Opening remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 1st High-level Meeting of the OPEC-GECF Energy Dialogue, 4 November 2020, via videoconference.

Your Excellency, distinguished colleagues, ladies and gentlemen,

It is an honour to welcome you to this 1st High-level Meeting of the OPEC-GECF Energy Dialogue.

I want to recognize His Excellency, Yury Sentyurin, Secretary General of the Gas Exporting Countries Forum, without whom we would not be having this meeting here today.

Excellency, I remember the very engaging discussions that we had back in February of 2019 on the sidelines of the 9th IEA-IEF-OPEC Symposium on Energy Outlooks in Riyadh, Saudi Arabia. We both agreed that closer cooperation between our two organizations was not only important, but would be mutually beneficial.

This meeting paved the way for the subsequent signing of a memorandum of understanding in October of 2019 during Russian Energy Week in Moscow. The MoU envisions a close partnership through the “exchange of knowledge, experience, views, information, data and practices in areas of mutual interest,” and sets the groundwork for further cooperation.

From the outset, OPEC and the GECF have much in common. We have some of the same Member Countries and share similar founding principles, values and priorities. And together, we supply a large part of the world’s energy needs.

Excellency, the seeds planted during our initial discussions in Riyadh and Moscow and the subsequent signing of the MoU have culminated in this event here today -- the inaugural edition of the High-level Energy Dialogue with the GECF.

In the lead-up to today’s meeting, both parties have held two technical meetings -- the first one in summer, on June 22nd and the second on the 19th of October. These meetings served as valuable forums for engaging discussions on issues of common concern and helped us establish a solid platform for future collaboration. They also provided us the opportunity to chart out the future path of the Dialogue, both at the technical and policy-levels.

On July 9, 2020, OPEC attended the 3rd GECF Annual Workshop on Promotion of Natural Gas Demand, which provided an in-depth look at the ever-evolving landscape of natural gas demand and prospects for demand growth going forward. 

Another area of collaboration worth noting is GECF’s expert contribution to our 2020 World Oil Outlook on the subject of liquefied natural gas, entitled: ‘LNG prospects in the post-COVID-19 era’. This provided expert insights into the very dynamic issue of LNG, adding value to this flagship publication. In turn, we look forward to having the opportunity to contribute an oil-related feature to the GECF’s flagship publication, the Global Gas Outlook.

Thus, as you can see, in a very short timeframe, we have launched with great success this mutually beneficial partnership, and look forward to building upon these key milestones today.

Excellency, colleagues, ladies and gentlemen,

Today’s Meeting has two sessions. The first will feature presentations from both parties on the short, medium and long-term impacts of the COVID-19 pandemic on the global energy markets.

In Session 2, OPEC will give a presentation on the Declaration of Cooperation, which is now in its fourth year, and on the longer-term Charter of Cooperation. Finally, we will have an opportunity to discuss the Dialogue’s work programme and the roadmap for the next year. 

Before we continue, allow me to say a few words on the oil market outlook.

This year has been defined by the COVID-19 global pandemic, which, in addition to being a human tragedy, has wreaked havoc upon the energy markets.

We have witnessed record demand contraction, which, in 2020, is expected to be down by roughly 10%, to a level of around 90 mb/d.

The market hit an all-time low on April 20, 2020 in what has been termed “Black Monday”, one of the worst oil shocks in history. The industry faced a potential crude oversupply of nearly 1.3 billion barrels. There were even deep concerns that some storage hubs could actually reach tank tops. Since then, the situation has eased, although some countries are still dealing with high inventory levels.

In the wake of this monumental crisis, strong action needed to be taken urgently to avert any further destruction to the market. In a bold and proactive response, OPEC and the non-OPEC oil-producing countries in the Declaration of Cooperation undertook the largest and longest production adjustments in the oil industry’s history in April.

In this regard, allow me to recognize Her Excellency, Rocio Nahle, Energy Minister of Mexico, who is attending this meeting today, and thank her for Mexico’s support in ensuring these historical ministerial decisions were achieved unanimously.

This courageous response by the DoC countries helped rescue a market in turmoil, drawing down bloated inventories and helping improve investor confidence that had been stuck in a gloomy mire. This DoC’s sacrificial efforts helped put the oil market on track to rebalancing and helped promote economic recovery. These efforts continue to be lauded at the highest levels of government and from energy stakeholders in both the public and private sectors worldwide.

Although we have made great strides to bring balance back to the oil market, enormous uncertainties remain as second waves of COVID-19 sweep across many regions of the world, dimming our hopes for a rapid return to rising oil demand and economic growth. In 2021, however, we see oil demand growth recovering to a level of around 6.5 mb/d.

The longer-term horizon paints a more positive picture. We forecast global primary energy demand rising by a significant 25% in the period to 2045. This jump in demand will be fuelled by two main factors -- a massive doubling of GDP growth, combined with a jump in global population by roughly 1.7 billion people by 2045.  

In terms of renewable energy, we expect it to grow faster than any other source of energy, at an average of around 6.6% annually, but oil and gas will continue to make up the lion’s share of the energy mix throughout the forecast period. Oil is forecast to supply nearly 28% of global needs, followed by gas at around 25%.

Let me be clear, though, for the umpteenth time, that the world will require all forms of energy to meet long-term energy demand while also contributing to addressing other pressing issues such as energy poverty. Both crude oil and gas will continue to be essential to meeting the dire needs of developing countries as they continue to develop and expand their economies. 

Another pressing issue is that of investment. We expect that a massive $12 trillion will be required for investment in all sectors from now until 2045 to ensure this industry continues to expand and prosper. We will need all stakeholders on board to ensure that policies are implemented ensuring the security of longer-term investments. The industry’s future will depend on this.

Excellency, colleagues, ladies and gentlemen,

We look forward to exploring these issues in more detail today as we move through our agenda. I would again like to thank my comrade, His Excellency, Yury Sentyurin, for his leadership and firm support for this Dialogue. I also commend the GECF’s excellent contribution to this year’s WOO. We believe this is the beginning of a long and fruitful cooperation between OPEC and GECF.

Allow me to close now with the inspiring words of Japanese writer Ryunosuke Satoro who once said, and I quote:

"Individually, we are one drop. Together, we are an ocean".

May this spirit of teamwork and solidarity pervade our deliberations today and in the future. 

Thank you.

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Mohammad Sanusi Barkindo, OPEC Secretary General

HE Yury Sentyurin, Secretary General of the Gas Exporting Countries Forum

HE Yury Sentyurin, Secretary General of the Gas Exporting Countries Forum