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OPEC bulletin 2/18

S p o t l i g h t

the Federal Ministry for Economic Affairs and Energy of the Federal

Republic of Germany, also joined the stage, along with Fatih Birol,

Executive Director of the International Energy Agency.

A similar session afterwards applied these same considera-

tions to the private sector and comments were elicited from var-

ious private sector petroleum exploration and oil field services

companies. Participants included CEOs of companies like Petrofac,

Tellurian Inc, Hunt Consolidated Energy and the Daesung Group.

The session, which was facilitated by

Summer Said, Middle East

Energy and OPEC Correspondent at

The Wall Street Journal

, and

John Defterios, explored various interrelated questions such as:

What does the energy market landscape look like in 2018 and what

trends should we be watching?

Two other sessions — on investment and geopolitical strate-

gies for doing business with IR Iran, particularly amid the uncer-

tainty in the Gulf region, and a specialized session on ‘next gener-

ation energy technology’ (as well as broader trends in digitization,

artificial intelligence, and automation, and how these might affect

the energy industry) — also took place. Fittingly, four academ-

ics and researchers from the renowned Massachusetts Institute

of Technology (MIT) participated in this panel, including Robert

Armstrong, Director of MIT’s Energy Initiative.

By the early evening, the time came for a little bit of fellowship,

and the first day of the Forum was capped off by a visit for all par-

ticipants to the Louvre Abu Dhabi. There, on a terrace and under a

moonlit sky, officials mingled with scholars, while heads of organi-

zations and analysts chatted animatedly with representatives from

financial market firms and energy companies.

A dedicated OPEC session

The pace picked up on the second day of the Global Energy Forum

as numerous sessions were held back-to-back. These varied widely

in scope and content — but one stood out: a plenary session facili-

tated by John Defterios devoted entirely to discussing “The Future of

OPECand the Oil Markets”. With the participation of Dr Abdalrahman

Osman Abdalrahman, Minister of Petroleum and Gas, Republic

of Sudan; Suhail Mohamed Al Mazrouei, Minister of Energy and

Industry of the UAE; Helima Croft; Sun Xiansheng, Secretary General

of the International Energy Forum and of course Mohammad Sanusi

Barkindo, OPEC Secretary General, the session was lively.

Asked the first question of the panel about the future of OPEC, the

SecretaryGeneral replied: “Wehave survived somany funerals… [that]

we areproudof being theproverbial catwithnine lives”. Heproceeded

toexplainhow, in thepastyear andahalf, OPEChasbeenable tomake

history with a series of consultations and voluntary adjustments to

which both OPEC and ten non-OPEC countries have conformed.

“Thanks to the visionary leadership of our ministers from

OPEC and non-OPEC countries, together for the first time we are

building [a] global platform,” he said. Looking back to the historic

Declaration of Cooperation of December 10, 2016, which adjusted

oil output by an aggregate 1.8 million b/d, and which has since

been extended to the end of 2018, he noted its importance. “We

have turned the page … and when the final chapter is written, what

we did with our non-OPEC friends will be written in gold.”

Asked about the market outlook, especially in regard to growth

and demand, Barkindo said the Organization continues to remain

vigilant. “On the whole, demand has not been this robust for so

many years, and global economic growth has not been this healthy

since before the last financial crisis,” he added, citing the IMF’s esti-

mates of 3.7 per cent growth for 2018. “The US is near full employ-

ment, and between now and then, an additional 1.8 billion people

will be coming into this world,” he said.

But the Secretary General also emphasized the need to address

energy poverty. “Right now, we have over two billion people in Africa,

Asia andSouth America without access to commercial energy. So, oil

and gas will continue to dominate the energy basket. We have nearly

1.5 trillion barrels in total reserves. How can you leave those assets

stranded while so many people are living in acute poverty?” These

are the kinds of questions that those working on developing energy

policy for countries around the world need to keep in mind.

The remains of the second day

In addition to the fascinating session focused on OPEC, there were

nearly a dozen sessions, workshops or report launches on the sec-

ond day of the Forum. It was heady, a bit dizzying and stimulating.

There was an opening morning session titled ‘America’s role in the

world: an energy strategy’. Afterwards, a special session dedicated

to ‘The future of transportation’ and the impact of oil demand was

held. It entertained questions ranging from the meaningfulness or

usefulness of the term “peak demand”, technological innovations

in the transport sector, and questions about future oil demand

trends, especially given the move away from fossil fuel-based vehi-

cles in some countries.

The following session was dedicated to natural gas, and partic-

ipants — who included Mohamed Bin Khalifa Al-Khalifa, Minister

of Oil of the Kingdom of Bahrain, and Gabriel Mbaga Obiang Lima,

Minister of Mines and Hydrocarbons of the Republic of Equatorial

Guinea — explored what increased gas production from the United

States and elsewhere is doing to prices and how we are moving

toward a more global or integrated gas market.

Sessions on economic diversification followed, as well as the

enhanced use of artificial intelligence to assure security at oil oper-

ations and facilities, as well as the changes taking place in electric-

ity and renewable energy. In fact, discussions on the “electrification

of everything” took place in one specialized session, which entailed

a consideration of how the electricity sector is slowly becoming a