Falih charm offensive slowly wins back OPEC for Saudis

Fri Jun 3, 2016 8:05am EDT
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By Dmitry Zhdannikov, Rania El Gamal and Reem Shamseddine

VIENNA (Reuters) - Russian oil billionaire Vagit Alekperov isn't easily swayed, but Saudi Arabia's new Energy Minister Khalid al-Falih achieved it this week.

Intense diplomacy by the soft-spoken Falih at his first OPEC meeting - with his speech peppered by words such as "gentle approach", "no shocks" and "consensus" - has persuaded Alekperov that OPEC is more alive than dead.

"The fact that OPEC agreed on its new management shows they want to regain their coordinating role. The cartel will perform market management again," Alekperov, chief executive of Russian energy firm Lukoil, said after meeting Falih and Iranian Oil Minister Bijan Zanganeh separately in Vienna.

On Thursday, OPEC could not agree to set a clear oil-output target as Iran refused to limit its own production.

But the meeting was relatively peaceful and free of the usual clashes between political rivals Saudi Arabia and Iran, with Falih promising not to flood the market and to listen to Tehran.

In a rare compromise, OPEC also decided unanimously to appoint Nigeria's Mohammed Barkindo as its new secretary-general after years of friction over the issue. Oil prices stood flat at $50 a barrel on Friday, up 80 percent from their January lows.

Falih, who in April succeeded veteran Ali al-Naimi, was the first OPEC minister to arrive in Vienna.

He met most fellow colleagues on the sidelines, spent several hours with independent OPEC analysts and held a long news conference with reporters.   Continued...

Saudi Arabia's Energy Minister Khalid al-Falih (C) arrives for a meeting of OPEC oil ministers in Vienna, Austria, June 2, 2016.   REUTERS/Leonhard Foeger