The Secretary-General of the Organization of Arab Petroleum Exporting Countries (OAPEC), Ali Sabt Ben Sabt, stressed the importance of fossil fuels for all countries of the world, and that the transition to clean energy does not mean dispensing with oil and gas in the near future.
This came in the context of a press statement issued by the secretariat – and “energy” obtained a copy of it – today, Tuesday, on the current developments in the energy system globally, coinciding with the repercussions of the Russian war on Ukraine, which erupted since last February.
Ben Sabt explained that nearly a year has passed since the “road map to reach zero emissions (carbon neutrality) in 2050”, which was published by the International Energy Agency in May 2021, and since that date, the Organization of Arab Petroleum Exporting Countries has issued a series of articles In it, she explained the role that the Energy Agency called for, and warned of the danger of a decline in investments in the field of exploration and production.
He pointed out his continuous affirmation of the importance of injecting investments into the oil industry in general, and in the field of exploration and production in particular, to maintain the balance of energy markets around the world, and to maintain stable production that meets global demand and faces fluctuations in supply sources in emergency situations, especially geopolitical changes.
He said, “In the framework of the announced confrontation after the outbreak of the Russian-Ukrainian crisis, most European Union countries, in cooperation with the United States of America, recently called to stop using Russian oil, and to search for alternative countries to compensate for their imports, and within the feverish European-American endeavors in this field, the oil markets responded.” A noticeable rise in the prices of oil, gas and oil derivatives, which posed great pressures that the current US administration did not find an outlet for except by trying to throw the ball into the court of the other.
Law No to OPEC
The Secretary-General of OAPEC touched on the passage of the Judicial Committee of the US Congress, the No-OPEC bill, which was called by the acronym “NOPEC”, explaining that it is a law directed to members of the Organization of Petroleum Exporting Countries (OPEC), and its first version was established in 2000, in an effort to raise Immunity for national oil companies in OPEC countries.
He said that the bill aims to enable the US Department of Justice to take legal action against these companies under US antitrust law, under the pretext of “attempting to limit the supply of oil, and its impact on prices.”
He continued, “Various versions of the bill have been presented and debated in the US Congress for nearly 20 years, but that bill has never been passed into law, and has seen opposition from major business groups fearing the consequences that would hit the US oil and gas industry, the most important of which is the American Chamber of Commerce. And the American Petroleum Institute (API) and shale oil producers, who, according to estimates by the Organization’s General Secretariat, have achieved revenues of more than $1.2 trillion, from the year 2000 to date.
He pointed out that “by looking at the recent past, it was clear that the high oil prices in the past contributed to encouraging investment in the field of shifting towards alternative sources of energy, but the current perspective confirms beyond any doubt that these alternatives are still far from the possibility of removing fossil energy sources off their throne.
The Secretary-General of OAPEC added that despite rumors that wind and solar energy are the solution to the crisis that could result from the exit of Russian oil from the markets, the reality is that the share of renewable energy sources, after more than 20 years of expansion and research, has only been Less than 6% of the energy mix consumed globally in 2020.
He explained that the installed capacity of these energies is not distributed to ensure that they constitute an effective contribution to the energy mix in emergency situations, such as extreme weather, or unexpected geopolitical changes – as is the case in the Russian-Ukrainian crisis – as Europe’s consumption of renewable energy in 2020 represented about 28% of the world’s total consumption, but more than half of that energy is concentrated in only 5 countries (Germany, Britain, Spain, France, Italy), and it is no secret that the rare metal and metallic elements form the backbone of the renewable energy industry.
At the same level, no party has hidden that the calls for reducing carbon dioxide emissions have become less intense, as priorities have been modified, as securing alternative sources of Russian oil and gas has become more important than the issue of the environment, not only at the present time, but in the long term. According to the statements of the Secretary General of OAPEC.
Ben Sebt explained that Europe’s efforts have begun to build stations to receive liquefied natural gas as a possible alternative to Russian gas, and some stations operating on coal have returned to work, after stopping them for purely environmental reasons.
He stressed that despite the recent discoveries made in some countries of the world, and the recent development of some fields, which always attract attention, mature fields are the backbone to meet energy demand, as they contribute to more than 66% of oil production in the world, and the role of oil production is not hidden. Mature fields in the Arab region in this field, which bear the burden of meeting the growing domestic demand, in addition to meeting a significant part of the global demand.
He continued, “Since the main objective of exploration operations is to access the best available resources, the oil industry, in order to obtain the highest return on its investments, always depends on modern technologies to overcome the obstacle of the volatile oil price environment, and the obstacle of the length of time required to implement oil projects.”
He added, “However, modern technologies in themselves represent a significant challenge, as technological changes are growing rapidly, largely linked to the incentives that support the development of this technology, and the decline in investments in the field of exploration and production clearly means the possibility of a decline in oil supplies and a decrease in production capacities, This affects prices and the global economy.
He explained that the world witnessed a decline in discoveries in 2021, and how this affected the decline in oil and gas reserves in the world by 1% between 2020 and 2021, while estimates had shown that world oil reserves increased by 2.6% between 2019 and 2020.
Investments in oil and gas
The Secretary General of OAPEC stressed that the decline in investments also leads to a decline in the development of the reserves of the known fields, which means the inability to compensate for what is produced from them, and here the importance of the cost factor must be emphasized, as the total amount of oil in the ground does not matter in itself as much as the quantities economically productive.
He said: “The arrival of oil prices to an acceptable level for producers and consumers contributes to an increase in investments in exploration, drilling and infrastructure construction, while production reserves decrease with lower prices or with an increase in the cost of a barrel, as some of them become outside the margin of economic return.”
He added that – in general – and despite the rise of many voices in recent years in support of the transition or the energy transition and its subsequent stages, this transformation – if successful – needs a not short period, which means that oil and gas will remain among the most important sources of energy in the world. the world in the foreseeable future, and it can even be emphasized that the “post-oil” era is just a loose expression; Because the world is heading today to use a mixture of energy sources in which the share of one source may rise at the expense of another, but it will certainly not give up oil and gas.
The Secretary General of OAPEC expected that oil prices would remain at reasonable levels that would be acceptable to producers, consumers and investors alike.
He added that the current conditions the world is going through confirms the strategic importance of the member states of the Organization of Arab Petroleum Exporting Countries as a safety valve for the energy system in the world, in terms of its location in relation to global markets on the one hand, and on the other hand, it owns 54.5% of the total global oil reserves, and produces More than 27.5% of the world’s total production of hydrocarbon liquids, it also owns 26% of the world’s natural gas reserves, and markets more than 15% of the total marketed gas in the world.
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