Russia and Saudi Arabia have reached agreement to draw up recommendations for joint measures and actions to ensure oil market stability and predictability, according to the joint declaration signed by Russian Energy Minister Alexander Novak and Saudi Arabian Energy, Industry and Mineral Resources Minister Halid Al-Falih during the G20 summit meeting.

The declaration emphasizes the need for dialog on the oil market situation and for development of bilateral cooperation. "The ministers emphasized the importance of supporting the dialog being conducted by the sides concerning current development on the oil and gas markets and expressed their mutual desire to further expand bilateral cooperation in the energy area. This is due to the fact the two countries bear responsibility for producing over 21% of oil consumed globally, which is needed to ensure global economic growth, raise living standards and achieve millennial development goals.

Measures to restrain market volatility are needed. "The ministers recognized the need to restrain excessive oil market volatility, which has a negative effect on global economic growth and long-term stability."

The oil producing countries are confronting the problem of declining investment in oil and gas projects and postponement of projects. "The ministers also noted the long-term challenges the exporting countries are facing on the global oil market, including a significant reduction in capital expenditure on oil production globally, particularly geological exploration work, and extensive postponement of investment projects to a later date, which has on the whole led to greater volatility and, accordingly, an unstable situation on the oil market in the long-term outlook, for both producers and consumers," the declaration says.

"In this connection, the ministries agreed to act jointly or in cooperation with other oil producers. In addition, they agreed to continue consultations on the oil market situation and create a working group for joint monitoring, which will track fundamental oil market indicators and draft recommendations on measures and joint actions to ensure market stability and predictability," it says.

Novak and Al-Falih noted "the particular importance of constructive dialog and close cooperation between the two leading oil producers in order to support oil market stability and ensure a stable level of investment in the long-term outlook."

Russia and Saudi Arabia will also develop cooperation in technologies and equipment production. "The ministers agreed to develop cooperation between Russia and Saudi Arabia in the oil and gas sector, in the areas of: introducing new technologies; exchanging information and experience in order to increase the use of technologies in production, refining, storage, transportation and sale of hydrocarbon resources, equipment production, provision of services, notably engineering services and organization and performance of scientific research work; and the electricity and renewable energy areas," according to the declaration.

The ministers also agreed to examine the opportunity to create, with the support of the sovereign funds in the two countries, a joint database of promising energy sector technologies and their introduction and use.

Novak said the Russian-Saudi working group on cooperation in oil and gas would hold its first meeting in October.

Novak said he and Al-Falih would next meet during the International Energy Forum in Algeria and in November at the OPEC meeting in Vienna.