Interview with Brian Sullivan - CNBC

[M051-02] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:00:25 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Well, first of all, thank you for the opportunity and Happy 4th of July for you and your audience and everybody in the US. I wanted to come, as always, you have been generous with your invitations. We clearly have had quite a weekend, quite a few days, but I am sure that we have been fortunate with our partners in the Russian government that we have solidifies the 20 countries in agreement to bring about a good agreement for the market. More important, I think our focus is relating to the market and what kind of guidance that the market requires, considering the volatilities and the uncertainties that we are going through.

[M051-03] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:01:26 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

We are still going through Covid, and the movement of Covid is still unknown, there are too many things that are happening with Covid. One day it subsides and then all of the sudden it moves somewhere else and with much more ferocity than what it is before. We still have the issue, as you know, with Iran, and how much, when, and where, and how, and by how much they would come, also there is a potential for Venezuela. These things make you wonder what would be the right thing to do with a market that needs a guidance with a much more stretched period, simply because also we have this 5.8 million that we still need to attend to and make sure that we attend to it properly, whereby may be one of many of these things may convolute and if we do not attend to do it properly, We may lose sight of what the market requires, and how we can continue maintaining sustainability and stability in the same goal.

[M051-05] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:03:02 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

No, not that I know of, but you know, we have our monthly meetings. It is very important, crucially important that when we close the meeting yesterday, I do not see anybody, on Friday, who did not mention straightforward their commitment to the existing agreement. Many people, I have seen some interpretations here and there and yesterday and probably today, that they are talking about, I do not know what would be their ultimate reason, but I do not recall anybody to be on Thursday or Friday or even in our discussion bilaterally with some members that anybody had had uttered the world that we do not have an agreement, we have an agreement that will continue until April, and more important, I think, is would be of the interest of everybody that we stretch it more for the rest of 2022, to ensure that we can download this volumes in a meticulous way to ensure that we would not disturb the market.

[M051-07] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:04:38 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Well, it could be, and we just, I think, we owe it, you know, let us remember and I keep reminding those who listened to us, here in Saudi Arabia that it was Saudi Arabia that brought up this proposal. Yes, we worked through the details with our colleagues in Russia, Alexander and I had spent almost the last five weeks just about when I were with him in Saint Petersburg. It was there where we have start looking at the details of our proposals, and we also socialized it with some of our colleagues, too in terms of the principles.

[M051-08] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:05:27 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

So, yes, we have every interest to bring barrels, the sooner, the better, yes, we need to do it in a very diligent way, careful way and we worked hard in developing our mechanism. You know that the monthly meeting is a new, you were complementary about it, the adjustment mechanism is a good safety valve for the market because it enabled us, and we did exercise it remember, originally, that the two million should have come in one day, and then we stretched it for 4 months, and then we even as Saudi Arabia brought more in the form of voluntary cut, which is to try to facilitate putting these two million in trenches instead of one goal. Doing all of the above bringing an inventory level to as low as they are today.

[M051-09] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:06:32 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

We need to have volume now to cope with the current season, and we have to mitigate what we need to do in terms of this particular quarter. Yet, we have to be careful, not to overdo it; you know not doing it is not being careful, over doing it is also being not careful, because we still have these things going, and we have no certainty about it, especially Iran and Covid, and also, because we have a first quarter that usually demand our Inventory get to be built, so tranquilizing all of these things, and balancing, you know, your act to ensure that we do it, and we do it properly. This way we attend to the consumer requirement, and yet we do not abandon the stability and sustainability that a producer requires. When I talk about producer, I talk about everybody, including the industry.

[M051-11] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:08:16 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

The very basic argument is that, in March 2020, that agreement, by the end of that month, would have concluded. So, actually in March 6th, we were trying to work out a new agreement. In this one, no, we still have a nine-month period, and therefore, I have no qualms in my mind that I can speak now for Saudi Arabia that we have no single doubt in our minds that we will leave to this agreement to the later. I have heard from so many of our colleagues. In fact, I do not recall any that did not repeatedly stress the commitment to this agreement, so comparing what was happening in 20 March 2020, and what is the story now? I do not think that there is any type of similarity.

[M051-13] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:09:56 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

There are two different subjects: the first is the extension, and it is in the public domain, you could see it that it was mentioned in the agreement, and the reason we did it there is that some of our colleagues when we were putting together that agreement in April, had a bit of a difficulty accepting an agreement to go beyond two years, and that is why we had put that clause in that agreement that by December next, we can review the extension. So, it is there, it is embedded there, and if it is embedded there, then, it is a part of the agreement.

[M051-14] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:10:38 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

The volumes, the 5.8, were not there, it was actually was said exactly verbatim that it should be, it will remain just until the end of April. Now, if you look at the two texts, you would know that somebody, you know, we were the original drafters with others and we had to accommodate this concern by saying, "OK", we can review in December 2021, what we can do about the 5.8, and any person on planet Earth would say that the agreement has to be stretched to allow for a careful and gradual phased in approach to the 5.8.

[M051-15] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:11:26 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

If we did not put that close, then the whole world would, it would become like a ticking clock or a ticking bomb, and when that end of April will come, the world would live with the reality that still there is a 5.8 million are still to be attended for, and therefore our original concept was, we go for where we had agreement was originally written, and which is to extend the agreement, and start earlier the phasing out of this 5.8 million. it would give us 9 months until the end of the agreement, and with the extension, it would give us another 8 months.

[M051-16] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:12:10 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

If you take the whole volume, the 5.8, and you can put it in a linear way, just a straightforward 400,000 per barrel every month, that will take care of you until end of September 2022, which means if you extend the agreement even to end of September, you will barely finish the 5.8. Now, how could we even argue that we do not need that extension; I do not know, but more important, why we stretch it to the end of 2020, Simply, we need to have 3 months of the space that we can apply the so-called adjustment mechanism. Why? Because there are too many things that could happen next month, the month after in October, in November, which may bring so many barrels to the market, i.e. an Iranian retail or something of that sort.

[M051-17] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:13:16 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

So, you need to have that mechanism to be truly available, and the market can believe that you could exercise. How could you stretch an agreement even as to end of September?, When you are saying we will do 400. Yet, you would say I still can exercise that mechanism, well, if you exercise that mechanism, then, you would end up probably with having the volume that is not attended it. So, you need the three months just to make sure that you can honor what you are saying to the market.

[M051-19] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:14:13 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Well, I know for one thing that more stable, sustainable and stable market is an environment that is congenial to all investors, it would give a better trajectory to the industry, more attendance by OPEC Plus and others. Let us not forget that in April, it was not just OPEC Plus, it was OPEC Plus + the G20, you Brian, you remember that we had back-to-back meetings and now can we ask you a question, and ask your good audience, "who put all these groups together? and who worked out the back-to-back meetings?"

[M051-20] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:15:02 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Luckily, we were hosting the G20 at that time at the 2020, and therefore, we arrange that with our friends from the G20 countries, which really added and lended the serious support in bringing some forms of confidence that this market and this industry would not be left alone, and that the attendance of this industrial market had expanded not only to go beyond the usual OPEC Plus, but also the G20.

[M051-22] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:16:02 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Well, I would like to be honest, but I have not yet talked personally to anybody yet. But of course, I am not at liberty to share any of these things that I am entitled to speak about what did I hear and what did I speak? But I have not yet spoken to anybody.

[M051-24] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:16:58 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Well, Jeff is a good friend I mean, you know, we talk to each other; I talked to him actually today. I think he is making appearance, I think, in CNBC somehow today or somewhere, but you know, I would love to believe that there is a 5,000,000 million coming. But back to your original question or, I honestly, do not have the issue at all of speaking proudly of the fact that, on Friday, we ran a vote, and 20 countries agreed to that proposal.

[M051-25] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:17:39 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

I would like to take this opportunity and through CNBC asked anybody who is attending to this market be it industry, bankers, traders, check our, you know, joint Saudi-Russian proposal, and ask yourself: ''what is wrong with that proposal? Aside from the grievance of the basis issue, just look at the proposal itself, the components, it really address everybody's concern, ensuring that the market would not be short of volumes, carefully, bringing that volume in the gradual phase in, continuing the mechanism of posing or even increasing or decreasing, which is very assuring from the market.

[M051-26] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:18:30 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

To do all of that above, you need to stretch them the agreement, because you need, yes, we all need an end to that tunnel. But we have to be careful about being too optimistic, and all of the above required a longer timeline. That longer timeline helps the market and gives the market more comfort. Now, if we can congregate around these big principles and dash some of our individual grievance that would be good. Case in point, why did we do the voluntary cut? You know that I did arithmetic's to it if you take our voluntary cuts total, it means that we have done 400,000 barrels, all the way, per day, all the way, until June.

[M051-27] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:19:30 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

Nobody compelled us to do it, we did it, we are actually enjoying the market that we are having today, is good result of that work. 155 million barrels were withdrawn from inventory, and therefore, people look have to look at our performance in Saudi Arabia, broadly and comprehensively. Now, if you talk about grievance, well check the last 30 years see how much capacity Saudi Arabia had and still have, and how much we have been producing. So, if you are talking about grievance, I think we will be in grievance for the rest of our live of why did we do that?

[M051-28] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:20:19 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

But, you know, grievance has their own, also, luckily, we have mechanisms be it within OPEC itself, before even the emergence of the OPEC Plus, and within OPEC Plus itself, there are few precedents that they were grievances, and these processes were activated, and some of them were, all of them were attended to, some of them were accepted, some of them were rejected. But this is the kind of, in my judgment, the professional arrangement that one would need to. There is no point, and I do not want to divert away from what I am here for, but you cannot pick a month, and say: this is my capacity, so you got to give it to me now, and this is not the way to do it.

[M051-30] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:21:48 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

So, where is Sohail, he is a good best friend of mine, and I am still maintained that there is nothing that can commingled differences of opinions here and there and personal friendships. If we do, we would end up with no friends, my dear friend.

[M051-32] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:22:15 · Interview with Brian Sullivan - CNBC · 2021-07-07 · مشاهدة عند هذا التوقيت

One word trusts us, we will deliver.