Opening Address by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the First OPEC-AFREC Technical Meeting, 6 October 2020, via videoconference.

Ladies and gentlemen, colleagues,

OPEC and I personally have been waiting a long time for this day to come! A dialogue between African countries and OPEC has been in the making and we are very much excited to be opening this first OPEC-AFREC Technical Meeting.

I am thrilled to see my home continent finally take its seat and bring its voice to the dialogue table. We are privileged to have Dr. Ibrahim, the Secretary General of APPO, as a guest of honor and a veteran of the oil industry who also spent many years at the OPEC Secretariat.

A recommendation was made back in February 2019 that a technical partnership between OPEC and AFREC could be beneficial. It was stated at that time that this would also support OPEC’s medium- and long-term goals regarding energy poverty eradication and the continued use of conventional oil.

Thus, this meeting is the starting point of what we hope will be constructive and regular dialogues with various African entities. Arrangements are ongoing for a similar technical meeting with the African Petroleum Producers Organization (APPO) and the 1st OPEC-Africa high-level meeting, all under the newly established OPEC-Africa Energy Dialogue. OPEC is ready to go forward in a structured way to further this initiative, thus we attach special importance to this inaugural meeting! Others will follow suit soon this year.

As more African oil producers join OPEC Congo, Equatorial Guinea and Gabon are the most recent members, complementing Algeria, Angola, Libya and Nigeria — we would like to focus even more on this continent. Africa has a world of potential regarding energy and sustainable development, which we hope to help unlock together.

I have personally visited many African countries before the COVID-19 pandemic and we hope that many more countries will join the OPEC family, bringing their strengths and potential. Africa's oil industry holds huge potential. The continent is home to five of the top 30 oil-producing countries in the world, accounting for nearly 8.0 mb/d in 2019, just below 10% of world output. At the end of 2019, Africa was estimated to have proven reserves of oil in the region of 126 billion bbl. On the production side, there is still vast potential to achieve more!

Ladies and gentlemen,

Africa continues to be the world’s most have-not continent in terms of energy security. Many, if not most, African countries face severe energy shortages and this has held back industrial development. This is despite the fact that the continent is blessed with tremendous conventional and renewable energy resources.

I know that your Organization was formed in order to deal with this issue, with the noble goal of harnessing energy resources and making them available to people on the African continent to enable development. An additional benefit would be the protection of Africa’s forests, as access to electricity would reduce deforestation for firewood. Since AFREC’s launch in 2008, you have achieved great things.

I want to quote Akinwumi Adesina, president of the African Development Bank, who stated at a World Economic Forum on Africa: “We have got to be so impatient with moving Africa forward relentlessly – we have no choice. In 2025, there is absolutely no reason why Africa should not be totally lit up with the power it needs to industrialise, because we must not forget, no economy ever develops unless you have the base load power to drive industries and to be competitive... let’s not forget for this continent to create the jobs it needs fast, we must have base load power. So I believe that in ten years… we absolutely must develop Africa with pride and have universal access to electricity.”

Along with meeting the continent’s own energy demands, which is vital to development and growth, we hope to see the continent diversify within the petroleum sector to stimulate the job market and help protect economies.

Ladies and gentlemen,

As we know at OPEC, data and analysis are the backbone of good decision-making. Your Organization is focused on these same matters. Your work in designing a continental energy base is invaluable in the fight against energy poverty on the African continent. It will enable your decision-makers to engage with one another and the international community on this issue armed with the latest facts and figures. This will, in turn, expedite developments and synergies, while preventing overlaps. Data is an important starting point and OPEC is ready to enhance cooperation in this area. As the premiere organization focusing on this issue, with 53 member states, your reach is broad and your voice strong.

We appreciate very much our initial dialogue in 2016 on data services as well as your letter sent in May 2019 requesting a technical partnership with the OPEC Secretariat to help you implement your five-pillar strategy.

OPEC has identified domains in which a partnership is applicable. These include:

  • Cooperation in data services: The energy data collected by AFREC member states is used by OPEC’s Data Services Department in Annual Statistical Bulletin (ASB)-related work.  
  • Cooperation in oil and gas: AFREC plans to support the creation of African domestic crude oil and petroleum products as well as natural gas markets. Cooperation in this area would improve OPEC’s knowledge of the African market, relevant trends and policies, and provide additional input for the World Oil Outlook (WOO).
  • Cooperation in energy efficiency: AFREC plans to support efforts to increase energy efficiency in its member states through harmonization, capacity building and support of national programmes. It also stresses the importance of growing energy access and economic development in its member states. OPEC could benefit from AFREC’s expertise and information related to energy efficiency, energy demand and energy access.
  • Cooperation in energy transition: AFREC’s vision to accelerate the energy transition in the African context, including socio-economic development and eradication of energy poverty, echoes OPEC’s goals in these areas. Deeper understanding of potential energy pathways in Africa is beneficial for OPEC’s long-term view, especially considering the vast demand potential of the African continent.  

In short, working together with AFREC fulfils many OPEC objectives, including promoting the use of oil; strengthening expertise and research capacities,; standardizing working methods and databases with organizations similar to OPEC; and securing and enhancing the collective interests of OPEC Member Countries in future global negotiations and multilateral agreements.

Your Organization will gain from this fruitful collaboration through access to OPEC’s knowledge base, expertise and trained analysts, who collectively possess an incredible wealth of experience about the energy transition, the oil industry and related topics. The exchange of information between our two organizations will be highly beneficial to us both.

Ladies and gentlemen,

We must also consider two great scourges facing mankind today that overshadow all of our discussions: climate change and the COVID-19 pandemic.

The pandemic has brought unprecedented challenges to the entire world community, as well as the oil industry. Development has ground to a halt and I daresay reversed in many countries, with African countries being no exception. In fact, they are being harder hit, because most do not have the resources to support faltering economies in the form of financial stimulus or government handouts.

We are still in the midst of the grip of this deadly infection, with rates skyrocketing in some of the world’s major economies, and a second wave strongly affecting Europe and threatening other countries. The resulting lockdowns to try and contain the pandemic have had a catastrophic knock-on effect on the global oil industry, with demand dropping by an unparalleled 30% in April. Our latest estimations for the year 2020 is that overall oil demand will contract by 9.5 mb/d to average 90.2 mb/d, an overall loss of about 10%.

I want to add that although the 2030 Agenda for Sustainable Development pledges to leave no one behind, ine­qualities exacerbated by the pandemic could become even more pronounced in the long-term, in particular for developing countries and vulnerable groups that feel the effects of the pandemic acutely.

The lack of access to energy may magnify the socio-economic impacts of the pandemic. Health facilities in many developing countries are at a disadvantage because of insufficient energy or unscheduled outages, which could affect their ability to deliver services at this crucial time. Zero or limited access to electricity complicates social distancing efforts, as energy is required for people to stay in touch, receive information, and work online or study from home. Additionally, a lack of access to clean energy means people are more vulnerable to respiratory infections, such as COVID-19.

Ladies and gentlemen,

Our collaboration should also have the added benefit of supporting the Sustainable Development Goals (SDGs), in particular: ending poverty (SDG1), good health and well-being (SDG3), quality education (SDG4), affordable and clean energy (SDG7), decent work and economic growth (SDG8). Generally speaking, SDG7 on energy is a goal that broadly cross-cuts all of the other sustainable development goals, providing support for their actualization.

As the first-ever universal goal on energy, SDG7 seeks to ensure access to affordable, reliable, sus­tainable and modern energy for all. However, hundreds of millions of people around the world still lack access to electricity, and progress on access to clean cooking fuels and tech­nologies is very slow.

According to OPEC figures, global electrification has increased from 83% in 2010 to 90% by 2018, but 789 million people still do not have access to electricity. The world’s deficit is concentrated in Sub-Saharan Africa, where 47% of the population have no electricity. Access to clean cooking fuels and technologies increased from 56% in 2010 to 59% in 2016. Most recent estimates indicate that the level of access in 2018 was 63%, therefore, 2.8 billion people still have no access to modern cooking systems.

In Sub-Saharan Africa, the number of people without access to clean fuels and technologies for cooking has further increased as a result of fast population growth. About 85% of people in this region lacked access to clean fuels and technologies for cooking in 2018.There is a high human cost to this — millions die from respiratory illnesses as a result of a lack of clean energy for cooking.

We want to add here that under the Paris Agreement, implementation of national energy policies is gaining urgency, with new targets set for 2030 and 2050. Thus, the pressure is on to approach energy creation and consumption in a measurable, organized way.

Eradicating energy poverty has many positive knock-on effects, such as improved health, job creation and the addressing of inequality and environmental matters. Furthermore, the provision of universal access to modern energy would have an insignificant impact on emissions.

Ladies and gentlemen,

During today’s first session, we will discuss the structure and mission of both of our organizations, followed by an exchange of information. OPEC will have a presentation on energy efficiency, while AFREC will discuss an energy policy programme.

In the second session, OPEC will make a presentation on energy data, while AFREC will detail its African Energy Information System and Database.

Finally, we will look at future activities and the way forward for our collaboration.

Our dialogues started a long time ago, but I see today’s meeting as a wonderful deepening point — this long-overdue formalization of our relationship will no doubt strengthen over time. The African continent is vast, and has remained largely unmapped in terms of energy resources and energy use. It is time to put this dynamic and growing continent on the energy map.

OPEC is committed to Africa and we highly value these dialogues, which will help fill in knowledge gaps around our promising region. 

I wish all of us a very fruitful meeting. Thank you.

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General