 afternoon. Welcome. It's nice to have everybody back for the annual CNN roundtable. We usually have a chance to focus on the emerging markets of the world, but because what has transpired in the last year, we thought the new energy equation would be more apropos for Davos 2016. I can see a lot of familiar faces into the audience today. Some who work in the industry, and I'm sure those who work in oil and gas would like to, what we used to do in our business before we went to digital, hit the rewind button and take the clock back a couple of years. January of 2014, Brent was trading this week at $107 a barrel. In Davos 2015, oil was down at 50 and people started to get very panicked. And then Davos 2016, who would think that oil would lead the headlines and bring equity markets lower? And we look at a price of Brent between $28 and $27 a barrel. So one of the big questions, of course, today is how low we go before we find stability. But we've had a perfect storm, if you will, in the last few years, which has hit a full crescendo as we sit down this afternoon. Kind of four key factors behind this perfect storm. First and foremost, we've had a change in Saudi Arabian strategy, which I covered at the OPEC meeting in November of 2014, not to be the swing producer of the world, but instead to go for market share and let the best producers survive. Number two, a shale revolution in the United States, adding five million barrels a day. We've seen some of that come off, about 600,000 barrels in the last year. How much more of a correction will we see in 2016 because of $28 to $30 oil? Number three, we'll hear from a panelist this afternoon, Russia pumping in nearly 11 million barrels a day, going for all-out fight for market share regardless of price. And then what I like to say is the big question mark over the market in 2016 and why we've seen so much dislocation in the equity markets, I believe, this week is the role of China in demand. Many people are overlooking the fact that China imported better than seven million barrels a day in December. But many are wondering, we're going to see a dramatic slowdown in China in the second half of 2016. You hear the words transparency called out, are we really growing 6.8, 6.9% in China and what impact that will have on energy? And I don't want to leave out renewables as well because we see investment in renewables in China and elsewhere and is that finally competing for fossil fuels in the oil and gas market. I don't think we could have pulled together a better panel to be really candid. I'm really, really happy what we were able to do today considering the news that's in the market. I'm going to give a round of applause for each one of our panelists when we bring them up. First, I'm going to call them in the order that we have them lined up here. Let's give a warm welcome to Khaled Al-Fale. He's the Minister of Health and the Chairman of Saudi Aramco. It's nice to have him here. A very familiar face to the Davos community, Daniel Juergen, Vice Chair of IHS, the author of The Quest and also the seminal book that I read, Understanding Energy, The Prize. Daniel Juergen. His Excellency, the President of Azerbaijan, Ilyam Aliyev, joining us here on center stage. Dr. Emmanuel Kachikou, the Minister of State for Petroleum for Nigeria, and the exiting, rotating President of OPEC as well. A familiar face to the emerging markets round table for CNN and back on Energy. His specialty, Professor Limbo Zhang, the Dean of the Institute for Studies and Energy Policy at Xiamen University in China, of course. And Kareel Dimitria, of the Chief Executive Officer of the Russia Direct Investment Fund, a $10 billion fund which is now worth $25 billion, even in a down market. Lots of attention and warm regards. Welcome, everybody. So what is going on with oil? Question. Good question. Let's start with His Excellency, the President. If I was going to ask you that we'd be testing $27 a barrel for the benchmark Brent, you probably would have thought I was drinking the wrong stuff and not water or a tea this afternoon. Tell us the surprise you have at the price that we're seeing today and how do you plan for the future if price is going to be going even lower than we see it today, Mr. President? Well, it's difficult to expect the price going lower, but having this situation today, we will not be surprised if it happens. Of course, we were not prepared for that. We in Azerbaijan were preparing ourselves for so-called post-oil era in about 20 years from now. Therefore, for us, it was a surprise. And at the same time, it was a stress for our economy, because we already planned our budget at a level of $50 this year and $90 last year. So we had to cut our expenses, our investments, and keep the social package in place. Our economy is stable and sustainable. We have large reserves in our sovereign wealth funds. Therefore, we can compensate the situation. But if the situation continues for longer, of course, it will be a big pressure on our budget. Knowing the production situation as we see it today, or the overproduction that we see in the market, Dan Juergen, is this price justified today? Because we saw the IEA report suggesting an overproduction of about 1.5 million barrels a day. Well, I think a founder, I think it was Royal Dutch Shell in about 1950, 15 was asked, what's the right price of oil? And he says, it's whatever it fetches in the marketplace. And so this is the marketplace is saying this, but there is an oversupply and the question of demand that's overhanging at the same time. So there's two things coming together. And as you suggested, this is an unusual situation, because the price of oil is walking arm in arm with the questions about the Chinese economy. Good. Let's answer the big question, though, first, and I'll bring in Khaled Al-Fali as well. What are you banking on as an average price for 2016, knowing that this location we're seeing in the first three weeks of 2016 here at Daba? I don't think I would give an average price right now. So. Okay, do we have prices go lower? Well, no, I think we're in a state, it's interesting now that if you look at both the oil price, and you look at all commodity prices, when we look at our indices, they're all back to where they were in December 2003, before the super cycle began in commodities. Indeed, if you think about it, some people here will remember the OPEC price band of $22 to $28 a barrel. That's kind of where we are right now. Khaled Al-Fali, you have to plan for Saudi Aramco, needless to say, in addition to other plans you have for the group. What plans do you have for pricing going forward? It's a big question mark that people are wondering how Saudi Arabia plans with the strategy that implemented. Well, Saudi Aramco as the company in Saudi Arabia as the nation, we have the most resilient capacity within producers to take whatever the market serves us. If prices continue to be low, we will be able to withstand it for a long, long time. Obviously, we don't hope for that, but we're prepared for it. We have the lowest cost production in the planet by a big margin from our next competitors. And our investment program is well financed internally, so we're able to continue to maintain and even grow capacity in oil and gas without having to borrow. Saudi Aramco essentially has zero debt on its balance sheet. The price itself is a rational, if you ask me, because prices are supposed to be set by the marginal barrel. The marginal barrel is certainly way higher than $30 a barrel. But in the short term, while there is excess capacity, prices are set by variable costs. And most producers are able to pay the cash cost within the current price. So if the market continues to drive prices down, you will see some producers exiting simply on not being able to finance their short-term operating costs. We don't hope for that. I think the market will need all producers in the long term. There is growth coming up, a million barrels or so, at least, year on year. And that, of course, in addition to the decline of conventional and unconventional production, that will take place. So in the short term, it's a very bleak picture with the overcapacity that you mentioned. But in the long term, I think we need current producers and we need to invest the new capacity to be able to meet demand. What would you suggest as an average price for 2016, knowing the dislocation we see today, sir? I would not risk my reputation and give a price. I do feel though that where the market has overshot on the lower side and that it's inevitable to start turning up. Where will we be by year and I don't know, but certainly I would bet it's going to be higher than where we are today. Yes, John, you have to divide that year in half, the first half and the second half, first half lower, second half somewhat higher. Okay, very good. Let's go to a Russian, the Kareel Dmitriev, and then I'm going to bring our other two guests in. As I mentioned in my opening comments, Russia has taken a very distinctive view here, trying to produce as much as possible, nearly 11 million barrels a day in December. You're fighting for market share as a country. I know you run the Sovereign Fund here. What is the strategy to go all out to get what you can in this sort of price climate? Well, first of all, I think we are not the only ones. Obviously, other players are going very much for the market share. And when lots of people go for market share, you have declining the price, which we are seeing. But the good news is that the world still needs energy. You know, 80% of energy needs fossil fuels. So we believe that, obviously, oil prices will stay low for some time. And there is a trend that the growth of the economy requires half as much energy as 10 years before. So there is a long term trend to have fewer part of growth require more energy. But we also are cognizant of the fact that $400 billion of projects were delayed in cupex. And people are really not investing as much as they were before. So we believe that next year, oil price should be more stable. And a prediction you're asking for prediction is 57.95 a barrel. And that's a consensus of 31 analysts asked by Reuters, not my prediction. That's not the Russian Not for this year, for next year. For next year, I was going to say, that's quite a bet from 28 to 57.95. I wouldn't take that bet, by the way, at this stage. A couple of question marks that we raised here, Professor Lin, it would be good to get your thoughts about demand in China. Nobody seems to believe the growth scenarios that we see in China today, and whether realistically China is holding above 6% or not. And where's this demand coming from crude? I suggested it was 7.4 million barrels in the month of December being imported on a daily basis. Right. I think that the imports are still very strong on the oil side. But the demand is a bit weak. I think that some are going to the strategic reserve. But what made China so interesting? I think in two reasons. One, China is big, right? That's everybody knows that. The other one is dynamic. It comes up very quickly. And most go down very quickly. And that created a huge impact on the international markets. I think that what China's impact at this point is not on the oil side. Because the demand in the oil, as I said, together with imports is still very strong at this moment. What is important? What is the problem with others? We typically count for probably 50% of the cement, steel, coal production in the world. The demand is peak at about 2011. 2012, that's down. 2013 is very good. But suddenly on 2014, it's almost not there. This year is a crucible negative. Electricity demand is roughly 0.5%. That's why some people are questioning why the GDP and the energy is such a wide gap. I'm not defending which number is correct. But such a wide gap is possible in China. The reason for that is the energy is so concentrated on the industry, particularly heavy industry. Heavy industry consume typically more than 60% of the energy in China. And those guys are very sensitive to economy. Economy is not good. And they come down a little bit. The huge impact on the energy incremental in China. So that kind of gets possible. In fact, look at US history. There's also some gap there. It's quite large between the GDP and energy. So having said that, I think that China's demand will come back. This is a very difficult time for transition. But China is still in the process of industrialization. What is no point to compare New York with Beijing? What needs to be compared is, for example, a town in China, compared with a town in Europe or in US or in Japan. So in that sense, the infrastructure development is still enormous. The need is still enormous. So when China's demand comes back, I think that the body looks better. Because the size of the of the demand and also the size of the economy. Good. What are you projecting for growth GDP growth for China going forward? Because nobody really seemed to believe this number of 6.8 6.9%. Even though it was the slowest in 25 years. Well, the Chinese government tried to double the income by 2020. That's between 2010 and 2020. If there is a case that they have to maintain 6.5% growth for the for China's in the next five years. And that's in the five years of prime. And that's realistically doable is what you're suggesting. Well, if the if the transition comes shorter, that's that's realistic. That can be done. Okay, let's bring in the Minister of State for Petroleum from Nigeria. We had a chance to see each other in the UAE recently. And you'd mentioned some of the pain that this low oil price is causing. How much dislocation is it causing in Nigeria? When you're break even costs for productions about $30 $31 a barrel? Give us a sense how you see the pain applied to Nigeria at this stage. Well, first, there are two areas of production. The low and shallow water productions are less than $13 a barrel. So obviously, the reason we'll demand that you need to emphasize growth in those areas as opposed to grace growth in the deep offshore, deep offshore is where you have the 34, 35, 36 type dollar per barrel. A lot of dislocation, I think similar to every other producing country, because even the wealthiest are suffering some dislocation from this also. But probably more intensive units expect a typical country, obviously to have lots of his oil income over the years represented either in infrastructure or reserves. We don't have a bit of reserves, but we don't have as much as we should. Infrastructure has been very well developed. So this does hit us quite hard. But having said that, what has happened, we've also come to find that the Nigerian economy itself is a bit more resilient than we think. We're emphasizing on areas of diversification, collection of income locally taxes, only about 225% of Nigerians currently on the taxpayer role. So we're doing a lot of work in that area. And we're beginning to look at what this is doing for us is beginning to look at least in the oil sector in terms of cost. What is the cost of production? How can we do something better? And there's a collaborative effort between us and the oil companies who are working there to see how can we begin to review projects, review production and see how we can get that done. Funding has been a problem. How do we address funding through alternative sources of finance? So bad news, but definitely opportunities on the upward side in terms of what you can do in the short time period. But we're amongst those who are very optimistic that 2016 and ultimately, we're better priced. Okay, you think it's going to be a better price? What drives that a better price? Is this the washout in the US shale production or the higher cost projects being canceled as Corille was suggesting? Definitely US shale is key. And if you look at the numbers that are coming off there, look at a place like Texas, for example, and what impact is having, it begins to see that there's a lot of drop off in terms of production there. Different from that, there's a natural decline in any way in production. If you do not invest to replace oil, you're going to have a natural decline, usually about 3 million barrels per day on the average. With the sort of investment approach you have right now, that is not being replaced. So you add that to the shale environment, and you add that to the natural attrition that is going to happen in the marketplace. You're going to see quite a lot of barrels leave if things continue at this end. One group that hasn't been mentioned, indeed the oil producers. At the end of the day, there must be a bottom line point at which production no longer makes sense for them. And I'm sure they're also going to be sitting together to say, what are we going to do about this? For some, you can survive at $20, for some, you can survive at $10, but very many are going to start dropping off the ball very, very rapidly. And at that point, I think that's going to be the alarm and clarion call. Well, in fact, there was a bit of alarm bell last week when we saw the Wood McKenzie report suggesting nearly $400 billion of projects between 2016 to 2020, some 68, mainly deep water projects getting canceled. That was a good number. Our number for the all upstream projects is $1.8 trillion lower than would have been expected. $1.8 trillion, okay. Over what period of time? 2015 to 2020. 2015 to 2020. Compared to what was expected in 2014. Okay. So it's about a 40% fall in what had been expected. Okay. So this is going to boomerang on this market where we're seeing a really deep correction leading to a boomerang right back up again in two to three years. Go ahead, Professor or Dan, sorry. Oh, sorry. Yes, I think that, I mean, this, we have to remember these markets move in cycles, whether it's a really big boomerang or not will depend upon other forces. But, you know, it's postponed, delay, cancel. And as already said, you have an, you know, you need to replace your inventory. Okay. This would suggest that the Saudi Arabian strategy that was introduced in November 2014 by the Ministry of Petroleum in Saudi Arabia is going to pay off. It's a fairly, fairly painful transition. But is this going to work in time to Saudi Arabia's favor? Well, you mentioned in the beginning that Saudi Arabia changed this strategy. And I would take exception with the Saudi Arabia really has never advocated that it would take the role of balancing the market against a structural long-term imbalance situation that was emerging the last two years. We have played the role of sort of the reserve bank of the global oil markets stepping in when they were short-term events, the equivalent of the big financial crisis a few years ago or the Asian financial crisis in the 90s, disruptions because of natural events or civil strife and one producer or another. We've always stepped in. What was happening the last few years is a structural divergence between supply and demand. We were starting to see reduced demand, a million barrels or so. And there were a host of other producers. Each one of them was aiming to produce a million barrels a year. And that was just not going to be sustainable. Saudi Arabia was to assume a role of balancing the market under that condition. We would literally be producing zero today, starting three or four years ago because the expensive oil would have continued to grow at more than a million barrels plus other production coming on. So it was inevitable to let the market itself balance supply and demand. And that's what we simply allowed to do, which is the market place doing its thing. If you look at the pain measured by dollars in terms of how many barrels are exported into the marketplace, Saudi Arabia has experienced the highest degree of pain in terms of financial penalties. But on the other hand, we have the highest number of reserves, 20% of the global reserves. And it's in our interest that the long term value of our resources maintain their position in the marketplace. So balancing short term with long term is what the Saudi Arabian strategy has been all about decades ago. We will continue to do it. If there are short term adjustments that need to be made and if other producers are willing to collaborate, Saudi Arabia will be also willing to collaborate. But Saudi Arabia will not accept the role of, by itself, balancing a structural imbalance that is happening today. Okay, you're raising a very excellent point. I'm reading between the lines here. Collaboration and cooperation. We've seen conversations take place before the OPEC meetings in Vienna with Russia attending some other Central Asian players, Mexico participating. Isn't it high time that you see the fabled OPEC, non-OPEC cooperation take place? It's almost like you're welcoming other collaboration. Well, I mean, looking at the equity markets today, even in Asia, which is a net importing region, everybody is concerned about unreasonably low prices which we are experiencing today. So it's not a matter of producers wanting to realize higher revenue. We need a stable price so that you can invest, the kind of investments you need to replace natural decline. We produce one of nine barrels that are produced around the world today. And we cannot accept a higher share of balancing supply than our pro-rata ratio. So other producers would have to come forward and offer to themselves, contribute to balancing the market. And Saudi Arabia, as usual, will be interested in bringing prices and supply and demand imbalance to a level that meets the interest of producers and consumers. Who's going to blink first here? Well, I mentioned in the beginning where it's not a matter of blinking. I think it's a matter of what is in the interest of all. And Saudi Arabia has the most to gain by a stable market and we will continue to advocate. Okay. It's a good time to bring in the Minister of State from Nigeria. You bluntly said when you were in Abu Dhabi, it's time for an emergency meeting and you're not alone anymore. There's three other producers within OPEC, within OPEC itself, suggesting that it's time for an emergency meeting. Do you think there's going to be a rallying call to actually not just call a meeting, but to take some production from the market from OPEC to send a signal to other non-OPEC producers? Well, I think what is important is if you look at the trend that certain areas in which we all agree. One is that the price today is not the right price and shouldn't continue for too long. Two, hopefully that in 2016 some level of not worth movement on pricing will occur. How much by how much nobody's really setting and nobody's ready to take a bet on that. Three, that OPEC members by themselves will not bring the needed change in the market unless there's a cooperation with non-OPEC members and on that we will largely agree due respect to the divide. Where you have disagreement is Saudi Arabia's position obviously that look we shouldn't we should just let market forces dictate the direction. And the other OPEC members believe that there's a need for us to come back and traditionally do what we're known to do all the time, which is trying to give a leap to the market. The difficulty of course that at 35% production levels which is what OPEC holds, even if you pulled out everything that we have, you may not necessarily cause a major, a major change in the market especially when others continue to produce. But I think what is important is to continue to emphasize the fact that this is not the right price of oil. At this price, there's going to be so much lack of production that very soon it's going to be a cyclical thing. So we suffer right now, but ultimately the consumers will suffer because then the production is sold down, the prices shoot up right back again to 100 and something. So you're going on topsy-topsy-topsy movement. So I think what needs to happen is that two blocks need to talk. The non-OPEC members and the OPEC members need to talk and look at what is the future here? What are we trying to accomplish? What has been the difficulties that everybody is going on their own tangents without anybody talking to one another? And I think that is probably where OPEC comes in. OPEC, I have said personally, Nigeria believes that OPEC needs to meet, whether you call it an emergency meeting or the June already scheduled meeting, but there's a lot of energy around trying to meet earlier than that. Obviously some of that is a panic reaction, but ultimately OPEC needs to sit down and say, going forward, what's really going to be our role? Do we just sit back and watch? Do we put more effort in talking to countries like Russia to try and get some consensus of what we need to be doing? It is interest of both parties, and I think that conversation hopefully will take place soon. Good. If you don't have an emergency at $28 a barrel, when do you have an emergency? Well, I also don't think you should have a meeting just to react to an emergency. I think you should have a meeting to react to the impact on the world oil outlook globally. It is not an issue of we need to go shape up the price a little bit, because if you do anything too artificial, it's going to come cracking down very soon. But we need to sit down and say, as OPEC, what's our future? What's the future of our reserve? There are countries like us who believe they ride and continue to produce at volumes and at numbers that don't make any sense. We'd rather leave it for the next generation to deal with. And there are lots of that emotion with OPEC members. So I think looking at the global outlook for oil is what is key. It's not so much addressing immediate price reactions. And I think that's where I am calling for a meeting, because I think we need to have that conversation earlier than June. But if we don't have it before June, that's fine. But we're talking to each other informally. Over the last two, three weeks, I think I've talked to a lot of OPEC ministers. There's a lot of concern about this. Even Saudi Arabia itself has his own concerns about this, but it's just an issue of our approach. And I think what we need to do is to get everybody more comfortable. And that's probably going to be the job of the new OPEC president, Qatar, to try and get everybody more comfortable to want to talk about this. OK, very good. I want to come to the president of Azerbaijan and then to Russia next. But is OPEC dead? Has it just lost its cloud in the market? What's the role of OPEC today if you're not convening a meeting to see what all members, all 13 members are looking for? Khaled Al-Fali and then the minister of state from Nigeria, please. Well, we have a minister of petroleum who is unfortunately not with us today, Mr. Ali Naimi. He would be better qualified to answer this question. But what I would say is that OPEC as a coordinating agency, not only by its amongst its members, but also with non-OPEC members is a very useful organization. And I think the recent episode of the downturn in the oil market has proven that OPEC's traditional role of balancing the market and looking after the interests of its members as well as the interests of the global community is a very important role. Obviously, the organization can be strengthened. The level of trust of the global community and the consumers in OPEC needs to be increased and better cooperation amongst its members and with non-OPEC producers would contribute to improving its effectiveness. But I wouldn't say it's dead. The Minister of State, I find it interesting. 9 of 13 almost walked out of the meeting in December because they were so frustrated by a block that wants to continue to flood the market with oil. Let's speak candidly. I wouldn't quite put it that way. Nobody really threatened to walk out. There were very, very, very fervent opinions on issues. And as OPEC president, I managed to bring all that together because really at the end of the day, everybody wants something that is good for OPEC. I think that's where I agree. In terms of the future of OPEC, no, I don't think it's dead. The main fact that everybody continues to look for OPEC members to indicate what their position is on this issue shows you how strong they really are. This is probably the first time they are not really getting out to intervene and that is causing this ultimate. So that shows you that they still have the firepower because in reality, they're probably the only unified group that tends to want to talk as a group. Other producers talk individually. But I think what has come up obviously is that the time has now passed for everybody to go to see OPEC as a deciding factor in terms of price fixing. We will need to work collaboratively with others and it's got to be sharing of common goals. And I think that's what this is brought out. Okay, Dan Jurgen, then I'm going to go to the president of Azerbaijan. So first of all, John, if you look back historically, periodically obituaries are written for OPEC and then they get retracted and then they come out again. But I think in a sense, this leg down on price is not surprising. People knew Iran was going to come back into the market. Iran came back into the market sooner than was expected because the nuclear agreement was accelerated for other reasons. And so it came in at a time of maximum weakness and seasonal weakness in the market anyway. So the price was going to go down. So there are two numbers to watch now in the next two, three months. One is what are the volumes that Iran actually puts into the market between 300,000 and a million, where do they come out? And I think that's a big question mark in the market. And the other of course is what you said at the beginning. What happens to U.S. production, which is down about half a million barrels a day and what happens now in this environment between now and say the beginning of summer? Good. Officials from the National Iranian Oil Company said they've already tested a million barrels a day. And I'm not talking about the floating storage that they can sustain an increase of a million barrels a day by December 2016. Do you believe the figures, Daniel? Well, I don't have any way to independently evaluate them. That's a high number. I think the consensus in the industry is that those numbers are quite high. You've seen other numbers that are much more like 300,000 barrels a day and we'll see what decisions they make. They make money from putting more oil in the market, price goes down, they lose money. They also have this other source of money, which is the escrowed money that comes out of the banks, which is actually a much larger number. Okay, very good. The president of Azerbaijan, we've heard from two OPEC ministers here. No, sorry, minister of state and the chairman of Saudi Aramca. I'm not sure if I'm talking about your future job yet. I don't want to be accused of that because I live in the Middle East. That would be a big mistake. Sorry about that. Excuse me, are you willing to cooperate? Well, I mean, realistically, you're producing about 800,000 barrels a day. A non-OPEC member, have you ever reached out to OPEC and said, look, we need to, I'm suffering a lot in Azerbaijan. We need to do something about it. We are ready to do it. And actually that was part of our discussions with some of the OPEC members. We are not a big producer, but I think that if we have more coordination between OPEC members and large non-OPEC members with respect to the reduction of production, then maybe we can have a result. Because unfortunately, after every OPEC meeting, the price of oil goes down. Therefore, we are very concerned about the possible new meeting, which we are planning. So, maybe better not to have it. That's how much confidence you have in OPEC these days. And that's the rotating president who just left his job. That doesn't say too much. This is the real situation. Therefore, of course, I think that the coordination between large non-OPEC and OPEC agreeing to reduce price and increase the level of mutual trust. Because if it doesn't happen, I think that OPEC itself would not make this decision. And without this decision, we'll have this situation and just wait when the oil price will reach its bottom. Every day we think this is a bottom and then we see a new price for oil. And frankly speaking, this is already a little bit exhausting, also from a psychological point of view, not to mention the country's need to balance the budget, to have funds for investment, and not only in the oil and gas. And the difference between companies and countries is exactly this difference. We need to invest in social infrastructure. We need to invest in industrial infrastructure. And at the same time, to maintain the level of production, we need to invest in oil and gas. So this situation, of course, is not very pleasant. But at the same time, for Azerbaijan, it is a good time for reforms. And we started fundamental reforms of our financial sector, economic reforms, export-oriented non-oil economy production, and to forget about oil factor. As I said before, we were trying to prepare ourselves for this period, maybe in 15, 20, 25 years from now. But now we have to do it now. And I think that we'll cope with this situation. Again, economic situation in Azerbaijan is stable. Our foreign debt is only 12% of GDP. And our foreign currency reserves are almost the same level as our GDP. Therefore, I'm sure we will manage the crisis. But, of course, we want to have predictable future in order to plan our budget for the next year. Good. You've had about a 70% devaluation of your currency. It's been a very painful process. And you even had some protests in Azerbaijan as well. So this is social dislocation, with that sort of correction in the last year, all caused by a plummet in oil prices. Of course, there were several factors. First of all, of course, the decline of oil price. And our national currency during the last 10 years gained weight against dollar, which was, I think, a little bit artificial. One monat was $1.3. Therefore, first devaluation was to bring monat back to one-to-one. And the second devaluation was mainly because of devaluation of national currencies in the neighborhood. And our goods became not competitive. And it was additional burden on our budget. Therefore, it was inevitable. We tried to resist as long as we could. We lost some funds of our national bank reserves. But we had to take this measure. There were, of course, some concerns about that because it immediately reflected in the rise of consumer prices which we import. And we're still at some goods import dependent country. Therefore, increase of the price created certain concern. It was a minor protest based on some stress situation. People were not prepared for that. But now it's over. And I think that economic development in Azerbaijan will be sustainable. We had the fastest growing economy in the world. I think one of the fastest, 300% grows in the last 10 years. So it was too much, I think. And now it's a time that the cycles go down. And with the current situation, with the current reserves, I think we'll manage the situation. You're not the minister of energy, Kareel. But I'm sure they didn't let you sit on the panel without some sort of guidance here. Is Russia willing to sit down and consider coming off record production of 10.8 million barrels? Well, I think this agreement is possible, but it's the right time. And if we were to dissect what will drive this timing, I think we have to think about some of the thinking of the players. Because some players may believe that in 15, 20 years, there will not be much need for oil because of the electrical cars, et cetera. 70% of oil consumption is transportation. 42% of that is cars. So basically, some players may say, oh, in 20 years, less demand for oil, so let's go for market share in the meantime. But I don't believe this is what drive in some of the dynamics here. I think some players want to, as one of the ministers of the countries that punish shell oil producers, other countries may want to prevent successful entry of new players to the market and make sure that they cannot strengthen themselves by increasing oil production too much. So there is lots of this interplay of interest. Some countries may want to use this impetus for reforms and really drive this agenda to then have higher prices. So I believe when those things play out, maybe within a year, and countries get what they want, then it's going to be much easier to sit down and agree. But for now, lots of players, lots of countries have different agendas, different interests, so it's difficult to agree right at this time. What's the Russian agenda in this process then? Is it all about market share? That's what the production is suggesting right now. Well, I think we believe that it's a good time for transformation, but we definitely believe that the oil price is too low right now. And it's not reflective of fundamentals. So we are open to cooperation. We are open to discussions. And I think when the right time comes, those discussions will lead to a higher price. What do you think about what you've been hearing so far, Mr. Alfal? Well, I think we're talking about short-term reactions to what's happening today. And of course, in an ideal situation, you would balance supply and demand and keep prices within a reasonable range. But I think the big challenge that is facing the industry is long-term planning of capacity and having long-term investments match the expected needs in terms of demand and replacing natural production. And neither OPEC and certainly not with other non-OPEC producers that has never taken place. And what was apparent two or three years ago is that there was a long-term trend to increase production massively, both from within OPEC and non-OPEC, especially with the technology and business model that developed in North America that supply was going to be just far above demand unless some producers, big producers voluntarily, withdrew a lot of barrels. And as I mentioned earlier, that is not going to happen. So in addition to discussing in an objective and rational way what is to be done in 2016 and 2017, there needs to be a mechanism where long-term supply increments are properly planned to meet the needs of the global economy. Discussions about renewables and are, I think, taken out of context. I don't think renewables or the pressures by climate change are going to significantly reduce beyond what has already taken place, the long-term demand on oil. So the last thing the global economy and community needs is to see the oil industry withdrawing from, because electric cars will take over. If electric cars were to take off, where is the electricity coming from? And if it comes from coal, then climate change is going to be impacted negatively by electrification of the automobile. So I think we need to be pragmatic and objective and planning for the future. And the producers have a collective role, OPEC and non-OPEC, to have a dialogue and to understand where demand is going to be and who's going to be produced. Obviously, low-cost producers will expect to have a significant part of the long-term supply. And we in Saudi Arabia have our own development needs, but we also feel responsible to provide energy at a reasonable cost to consumers. So we're not going to accept to withdraw our production to make space for others. That's a pretty pointed statement. I could even apply that to Iran, which is trying to come back in the market. And they want to go back to 4.3 million barrels a day within an 18-month period. They kind of feel that's their deserved market share. I'm not going to comment on what the Iranians are or are not planning to do. They can speak for themselves. But not only our significant low-cost reserves that are already developed and ready to go, but the significant investments we have put in place. And I think our consumers who have relied not only recently, but over the last seven decades on Saudi production of energy fueling the global economic development over most of the last century wants Saudi Arabia to be a significant part of providing energy to the global community. This is a position that we've earned over a long time. And we've earned it by investing, by being true to our principles, and by continuing to be committed to our consumers. And we're not going to leave that position for others. Pretty clear message. Professor Lin, I think if you get your thoughts on picking up on what Mr. Afali talked about in terms of renewables, there's a lot of renewable investments still in China. And despite the fact that oil and gas investment dropped 15%, even as high as 20%, in 2015, the rise of renewable investment kind of driven by subsidies is still going higher. You're expecting that trend to continue in China? Yes, it will be. Because the Chinese government can meet that 15% of clean energy by 2020. Right now, it's only 12%. And nuclear and hydro takes longer time to build. So the wind and solar will continue to go. I believe there's a talk by the government that this year there will be 20 gigawatt of wind power, and also 15 gigawatt of the solar, despite there's overcapacity at this moment in the electricity sector. Right now, the overall system of electricity roughly has 20% surplus at this moment. It's because the demand suddenly comes down. And then the medieval now, the capacities, they're coming out. This year, we added another 60 gigawatt of coal-fired power plant into the system. The decision was made, of course, four or five years ago. But I'm saying is that the capacity is huge. And given that capacity, there's substantial difficulty for the solar and wind in reality, even though the government is subsidizing, it's protecting it. The problem is you cannot do not find enough demand for generation. So therefore, generation power kept declining. Of course, it's not as decline as much as coal-fired power plant. But still, given that already pretty low generation hours, further decline is also making it difficult for the wind and solar industries. But anyway, I think that another 100 gigawatt of wind also possibly more than 60 gigawatt of the solar will come into picture in the next five years in China. So President Xi, go to Saudi Arabia, go to Egypt, go to Iran. Russia signed a long-term 30-year contract with China. Is there too much dependency on China's demand right now? It's like the most popular player at the ball, the most popular woman at the ball. I mean, everybody's courting China's demand and long-term contracts. Is there a danger, as China starts to slow down, that there's an over-dependency that everybody's tilting east to China? On the oil side, I don't believe so, because the per capita is quite low at this moment. And in fact, if you look at demand last year, the gasoline is OK, more than 7% increase. The major problem comes from diesel. That's a related industry. And that's consistent with what is the current situation right now. If the industrial production is coming back and given that China is still putting 20 million of the car on the street every year, the Chinese oil demand is still there. And by the way, the meter is still our biggest exporter, more than 50% at this moment. South China coming down a little bit, because we buy more from Russia, but the steer is 15% at this moment, I guess. But, Hala John, it's not irrational if you look at the period of the super-cycling commodities, 2003 to 2013, 45% of all the growth and world demand was in one country called China. But can it be sustained, Dan? Well, that's the question of the market. And that's what I'm saying at the beginning, that when China comes out very quickly and goes down very quickly, that has a huge impact on the international market. It does, Hala? Well, we're the biggest exporter of crude oil to China. We also have investments in China, refining and marketing. And there is a silver lining to the China story in that as they shift to a consumer-led economy and as more of the Chinese people move into the middle class and they start consuming more, petroleum products tend to gain. While heavy industries, cement and steel, slows down, that's going to hurt more of the coal versus the oil. So I think light oil products will benefit from the shift that the Chinese economy is undertaking. Good. I wanted to follow up on the cash burn in Saudi Arabia in 2015. It was about $110 billion. We saw the budget for 2016. This is a change of mentality for the Saudi people, lifting of petrol prices, subsidies coming off for power. It's a change of thought. Is Saudi society ready for this after all, King Salman has been in power for just now taking the throne for just about a year, as you know. This is a major transition. Is it going to remain stable with the cash burn and prices of where they are today? Absolutely. First of all, Saudi Arabia has been planning to restructure its economy, to move to a smaller, more effective government and to empower and unleash the private sector in a bigger way, diversify income with less dependence on oil. None of these happens overnight. There are transitions that take years to happen. Sometimes they take decades. The current phase we're in with oil prices is going to give us the impetus to accelerate this. And we started. The budget of 2016 is basically flat spending compared to 2015. So we're not really slowing down the growth of the economy. Still, Saudi Arabia will grow in GDP in 2016 per all predictions. You need to grow 5% or 6% to make sure your youth unemployment rate doesn't go up. Well, unemployment can be helped by substituting. We have 10 million foreign workers in Saudi Arabia. So with better training and development and the private sector picking up more of the slack on providing jobs for Saudis. So there's a lot of reforms within the labor markets that can take place. There is a lot of localization of our own spending. And energy alone will create half a million jobs. And this is something that we are undertaking. The healthcare sector, which I'm responsible for, is basically all based on imported input factors, from pharmaceuticals to medical equipment to even healthcare workers. If we gradually localize these input factors, that will create not only a lot of jobs, but also a lot of GDP growth. So we have many levers at our disposal that the government with the Economic and Development Council being in the cockpit, literally 24-7, moving these levers, we will be able to develop Saudi Arabia economy into a more diverse, more sustainable, less dependent on oil, with a lot of opportunities, not only for Saudi investors, but here in Davos, I think there are numerous opportunities. We're literally opening the doors wide open for foreign direct investments, for investors who are willing to come and invest in Saudi Arabia and take advantage of the next phase of development, which is going to be significant. Some are very concerned about the young Deputy Crown Prince, Muhammad bin Salman, that he's moving too quickly as a youthful leader, too many reforms, too much shock therapy for a place that used to have very gradual change. What can you share in terms of insights on that front? Well, the same people were concerned that we were too slow in the past. And I think as a former runner, I used to run, it helps to go through sprints at times to develop your muscular strength. So indeed, we're accelerating our reform. His Royal Highness is very ambitious in terms of where he wants Saudi Arabia to be sooner rather than later. And I assure you that everybody who works with him and around him is excited by his vision and is energized by his energy. And we see opportunities left, right, and center that are waiting for us to grab. And it's not going to be the government alone. It's the government, the private sector of Saudi Arabia. And it's the global community of people who want to partner with us. And like I said, take advantage in a positive way of these opportunities in a mutually beneficial manner. To reform. Go ahead, Kareel. Yeah, actually I would like to agree with this because we had an opportunity to meet with the Crown Prince and we feel that this transformational path of Saudi Arabia is very exciting. And we as Russia would like to invest in some of the projects that we are discussing and the fact that they really want to build tourism around Mecca and other areas. So what we see is really a very interesting test case of can the reciprocation away from oil happen very quickly given the energy of the economic team in Saudi Arabia that's moving very quickly and is doing lots of things right. Okay, very good. I'm gonna finish up here in two minutes, but is anybody really surprised why we have such a bearish market today? No one can really point to why we see such a downfall in prices the way we see it today. Does it make sense with the supply, demand equation that we're seeing today? Al-Adhafala? Well, I think the era of high oil prices is the reason we're seeing this. We were surprised here in Davos and elsewhere and in Dan's conferences. I've always said the oil price was too high given the fundamentals when it was above $100. And that high price pulled a lot of money, a lot of investment. The oil industry is a long cycle and there is a lag time between when the money comes in to where when production comes out. So the production we're seeing coming to the market in 2015, 2014 is because of the decisions that were made over the last decade because of high oil prices that were above the marginal cost of the reserves around the world. And it's going to take some time of lower, more moderate oil prices to bring supply and demand imbalance. Unfortunately, it takes time. Okay, Dan, your final thoughts on that? This is the fourth time in the last 80 years where you've had a sudden big surge of oil coming to the market and each time it happens, surprise, supply and demand, price goes down. I think what's happened and I think your question in the short term is every kind of piece of information adds not only to the supply, demand balance but to the negative sentiment in the market. And so one of the things to keep your eye out is when some things, some inputs come into the market that are no longer negative because everything now is just hammering down on the price. Well, it's pretty extraordinary. We had tensions between Saudi Arabia and Iran in the last month, attacks against Libyan facilities by ISIS, hitting supplies. Syria doesn't go away, attack in Iraq. Numerous different things that would have shocked the market before. Don't even move the needle on the upside. That's how bearish this market is. Well, and I think you, while there is a surplus of geopolitical risk, there's a greater surplus of oil but we'll see what happens. Keep your eye on reigning volumes, keep your eye on US volumes. That's just one suggestion of the sort of things that could change the psychology in the market. Okay. Mr. President, give you the final word here. How do you plan if you have a price at $28 a barrel? Do you think we've reached very close to the bottom and we can turn back in the next quarter or not? Yeah, I think so. I think that we're very close, maybe two free dollars more to drop and then in the second half of the year, the market will grow because we all know that it is a cyclic system and there was a time I remember when we launched our major oil development projects in 1994, the price was $12 and it seemed to be very normal. And when we were planning the development, I remember we thought about optimistic scenario, which was $22. So now we are very close to that optimistic scenario 20 years ago. So I hope that the market will stabilize because oil sector needs investments and last year we had the highest percentage of drop of investments in the oil sector. So without that, definitely the price will go up and will stabilize. I hope, I also don't want to give any prognosis, but I think for companies, for investors, for governments $60, $70 per barrel will be excellent price and I hope to see that sooner than later. But by 2017, you think? I think so, yeah, I think so, 2017. This year, the second half of the year, I think will be the period of stabilization and hopefully we can see the growth. Nice round of applause for the panel. I really appreciate all your input today. Thanks.