LONDON – Opec’s top official has urged countries to invest much more in oil to meet the world’s future energy needs and said climate policies need to be more “balanced and fair”.
“It is imperative that all parties involved in the ongoing climate negotiations pause for a moment; look at the big picture,” Mr Haitham Al Ghais, secretary-general of the Organisation of Petroleum Exporting Countries, said on Sunday at an energy conference in Cairo. They must “work towards an energy transition that is orderly, inclusive and helps ensure energy security for all”.
His comments came amid a shift among some Western governments and companies regarding fossil fuels. Prices for oil, natural gas and coal surged after Russia’s invasion of Ukraine in February 2022, pushing energy security to the top of the agenda for many leaders.
United States President Joe Biden went off-script during his State of the Union speech last week and said: “We are going to need oil for at least another decade.”
In Europe, Shell signalled that it will stop accelerating spending on renewable energy, while BP slowed its planned reduction of oil and gas output.
Mr Al-Ghais said the oil industry has been “plagued by several years of chronic underinvestment”. It needs US$500 billion (S$665.4 billion) of investment annually until 2045, he said.
The United Arab Emirates’ (UAE) hosting of the COP28 climate summit in late 2023 will “serve as a fresh opportunity to explore inclusive, sustainable and consensus-based solutions to climate change”, said Mr Al-Ghais, who is from Opec member Kuwait.
The UAE, also part of Opec, has appointed Dr Sultan Ahmed Al Jaber, head of its national oil and gas firm Adnoc, as president for the summit. While that has caused some controversy, Dr Al Jaber has said that hydrocarbon producers must be at the forefront of climate talks if the world is to transition to cleaner energy while also ensuring that fuel prices remain affordable.
Mr Al-Ghais reiterated that Opec and its partners – known as Opec+ – are committed to keeping the oil market stable. The 23-nation Opec+ is led by Saudi Arabia and Russia.
Saudi Arabia and other core Opec members are unlikely to respond to Russia’s announcement on Friday of a production cut by pumping more oil, Bloomberg reported.
While Moscow indicated in late 2022 that it might reduce output as a retaliation against Western sanctions, crude prices still jumped on Friday. Brent extended its weekly gain to 8.1 per cent, closing at US$86.90 a barrel. BLOOMBERG