Remarks by OPEC Secretary General at the 12th Kazenergy Eurasian Forum

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the 12^th Kazenergy Eurasian Forum, Kazakhstan Energy Week, 26 September 2019, Nur-Sultan, Kazakhstan.

Excellencies, delegates, ladies and gentlemen,

It is my great pleasure to be here in the beautiful capital city of Nur-Sultan on the occasion of Kazakhstan Energy Week to participate in this 12^th Kazenergy Eurasian Forum.

Allow me to first recognize the Prime Minister of Kazakhstan, His Excellency, Askar Mamin. On behalf of OPEC, allow me to thank you for your excellent leadership and loyal support of Kazakhstan’s active and effective participation in the OPEC-Non-OPEC Declaration of Cooperation, the DoC. I am also extremely grateful for the immense contributions of your predecessors: His Excellency, Bakhytzhan Sagintayev and His Excellency, Karim Massimov. These skilled and able statesmen were highly supportive of Kazakhstan’s participation in the consultations that led to the monumental Ministerial decisions, and then eventually the implementation phase of the DoC. Mr. Prime Minister, OPEC looks forward to your ongoing contributions as, together, we seek to forge a lasting stability in the global oil market.

Finally, I would like to thank His Excellency, Kanat Bozumbayev, Minister of Energy, for the invitation to take part here at this important event, and for his dedicated efforts as a participating non-OPEC member of the DoC. I congratulate you and the Organizing Committee on the very impressive and wide-ranging program you have put together for this week-long event, which has risen in stature to become one of the top global industry gatherings.

Excellencies, ladies and gentlemen,

This city, formerly known as Astana, was renamed in March of this year to honour Kazakhstan’s first President Nursultan Nazarbayev, who faithfully served this country from 1990 until March of this year. The renaming of the capital city was a fitting gesture for this founding father, a visionary leader who brought this nation through nearly three decades of steady development and progress.

He was a staunch advocate for unity and cooperation, which he knew were only possible through peace and dialogue.

He once said, and I quote: “We have to acknowledge peace is in danger and mankind still has not realized the priority to be given to world dialogue versus armed conflict and bloodshed.”

No matter one’s background or heritage, he knew that together, we are stronger.

He has said, quote: “Interethnic and spiritual accord is our strategic resource, the basis for progress of our society and state.”

This great leader repeatedly throughout his illustrious career sowed the seeds of collaboration and dialogue, and now those seeds are blossoming through Kazakhstan’s participation on the international stage through the DoC and CoC.

Nazarbayev’s legacy is evident today when you drive through this metropolis of just over 1 million people and witness a truly magnificent cityscape with gleaming skyscrapers dotting the horizon. It is indeed a living tribute to the advancements this country has achieved over the years.

This impressive progress of today is rooted in Kazakhstan’s rich history of intellectual thought and scholarship.

10^th century Kazakh scholar and intellectual Abu Nasr Al-Farabi is widely regarded as a leading philosopher in the Islamic world. His works in various fields, including religion and science, have influenced, among others, Avicenna, Averroes and Maimonides, who followed in his footsteps. A leading founder of Peripatetic philosophy in the East, he became known as “The Second Teacher” after Aristotle.

Al-Farabi has had such an impact on this country and its culture that Kazakhstan named its leading university after him. The Al-Farabi Kazakh National University is the leading institution of higher education in Kazakhstan and the first to be certified to offer a full range of academic studies. This impressive institution is cultivating the top talent in Kazakhstan and continues to provide its oil and gas industry with the high-quality staff it needs for the future.

Excellencies, ladies and gentlemen,

The success story of which I speak would not have come to be without Kazakhstan’s rich blessings of mineral resources, which it has effectively developed to propel this country forward to become a leading economy in the region of Eurasia.

I think the delegates here today are very aware of this country’s rich past, with more than 120 years of experience in the oil industry!

With massive investments in its energy sector, Kazakhstan is now seeing the fruits of its labour as major projects, such as the giant Kashagan field and the equally impressive Tengizchevoil project, are helping provide significant boosts in liquids production capacity, thereby ensuring security of supply to the market. This is just the ‘tip of the iceberg’, though, and I am certain there are still many chapters to be written in the ongoing success story of this country.

Excellencies, delegates, ladies and gentlemen,

Over the past few months, the global oil market has been plagued by uncertainty, due mainly to ongoing trade disputes, softening demand and geopolitical developments. This prevailing uncertainty was aggravated further with the recent attacks on the Abqaiq facility and Khurais oil field in Saudi Arabia. In a matter of minutes, an estimated 5.7 mb/d of crude oil production were taken off the market. In the immediate aftermath, the oil price jumped by more than 18%, the highest volatility in 30 years!

The rapid response from the Government of Saudi Arabia and Saudi Aramco to restore production as quickly as possible was absolutely essential in calming the market’s fears of extended volatility. I commend Minister of Energy, HRH Prince Abdulaziz bin Salman, for his swift action in responding to this unprecedented attack. He has also vowed that Saudi Arabia will maintain its production levels as agreed at the Joint Ministerial Monitoring Committee meeting on 12 September in the UAE.

Let me emphasize here that any disruption to the steady and secure supply of oil and gas products anywhere in the world is counterproductive and detrimental to the industry and to the wider global economy. OPEC is firmly committed to market stability and remains a dependable, reliable source of supply for its customers worldwide.

Excellencies, delegates, ladies and gentlemen,

Another pressing issue in our industry right now is climate change. The 74^th Session of the United Nations General Assembly is meeting this week in New York City and this topic is high atop the agenda.

In fact, UN Secretary General, Antonio Guterres, has convened a Climate Summit under the theme ‘Climate Action Summit 2019: A Race We Can Win. A Race We Must Win.’ The goal of the Summit is to mobilize high-level political and economic support to advance implementation of the 2030 Agenda for Sustainable Development.

The outcomes of this Summit will feed into the UNFCCC process by contributing to the 25^th session of the Conference of the Parties (COP 25) to the UNFCCC in December 2019.

Today, I would like to urge you to consider the facts. On November 5^th, we will publish the 2019 World Oil Outlook which presents our long-term forecast for the oil and gas industry. This, and every other publication we produce, is based on rigorous research and analysis, not on theories.

And our research tells us that oil and gas, and this industry as a whole, are here to stay.

The fact is, all forms of energy will be required to meet future demand; it is not about choosing one form of energy over another. Oil and gas are expected to remain the fuels with the largest share in the energy mix throughout the forecast period to 2040.

We also expect to see robust growth in long-term global oil demand, which is expected to rise to almost 112 mb/d by 2040. Most of this will come from developing countries with high population growth rates, expanding middle classes and strong economic growth.

Another notion I want to dispel is that electric vehicles are on the verge of replacing conventional vehicles. This is simply inaccurate. Our research tells us that although the rate for new sales of electric vehicles is very high, the share of the total stock in 2017 was only 0.3% and 1.3% of total vehicle sales. We will see the long-term share of electric vehicles in the total fleet reach a level of around 13% by 2040, but conventional vehicles will still see the majority of growth of the total vehicle fleet.

And finally, let us not underestimate the vital role of technological innovation, energy and fuel efficiency enhancements and carbon capture, utilization and storage, which will provide a balanced and effective approach to meeting the world’s energy needs in an environmentally friendly way.

Delegates, ladies and gentlemen,

To make headway in any of these areas I have just outlined, we must have the full cooperation and support of ALL industry stakeholders.

The participating producers of the Declaration of Cooperation, in which Kazakhstan continues to play a key role, have created the blueprint for effective international energy cooperation. So, let us now go forth and build upon this through the Charter of Cooperation, which was endorsed at the 6^th OPEC-Non-OPEC Ministerial Meeting on 2 July 2019. The Charter is an extension of the highly successful Declaration of Cooperation, providing a permanent platform for discussion and cooperation.

In this regard, I again want to express my sincere appreciation to the government of Kazakhstan for its extremely valuable contributions and loyal participation. We look forward to working closely with you in the years to come.

I wish you all a highly successful week of meetings.

Thank you.