It may be premature to pass judgment on the outcome of the Seventh International Energy Forum (Riyadh, 17-19 November 2000); but many are hopeful that it may have succeeded in setting new parameters for cooperation and understanding between oil producers and consumers and may usher in an era more favorable to the world oil market.
The forum’s high profile was underscored by the presence of delegations from fifty four countries, many at ministerial level, and eight international organizations.
Topics at the forum included the global prospects for energy and its role in sustained development, restructuring the oil industry and market, the future of relations between oil producer and consumer nations, and technology and environment issues.
The forum took place at the end of three years of upheaval in the oil industry. The oil producers bore the brunt of changes in the first half of this period, when a sharp drop in oil prices left their economic growth floundering.
The second half witnessed a steady rise in prices that was closely monitored with concern by producers and consumers alike.
Both sides realized that they were in the same boat and that they needed to meet, talk, build on their common interests, and reconcile their differences. Issues naturally focused on price stability, the security of supplies, and environmental protection.
It is in the interest of all parties to work toward price stability owing to its importance for economic development and hence world energy demand growth.
The question of price was discussed in terms of the factors influencing it, ways of avoiding fluctuations, and mutual understanding on levels that serve the interests of producers and consumers alike.
It was pointed out that when prices drop below a certain level, they jeopardize the security of supplies, by reducing the rentability of investing in expanding reserves or production capacity.
When prices rise above a certain level, on the other hand, they impede economic growth.
It was apparent from the forum’s discussions on environmental issues that there are many aspects to be clarified, particularly those related to climate change.
The adoption of measures to halt global warming, particularly those aimed at restricting carbon dioxide emissions attributable to human activity should await greater scientific certitude regarding the phenomena itself and contributing factors.
Measures to reduce carbon dioxide would target hydrocarbons, which the forum agreed are vital for the world economy and for meeting future energy demand.
Compared with previous forums, the Seventh International Energy Forum represented a quantum leap forward. The hopes and concerns of the producers and consumers were examined in greater detail.
The resolve of the oil exporting nations was symbolized by a proposal made by His Royal Highness Prince Abdullah bin Abdul-Aziz Aal Saud, Saudi Crown Prince and First Deputy Prime Minister.
It called for the establishment of a general secretariat for the forum in Riyadh. The proposal was warmly welcomed by the participants.
The Secretariat would provide an international institutional framework for organizing the dialogue and for building bridges between producers and consumers.
The general secretariat will constitute a link between OPEC, grouping major petroleum producers, and the International Energy Agency, grouping major consumers.
Details regarding the establishment of the general secretariat are to be submitted to the Eighth Energy Forumwhich will be held in Japan in 2002 under the sponsorship of the UAE, as a producer nation, and Italy, as a consumer nation.
Regular meetings within this framework will undoubtedly help resolve differences among the parties, and introduce greater realism regarding the economic cost of alternative sources of energy and issues of the environment.
An exchange of studies, information, and views will help formulate future policy based on objective evidence.
A dialogue between producers and consumers is what OAPEC has been urging for many years.
The Seventh International Energy Forum has underscored the importance of such a dialogue and called for the establishment of a permanent general secretariat to develop it through enhanced data exchange.
The priorities of both sides have been given better expression and the areas of mutual interest have been identified, as have the areas requiring further understanding and exchange of views so that compromises can be reached that safeguard the interests of both sides.
The oil producing nations must avail themselves of the opportunities presented by the new platform.
They should express their views on essential issues concerning oil and the oil trade, backed by technical and economic studies and scientific facts.
This should help all parties to replace confrontation with the logic of understanding, which will be conducive to stable and transparent markets and enable the petroleum industry to flourish for the benefit of all concerned.
Source: www.oapecorg.org
© 2001 Mena Report (www.menareport.com)
