and gas for generations in addition to all of the other energies the one we know and the ones we don't know we're going to need all of them and every drop of oil and gas will be produced initially mostly as a fuel but in the long term as a source of petrochemicals and material science and people who will buy into the largest resource base has to have a view that this is going to appreciate value over time and whether it reaches its ultimate valuation in terms of the market price in 2018 or 2022 is immaterial for buying for decades and generations so I believe Aramco is the greatest and of course you can accuse me of being biased but it is the greatest company in terms of capabilities and execution and it has this wonderful resource that will go into the trillions of dollars as its value into the global economy appreciates Final point because I wanted to ask you earlier you thought it was important to highlight investment of up to 50 billion dollars by 2023 in renewables many were shocked because of your vast reserves of oil why now in this lead up to 2030 and that broader vision you made such a bold statement well we're vision 2030 is about diversifying the economy but it's also about diversifying our energy sources and diversifying means that we're going to add multiple engines to the Saudi Aramco to the Saudi Arabia economy and one of them will be new industries that we don't have one of those industries will be renewable so and at the same time we want to maximize from that first engine that has sustained us for so long so we want to save the liquid resources that we're burning in the kingdom and make them available for the long term for export we're bringing 70% of our fuel into utilities will be gas the other 30% will be primarily gradually going into new energies the first phase is this investment 50 billion that I talked about in Abu Dhabi which is renewables of different sort but primarily solar and wind and it will be followed up by others there will be a nuclear program for power production purposes that will follow and do course and there will be more renewables going forward and Saudi Arabia is going to have every viable energy source and its energy mix we're also hydrogen we're looking at other energy sources will produce them sustainably and ultimately we aim to export them to the rest of the world let me thank you all again Khaled Al-Faleh, Maxi Moreskin Isabel Kosher and Fatih Birol a nice round of applause for the panelists and thanks for coming today