H.E. Sameh Fahmy, the Minister of Petroleum of Egypt, underscores from the Ministers’ Rostrum the need for more international co-operation, “true multilateralism”, in dealing with global energy challenges. As we approach the next IEF Ministerial, he identifies some key forces that will shape the future of energy. He underscores Egypt’s focus on producer-consumer dialogue as a multilateral relationship and that Egyptian energy interests in the Mediterranean basin and elsewhere remain multilateral.
Minister Fahmy convened the “ First Global Energy Roundtable” of regional energy ministers in Cairo in November 2006. He delivered a keynote address to the IEFS-OMC joint plenary session on ”the Mediterranean Dimension of Global Energy Security” at the 8th Offshore Mediterranean Conference in Ravenna, Italy in March 2007.
Minister Fahmy is also a Member of the Shoura Council of Egypt. Before being appointed Minister in 1999, he served as Chairman and Chief Operating Officer of Middle East Oil Refinery and Middle East Tankage and Pipelines and earlier held various positions in the Egyptian General Petroleum Corporation.
As we approach the 11th IEF Ministerial in Rome next year, I would like to contribute some thoughts on the outlook to multi-lateralism from the Ministers’ Rostrum of the Newsletter.
As we know, the energy world is facing uncertain times and there is much discussion as to how the world will look in the future. A vital part of the world order has always been the importance and reliance on partnerships, alliances and global institutions in dealing with the world’s challenges.
However, given the size of the current challenges, neither individual nation states nor even regional groups of states are large and powerful enough to face these issues. We all need more, not less, international cooperation. We need true multilateralism.
In attempting to set that scene, I will try to take a general view of the current state of our industry and will seek to identify what I believe are some of the key forces that will shape the future of energy over the next two or three decades and possibly beyond.
We live in a number of different worlds, the traditional world of upstream has had to move searching for and developing more difficult reservoirs. Additionally, we must make the most of existing fields using innovative technology. Although important new discoveries will continue to be made both in established producing basins and some frontier areas, they are unlikely to change the distribution of hydrocarbons on our planet significantly.
If we accept this, then most of the oil demand growth in the coming decades will have to be met from the Middle East and Latin America and having Egypt in the hub of the energy world in addition to its unique location being on one of the most busy marine routes worldwide so our energy interests will be and remain multi-lateral within the Mediterranean basin and others regions.
It is also worth mentioning that gas demand is substantially escalating due to the world currently demanding cleaner energy. Developing countries can, by using more gas, avoid much of the environmental pollution of the early stages of industrialization. In addition, also the rise of new gas technologies will have a major impact on demand in both developed and developing countries over the next decades.
If we foresee great changes in the world of gas, what do we have to say about prospects for the oil products businesses of manufacturing, marine and marketing? Here we find ourselves in yet another world. A world of contrasts with the lack of capacity in refining in the slow-growing markets of Europe and North America and too many tankers chasing too few cargoes and yet rapidly growing economies in the Asia-Pacific region, India and Latin America, which require massive investments in infrastructure if their needs are to be satisfied.
In today’s media, we are presented with dramatic images demonstrating the effects of environmental degradation. Many questions remain unanswered e.g.
- What are the facts about urban air pollution?
- The Global Warming phenomena?
- Destruction of the rain forests?
- What action should be taken today and in the future?
One thing is clear; our industry must continue to strive to find effective ways of contributing objectively to revamping the global climate.
Last but not least, multilateralism is usually a government to government concept. Egypt focuses on producer-consumer dialogue as a multilateral relationship and by evidence we have hosted the Roundtable of Ministers as a tangible action to highlight that fact of multilateralism in handling our industry for the best practice in our relations with customers bearing in mind that throughout the hydrocarbon value chain there are frequent producer-consumer interfaces.
As for the end consumer, we always value their concerns from various aspects:
- Energy security
- Environmental friendliness yields
- Quality products assurance
These concerns actually mirror the concerns of the Egyptian Hydrocarbon Sector for the forthcoming era.