OPEC will maintain steady flow of energy supplies – Barkindo
OPEC would remain focused on energy supplies in spite of Russia-Ukraine crisis and COVID-19 pandemic which had adverse effects on the energy markets globally.
The Organisation of Petroleum Exporting Countries (OPEC), says it will remain fully focused on maintaining a steady flow of energy supplies to consumers.
Dr Mohammad Barkindo, OPEC Secretary-General said this on Thursday at the ongoing Nigeria Energy Forum (CERA Week 2022 Agenda) in Houston, Texas.
The forum is tagged: “Oil and Gas Investments: The Future of Fossil Fuels Amid the Quest for Decarbonisation”.
Barkindo in a Keynote address, which was made available to newsmen in Abuja, said that OPEC would remain focused on energy supplies in spite of Russia-Ukraine crisis and COVID-19 pandemic which had adverse effects on the energy markets globally.
“Over the past ten days or so, we have seen escalating geopolitical tensions, which are still unfolding and having adverse effects on energy markets across the world, resulting in heightened levels of volatility.
“The tensions have spooked investors and rattled commodity markets. We recognise this and are following developments very closely.
“Our hope in this crisis is that all parties involved can reach positive outcomes that will be acceptable to all,” he said.
Barkindo noted that the COVID-19 pandemic taught OPEC the value of taking a prudent approach to oil supply and demand developments.
According to him, this should be done with the flexibility to adapt strategies as and when needed, ultimately for well-being of global community.
In terms of the market outlook for 2022, the secretary-general said there was evidently some optimism, but it was also cognisant that uncertainties remained and was further complicated by geopolitical developments and exceptional market volatility.
According to him, optimism is being driven by the vaccine rollout, although this needs to filter through to more developing countries, improving mobility, and the continuing economic recovery.
“Uncertainties relate to COVID-19 developments, although at present we see the impact of the Omicron variant on the oil market to be relatively mild and short-lived.
“Additionally, the geopolitical challenges already mentioned global supply chain issues, potential effects of rising inflation, consequent rise in interest rates, and knock on-impacts from challenges in gas, coal, electricity sectors, need to be closely monitored,” he said.
Speaking on the theme of the session, he said the unpredictability and volatility brought on by the pandemic had intensified discussions related to climate change and the energy transition.
This, Barkindo said was clear at 2021 COP26 meeting in Glasgow, Scotland.
He listed a number of positive outcomes such as the U.S. returning to the head of the multilateral table, all Parties commitment to the implementation and full operationalisation of the Paris Agreement, and the announcement of the Glasgow Climate Pact.
This, he said was all encouraging, given the pressing need to reduce global emissions, alleviate energy poverty, counter the impacts of the pandemic, and find a sustainable way forward leaving no country, industry, or peoples behind.
Additionally, he said that it was witnessing investors, environmental lobbyists and some corporate boards pressuring oil and gas companies and governments to pursue increasingly radical policies and initiatives that could be more disruptive, than productive for global energy industry.
“There have recently been calls for investments in new oil and gas projects to be discontinued, particularly in the context of discussions around net-zero targets. This is again wrong.
“We understand the move of many developed nations to set net-zero emissions targets. A number of developing nations have too. In fact, some OPEC Member Countries, including Nigeria, have made political pledges on net zero.
“However, it is important to appreciate the massive challenges for developing countries to reach net zero emissions, many of which are acutely focused on priorities such as energy access, living wages, and supplying basic necessities.
“We need to continually keep in mind that access to affordable, reliable, sustainable and modern energy, is a right for all, not a privilege of the few, and is enshrined by the UN in Sustainable Development Goal Seven,” he noted.
According to him, the unfortunate reality for developing countries is that a staggering 759 million people worldwide did not have access to electricity in 2019, with about 79 per cent of them located in Africa.
Moreover, he said there were roughly 2.6 billion people or 34 per cent of the global population who did not have access to clean cooking fuels and technologies.
This, he said included a massive 70 per cent of Africans, exposing them to high levels of household air pollution.
He further disclosed that from the perspective of Nigeria alone, in 2019, only 55 per cent of the population had access to electricity and only 13 per cent had access to clean cooking.
He recalled that in the energy poverty debate that Africa was still relatively unexplored in terms of oil and gas.
According to him, this is in spite being bestowed with approximately 125 billion barrels of proven oil reserves and 16 trillion standard cubic metres of natural gas.