Opening remarks by OPEC Secretary General

Delivered by HE Mohammad Sanusi Barkindo, OPEC Secretary General, at the Presentation of the OPEC World Oil Outlook 2019, 13 November 2019, ADIPEC, Abu Dhabi, UAE.

Excellencies, ladies and gentlemen,

I would like to thank the Government of the United Arab Emirates, its Energy Ministry, ADNOC, as well as the organizers of ADIPEC, who have provided us with this platform to present our recently released 2019 World Oil Outlook (WOO).

ADIPEC, now in its 35th year, and held under the Patronage of His Highness, Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, has evolved into one of the world’s top-tier international energy conferences and exhibitions.

For OPEC, this high-calibre event, hosted by our Member Country, the UAE, is a yearly highlight on our events calendar, and a must for the rollout of our annual WOO.

In particular, I would like to thank my good friends, HE Suhail Mohamed AI Mazrouei, the UAE’s Minister of Energy and Industry and HE Dr Sultan Ahmed Al Jaber, the UAE’s Minister of State and the CEO of ADNOC Group.

HE Suhail has been a staunch supporter of OPEC, an exemplary Conference President in 2018, and a great enthusiast for the OPEC Secretariat’s research and analysis, the pinnacle of which is our WOO.

HE Dr Sultan has been at the forefront of driving ADNOC to become one of the world’s leading oil and gas companies, a vital cornerstone of the UAE’s success as a nation.

Excellencies, ladies and gentlemen,

This year’s WOO is the 13th edition.  It has evolved in many ways since it was first launched in 2007, but its key guiding principle has remained the same: to support sustainable market stability and to provide a platform from which to review, analyze and evaluate how the oil and energy scene may develop.

The issue of sustainable market stability, as well as helping return balance to the market, can also be seen clearly in the success of the ‘Declaration of Cooperation’ between 24 OPEC and non-OPEC producers, as well as in the July 2019 endorsement of the ‘Charter of Cooperation’, which provides a longer-term institutional framework for this landmark cooperation.

Allow me now to provide you with some key highlights and takeaways from this year’s Outlook, before my colleagues from the OPEC Secretariat undertake a panel discussion to drill down in more detail on various aspects of the publication.

Total primary energy demand is set to expand by a robust 25% between 2018 and 2040

This will be driven by global economic expansion, which in 2040 is expected to be double the size it was in 2018, and population growth, which is projected to reach around 9.2 billion in 2040, an increase of around 1.6 billion from today’s level.

Moreover, it is also important to recall that close to one billion people still have no access to electricity and almost three billion people still lack access to clean energy fuels.  It is a universal obligation to address the major challenge of energy poverty

All forms of energy will be required to help meet this expanding demand in a sustainable way.

Renewables witness the largest growth in percentage terms, with significant expansion envisaged in OPEC Member Countries, particularly here in the UAE; natural gas the largest growth in terms of volume; and oil remains the fuel with the largest share in the energy mix to 2040.

In fact, oil and gas combined are still expected to make up more than 50% of the energy mix by 2040.  In this regard, it is important to stress that we do not see any reputable publication in their reference outlooks, forecasting that renewables will come anywhere close to overtaking oil and gas in the decades ahead.

The non-OECD drives oil demand with expected growth of 21.4 mb/d by 2040, compared to 2018, whereas the OECD region is estimated to contract by 9.6 mb/d. Total oil demand is estimated to reach 110.6 million barrels a day (mb/d) by 2040.  

Petrochemicals at 4.1 mb/d, road transportation at 2.9 mb/d and aviation at 2.4 mb/d are the main sectors for long-term oil demand growth. From the mid-2020s, however, non-OPEC sees a steady decline

Thus, OPEC Member Countries will be required to meet the majority of the longer-term demand requirements. Demand for OPEC liquids is projected to increase to around 44.4 mb/d in 2040, up from 36.6 mb/d in 2018.

In the downstream, crude distillation capacity additions of around 8 mb/d – close to 50% of the estimated total capacity additions to 2040 – are expected between 2019 and 2024, with over 70% in the Asia-Pacific and the Middle East

This points to the potential for significant excess refining capacity in the medium-term period.

Global crude oil and condensate trade is estimated to remain relatively flat at around 38 mb/d between 2018 and 2025, before increasing to around 42 mb/d by 2040.

The major oil trade route remains the Middle East to the Asia-Pacific, with the UAE continuing to be a key hub.  Total Middle East exports are set to increase by around 7 mb/d between 2025 and 2040 to reach close to 23 mb/d.

On the investment side, requirements across the upstream, midstream and downstream are estimated at around $10.6 trillion in the period to 2040.

OPEC Member Countries remain fully committed to investments across the whole industry value chain, and the issue of returning global investments is a core focus of the ‘Declaration of Cooperation’.

The Outlook also reviews a plethora of technology innovations, policy issues and energy matters related to sustainable development.

A key message to highlight is the importance of technologies in reducing emissions. We need to look for more efficient technological solutions everywhere, across all available energies, and utilize all available and innovative options to reduce emissions from the energy sector. The oil and gas industries have to be part of the solution.

The WOO is not about predictions and should be viewed as a tool of reference to stimulate discussion and debate among industry stakeholders. This is vital given the crossroads that the energy industry finds itself at.

And let me stress, year-on-year, we continue to push the boundaries of our research, and to provide more data and analysis that can stimulate both debate and action.

This reminds me of a sagacious quote from the visionary Founding Father of the UAE, Sheikh Zayed bin Sultan Al Nahyan. This gracious and humble man once said:

“We were like those who had climbed a mountain and reached the top. When we looked down, we still wanted to go higher to realise our goals. Despite all the achievements, we still have an ambition for more.”

His foresight, his discernment and his vision are a guide for us all.

Thank you to everyone here that is in attendance.  We appreciate you listening, and my colleagues who have played such an important role in putting together this Outlook, alongside many others at our Secretariat, are anticipating robust questions and a constructive critique of the WOO.

OPEC Secretary General delivers his remarks at the Presentation of the World Oil Outlook 2019

OPEC Secretary General delivers his remarks at the Presentation of the World Oil Outlook 2019

The presentation was followed by a panel discussion

The presentation was followed by a panel discussion

HE Mohammad Sanusi Barkindo speaks to Members of the Press at ADIPEC 2019 in Abu Dhabi

HE Mohammad Sanusi Barkindo speaks to Members of the Press at ADIPEC 2019 in Abu Dhabi