H.E. Akira Amari was appointed Minister of Economy, Trade and Industry in September 2006. He has held many senior government positions, including those of Parliamentary Vice-Minister of International Trade and Industry, Minister of Labour, and more recently as the Acting Chairman of the Policy Research Council.
Addressing crucial energy challenges through a dialogue between producers and consumers is an essential task and a key to global energy security. In particular, the International Energy Forum, which brings together some 60 energy producers and consumers from around the world, together with major international organs, serves as the most important arena for producer-consumer dialogue. The Joint Oil Data Initiative, operated by the IEF Secretariat, plays a significant role in the efforts for information sharing among energy producers and consumers, thus enhancing market transparency and stabilizing the international oil market.
The current situation brought on by high crude oil prices, which currently hover at around US$60 a barrel, may be likened to a “quasi-Oil Crisis,” although the price volatility has diminished recently. While high crude oil prices are attributable to increasing demand primarily in newly emerging nations, it is difficult to deny that insufficient upstream investment on the supply side has also played a significant part. The slow-paced growth of the present supply capacity may be ascribed to a slowdown in upstream investment during a period from the late 1980’s to the 1990’s in which crude oil prices remained rather stable at low levels below $20 a barrel.
In the future, global energy demand is projected to further expand by 50% by 2030. Massive investment, estimated at around $20 trillion, including $8 trillion in the oil/gas sector, will be required to respond to such huge growth in demand. To secure stable supplies in line with the surging global energy demand, it is essential that both oil producing and consuming countries ensure necessary investment in all stages from upstream to downstream, and launch efforts to ensure market stabilization.
It is worth noting, however, that oil producing countries and/or regions where the entry of foreign capital has been restricted are said to control about half the world’s total oil reserves. Also, nationalistic moves to monopolize resources that have surfaced in some resource-rich countries are a cause of concern. This calls for the need for producers and consumers to share a common understanding that foreign investment accompanied by the introduction of new technology would serve the benefit of both parties. Moreover, stable, long-term returns commensurate with high investment risks are crucial to energy sector investment, which points to the importance of a transparent, stable and highly reliable legal and regulatory framework in the producing countries.
In response to the burgeoning global energy demand, we in the energy consuming countries will need to secure necessary investment in energy-related infrastructure including oil refineries and related facilities through the promotion of national understanding on the importance of energy infrastructure, rationalization of the approval and licensing processes, and other means. Also, it is important to direct the necessary investment into the technological development of exploration, drilling and other operations to mitigate the technological and financial risks involved in upstream development as well as related areas.
As a member of the Executive Board of the IEF Secretariat, Japan is dedicated to making a positive contribution to the 11th IEF to be held in Rome in spring 2008. In May this year, Saudi Arabia and Japan will co-host in Riyadh the Asian Regional Petroleum Cooperation Second Roundtable Meeting, which will provide a stage for discussions among major producers and consumers in Asia. Japan hopes to build on the achievement of the Roundtable for the greater success of the 11th IEF.
The Japanese government believes in the importance of collaboration between the IEF and related international organizations including the IEA. Mr. Nobuo Tanaka, formerly of Japan’s METI, has been appointed as the next IEA Executive Director. Japan is committed to give more support for the enhanced collaboration between the IEF and the IEA.