After years of neglect, 2012 has seen the issue of energy poverty advance up the agenda of the international community. Recognition has grown that "business as usual" policies will condemn billions of the poorest to life without modern energy services and that such services are essential to enable all aspects of  development progress.

To improve food security in the face of growing populations, food production in developing countries will have to nearly double by 2050. Higher yields will require more efficient use of water, fertilizers and seeds. Electricity can control and power irrigation equipment and allow rural communities to add value to crops by drying, processing and packaging. Mechanization makes a vital contribution to boosting industry by lowering unit costs and improving competitiveness. It is no coincidence that the expanding manufacturing economies of East and South East Asia made increasing electricity supply a priority in their development plans from the 1960s onwards. Electric lighting at the household and community levels can extend work and study hours and reduce security risks. Clinics need energy for lighting, diagnostic equipment and vaccine preservation. Power can make possible potable water supply and sewerage systems. All such progress can reduce child mortality, improve maternal health and facilitate the treatment of HIV/AIDS, malaria and other diseases.

Lack of access to electricity is not the only problem facing the energy poor. Clean fuels for cooking, heating and transport are often in short supply. A reliable and affordable supply of vehicle fuels is essential to transport goods to market. Diesel generators or hybrid diesel/renewable systems can provide mechanical power in the village to drive workshop equipment or irrigation pumps.   

Two main protagonists can play key roles in making energy accessible and affordable. The international community should set achievable goals, define realistic policies and provide high-level leadership: the governments of partner countries should respond to such leadership with determination and the political will to adapt policies to their circumstances and implement workable solutions.

In the international arena, it was five years ago that the Solemn Declaration of the Third OPEC Summit emphasized the global priority of eradicating energy poverty. Following this “Riyadh Declaration”, the “Energy for the Poor Initiative” was launched in Jeddah in June 2008. This Initiative was supported by G8 Energy Ministers in May 2009 and G20 leaders at the Pittsburgh Summit in September 2009: also Energy Ministers meeting for the 12^th International Energy Forum in Cancun in March 2010 stated that reducing energy poverty should be added as the Ninth Millennium Development Goal.

This groundswell of support culminated in the designation of 2012 by the United Nations General Assembly as the “International Year of Sustainable Energy for All”. In response, the UN Secretary-General launched a global initiative, “Sustainable Energy for All” which has the provision of universal access to modern energy services as the first of its objectives. Moreover, in November 2011 the UN Secretary-General designated a High Level Group to create an Action Agenda. OFID was nominated to this High Level Group in recognition of our commitment to the eradication of energy poverty since inception and in particular since 2007. The Action Agenda prepared by the High Level Group was formally presented to the Rio+20 Conference in June earlier this year.

High level support for action against energy poverty is vital to mobilise political will – not least within those countries suffering from energy poverty. Energy investment is very capital intensive. The projects carry substantial technical and commercial risks. Economic pricing may require levels of tariffs which create political difficulties. For these reasons improved energy access has not been a top priority for governments, especially in the poorest countries. Authorities need encouragement and assistance to improve governance of contracts and procurement, reform the finances of existing utilities and work towards macroeconomic, regulatory and political stability in order to attract international partners.

There are developing countries which have made dramatic progress. Thanks to appropriate reforms and targeted electrification programmes China, India, Vietnam and Brazil do have success stories to tell. These countries have improved the access for their citizens substantially in the last two decades – largely as a result of long term plans implemented at the cost of the public sector. Poorer countries can learn from these pioneers but external help will be needed to devise energy plans, to translate plans into specific projects for generation, transmission and distribution and to negotiate long term investment funding. Most important will be to create the ‘soft infrastructure’ of management and governance and develop the human resources sufficient to undertake a task of this complexity.

Political will must be combined with resources to achieve results on the ground. According to the IEA, investment of USD 49 billion per year is needed to provide the most basic level of energy access to all by 2030. This represents more than five times the current level of spending directed towards improving energy access. The amounts are substantial but the ongoing crisis in global finance has taught us a lesson: whenever an important issue is given high priority and the international community can devise a consensual and resolute solution – the money can be found. Energy poverty alleviation also needs and deserves collective international solutions.

Sustained progress to eradicate energy poverty will require action on many fronts. This is well illustrated by the activities of OFID which include longstanding efforts to raise the profile of energy poverty in parallel with substantial and growing financial support for partner countries. For many years OFID has urged the international community to attach a higher priority to the struggle against energy poverty whilst simultaneously raising the proportion of energy projects in total OFID operations. Indeed, since the Riyadh Declaration of 2007, OFID has approved more than USD 1.37 billion in loans for 58 energy projects and operations in 34 countries. In 2011 and 2012, the share of energy projects in total operations has reached 28%.

In all our work OFID emphasizes ownership of operations by the development partner. Conditionality is limited to ensuring good project and corporate stewardship. As part of this commitment to partner ownership of development projects, OFID is technology neutral and has financed many renewable solutions where endowments and geography permit. To leverage its financial assistance, OFID cooperates with the Coordination Group of Arab National and Regional institutions and also with international institutions including the World Bank, the African Development Bank, BADEA and IFAD. This cooperation permits the building of synergies and reduces the risk that partner countries have to deal with a large number of donors giving relatively small amounts of money – so-called ‘aid fragmentation’.

As the year draws to a close it is clear that 2012 has seen some progress. The Rio+20 Conference in June 2012 committed attending Heads of State and Governments to ‘promoting sustainable modern energy services for all through national and subnational efforts, inter alia, on electrification and dissemination of sustainable cooking and heating solutions’. But such commitments will not, of themselves, bring power to a single additional village. On the ground it is vital that financial institutions continue to work with partner countries to design, finance and implement bankable energy projects despite the worsening economic environment and the increasing caution of commercial lenders.

In these uncertain times the value of a reliable development partner such as OFID is evident. In June 2012 the OFID Ministerial Council issued a “Ministerial Declaration on Energy Poverty” which committed a minimum of USD 1 billion to finance the “Energy for the Poor Initiative” and stands ready to scale up the commitment if demand warrants. This Ministerial Declaration was announced at the Rio+20 Conference on the instruction of Ministers. Going forward, OFID is ready to work with other bilateral and multilateral development institutions, also the UN and regional organizations, to best take advantage of our diverse capabilities. Those hundreds of millions of people still suffering from energy poverty deserve nothing less.

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Countries are becoming increasingly inter-dependent in energy matters; producers and consumers share many things in common. The main energy challenges facing the industry remain the same; the need for sustained levels of investment throughout the energy chain, the challenge of addressing persistent volatility in energy markets, reducing energy poverty in the developing world, and the challenge of mitigating climate change.

Since the IEF Charter was signed, the political upheaval in some parts of the Middle East and North Africa region, the Fukushima tragedy in Japan and more recently the geopolitical tensions in the Gulf and the eurozone debt crisis have added to energy market and price volatility.

Energy prices, and more specifically oil prices, are key inputs of public and private investment decisions and the lack of predictability may adversely affect economic growth. IEF efforts to enhance understanding regarding the root cause of high volatility and to improve market functioning are commendable.

Though prices may need to moderate from recent levels, one must recognise that future prices will have to be sufficiently strong to attract large capital investments into high-cost producing areas such as Canadian oil sands and shale. Hence, prices need to be set at a level sufficiently high to support ongoing development of conventional and unconventional energy sources as well as encouraging continued improvement in energy efficiency.

Energy security is a complex and broad-based issue which is fundamentally linked to the world’s prosperity and welfare. The global energy dialogue – under the umbrella of the IEF – is the optimal manner to foster mutual trust among producers and consumers and to bring transparency to the oil markets, thereby ensuring global energy security.

The IEF Charter marks a new era of international energy cooperation, signaling reinforced political commitment to an informal, open and ongoing dialogue within the neutral framework of the IEF. We do value the IEF, as a global forum to tackle issues of common interest to all parties involved in energy.

Throughout the recent economic crisis, international co-ordination and collaborative dialogue between energy producers and consumers contributed to the early recovery of the world economy. The emphasis should be on ensuring reliable and secure supplies of energy at reasonable prices.

Effective and continuous engagement between producers and consumers can assist in facilitating transparent frameworks of investment, promoting diversity, efficiency and flexibility within the energy sector, as well as reducing market volatility, improving emergency preparedness and oil data sharing for better understanding of market price behaviour and undertaking appropriate regulatory responses.

Kuwait is an active and responsible producer in the world and is fully committed towards the development of its crude oil production capacity. Kuwait’s total oil production has reached 3 million barrels per day (mb/d), in the second half of 2011.

Hence, Kuwait is pursuing its plans to achieve sustainable crude oil capacity of 3.5 mb/d by 2015, and then 4 mb/d by 2020 onwards. Furthermore, KPC has initiated an expansion plan encompassing both the upstream and the downstream, which include plans to upgrade Kuwait’s production, export infrastructure and its tanker fleet, as well as expanding exploration and building downstream facilities, both domestically and abroad.

Moreover, Kuwait needs to acquire leading know-how and technology to ensure that production targets are achieved to promote better Kuwaiti competencies. In implementing these plans, the technical assistance of international oil companies will be needed in the field of enhanced oil recovery, and to develop heavy crude oil in Kuwait.

Kuwait is also seeking to cultivate downstream interests in markets with high potential demand growth, the Asian market in particular, specifically China and Vietnam. Despite being a major oil exporter, Kuwait has recently become a net importer of natural gas, leading the country to focus more on natural gas exploration and development for domestic consumption.

Kuwait increasingly requires supplies of natural gas for the generation of electricity, water desalination, and petrochemicals, as well as for enhanced oil recovery (EOR) to boost oil production.

We believe that producer-consumer energy dialogue is needed to enhance the understanding of the energy markets, the linkages with financial markets and the uncertainties of global energy policy.

In this regard, the IEF efforts and activities have been fruitful. The joint projects and the various workshops on market outlooks as well as the regulatory tasks have provided more insight and closer understanding of the various factors affecting the energy industry and markets.

The Secretariat, in co-operation with the IEA and OPEC, has acted as a platform to help improve understanding of the linkages between physical and financial markets, working with the IEA and OPEC within the context of the trilateral cooperation initiative announced in the Cancun Declaration and with other parties as appropriate. The first joint IEA/IEF/OPEC Workshop on physical and financial markets linkage was held on 22 November 2010 in London, with participation from governments, industry, banks, regulators, multilateral institutions and academia.

However, the producer-consumer dialogue should set a precise, comprehensive and action-oriented agenda for the IEF. Enhancing the energy cooperation between producing and consuming countries will result in securing greater diversity, competitiveness and transparency in all aspects of the supply chain. This partnership is the key element for keeping the supply-demand balance on a clear and sustainable path.

Accurate energy data is essential for making appropriate investment and policy decisions. Reflecting the strong interest expressed by ministers, continuous measures to extend JODI to other sources of energy are important for understanding the world energy mix. We support the Secretariat’s implementation in co-operation with JODI partners for the extension of JODI to natural gas.

We are proud of the achievements that have been reached so far under the umbrella of the IEF. Recognising the increasing importance of the role of natural gas in the world energy mix and the need for a global and sustained dialogue between the natural gas stakeholders, the IEF has established in cooperation with the International Gas Union (IGU), an IEF-IGU Ministerial Gas Forum for selected Ministers and leaders from the gas industry.

The 1st IEF NOC-IOC Forum, in Kuwait in March 2009, was recognised by industry leaders as an important step forward in promoting global energy dialogue and enhancing global energy security. Highlighting successful examples of long-term cooperation between NOCs and IOCs, participants underlined that regular contacts between NOC and IOC leaders provide a useful platform for industry to discuss the changing business environment and its impact on stakeholder relationships.

Recognising the importance of innovation and technology in addressing future energy and climate needs, as an oil producer, we support international cooperation in energy technologies. IEF and the Global CCS Institute jointly organised a series of symposia on carbon capture and storage in response to a call-for-action from member nation ministers. Furthermore, we believe that producers and consumers must dedicate more resources to investigate the most effective means to alleviate energy poverty and review the role of different stakeholders and support IEF efforts in this respect.

As globalisation continues, trade will expand, and technological advancements will drive productivity gains even as the world’s population grows. Fossil fuels will continue to play a dominant role in the world’s energy mix, and will remain the principal energy source in the next 50 years or more.

Underinvestment or delays in investment could lead to shortfalls in the incremental capacity required to meet demand. The IEF conference in Kuwait is a further step in producers’ and consumers’ cooperation to create the right environment for continued investments in energy and in paving the way towards market stability and energy security.

IEF countries must dedicate much of their efforts, in such important forums as the 13^th IEF ministerial meeting, to align interests for the achievement of more efficient and clean consumption of fossil fuels, developing other sources of energy efficiently as well as making the markets more transparent without undermining the goals of economic growth and prosperity.

IEF13 will certainly be a crucial step to move forward towards becoming a more result-oriented forum – through collaboration with relevant multilateral organisations and research institutions, hiring highly-qualified staff, conducting credible analysis and providing reliable and timely data to achieve greater energy market transparency and stability.

In addition, the Joint Organisations Data Initiative should be expanded to other fuels in the energy mix, as well as capacity expansion plans (upstream and downstream), and should be promoted in different media outlets.

We hope that IEF13 in the State of Kuwait will bring together different viewpoints and decision makers among producers and consumers towards better understanding of the functioning of oil markets and the relationships between the physical and financial energy markets. In addition, enhancing visibility on future energy outlooks should assist in the maintenance of investment as well as the stability of energy markets.

Furthermore, mitigating energy market volatility and uncertainty remains of crucial importance to energy market stability and energy investment, which will contribute to the smooth recovery of the world economy.

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From the very beginning the Dutch government has strongly supported producer-consumer dialogue in the International Energy Forum. The Netherlands has actively participated in various IEF organs and by hosting the IEF Ministerial in 2004. The main reason for this support for the dialogue has not changed over the years. Since our country is a large gas producer within Europe and has a major petrochemical industry as well, energy is an important factor in the Dutch economy. Consequently, energy policy has played an important role in government policy. Cooperation in the producer-consumer dialogue helps stabilise energy markets which is in the interest of producers and consumers alike and vital for the global economy and people’s welfare.

Over the years we have seen a number of recurring themes. To my mind investments and volatility are the most important and most frequently recurring issues, and I would like to focus on them here. Let me start with investments.

In 2003 the International Energy Agency’s annual World Energy Outlook focused on investments. The reason was that in its projections the pace of new investments was lagging behind what was deemed necessary for supply to meet the growing demand. In response to similar concerns we subsequently chose investments as the overarching theme of the IEF Ministerial in Amsterdam in 2004. Oil and investments in the natural gas value chain were addressed, as was the need to invest in renewable energy. When we look at today’s situation, investment in energy is still is a very topical issue. It is predicted that energy demand will increase substantially, particularly in the Middle East, Asia and Latin America. Economic growth is only possible when energy supply is secured. Moreover, millions and millions of people still need to gain access to energy and, for example, be connected to electricity grids.

The recent period of rapid demand growth, in emerging economies in particular, has further challenged the pace of investment in energy production. While new and often more complex resources need to be explored and developed, they tend to be situated further away from markets. Energy companies and governments alike are tested, technologically and economically, in bringing these investments about. New technologies have to be developed in order to be able to produce more oil and gas, while at the same time reducing the environmental footprint. According to IEA’s World Energy Outlook, the total investment in energy amounts to US$38 trillion, of which about US$20 trillion should be investment in exploration and production. This is a tremendous challenge. However, while increased demand for oil and gas is challenging the pace of investment that companies and governments are able to generate, future demand uncertainties as a result of energy efficiency gains and expected fuel switching to renewables requires a critical view of various demand projections. I am therefore strongly in favour of the initiative to compare IEA and OPEC projections in order to get a clearer picture of global energy supply and demand and regional differences.

I would now like to turn to the second issue: volatility. Although every market experiences some instability, oil price volatility in particular has been very marked over the last few years. Of course, 2008 was the most remarkable year in which the oil price increased to US$147 per barrel and then collapsed to a price of less than US$40 at the end of the year. Since 2008 volatility has not been that strong, but nevertheless persists. Since volatility does not strengthen the confidence of investors, it is of the utmost importance that we try to moderate it. We greatly value the efforts of IEA, IEF and OPEC to create greater transparency and understanding of the factors that influence the price of oil. One topical issue is the connection between physical and financial markets. For many industries, financial instruments are an indispensable way of mitigating price risks. Airlines and other companies, for example, are relatively vulnerable to oil price volatility, and can use these instruments to control risks. So it is good that these types of financial hedging instruments can be used to benefit the companies mentioned and limit price movements. However, these instruments can also be used for speculation, which may distort the market balance. A good way of improving energy market performance could be to boost market transparency and ensure that producers and consumers are open about their supply and demand projections. And improving market performance is exactly what the global economy needs.

In recent years the International Energy Forum has grown in its role as neutral facilitator of the dialogue between producer and consumer countries. By stimulating discussions and cooperation with international organisations like IEA and OPEC, and relevant experts on the above mentioned issues, the IEF has contributed to a better understanding of the functioning of oil and other energy markets. Furthermore, the IEF secretariat has facilitated discussions on IOC-NOC cooperation, which is vital if we are to meet future challenges in energy.

These are important steps toward better understanding of, and greater stability within, the market. This will lay the groundwork for investment and further technological development. And, ultimately, access to energy for all.

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The 13th Ministerial meeting of the International Energy Forum is taking place in "The International Year of Sustainable Energy for All". This International Year, decided by the United Nations General Assembly, reflects a universal aspiration for access to modern, affordable and sustainable energy services for all, as well as the desire of all countries, including mine, to achieve the Millennium Development Goals.

The various forecasts for world energy demand by the year 2035, based on a “business as usual” scenario, show consensus on a considerable increase of more than 50 per cent, due to the dynamism of the non-industrialised countries and their needs in terms of development, mobility, urbanisation and the general improvement in the living standards of an increasing population.

It is also acknowledged that fossil energies will remain predominant in the total energy balance with an overall share of more than 80 per cent. Gas, as a fossil energy with low carbon content, will probably witness the highest growth rate. The global demand for liquids, which include oil, biofuels and other products, is likely to reach about 103 million barrels a day (mb/d) by the year 2030, compared to 87 mb/d in 2010.

Power generation, the main sector through which the energy mix can be widely diversified, accounts for more than 57 per cent of the growth in future demand for primary energy.

“Energy for all” should imply additional demand from the more than one billion people who live mainly in the countries of the South, and are today deprived from modern energy services. It should also mean developing all forms of energies, including renewable energies, which are available and economically viable.

Worldwide energy resources are abundant. Apart from the important resources of OPEC countries, estimates of economically viable energy reserves, notably oil and gas, are all the time revised upward, thanks to the intensification of exploration efforts and to technological progress. The North Sea, which was considered as a mature zone, has surprised us with a re-evaluation to more than 3 billion barrels of oil reserves for a single field in Norway. Similar findings should not be ruled out in other regions.

By the year 2030, supply increase will come mainly from OPEC. Additional supply from non- OPEC countries will certainly come from biofuels, tar sands, the deep offshore and shale oils.

Overall, offshore potential is important. Moreover, stimulation technology has succeeded in turning non-conventional hydrocarbons resources into a substantial share in supply, and this is expected to increase further.

However, resource availability and consequently supply should in no case curb the efforts undertaken by several countries to rein in demand through energy efficiency. This remains, according to experts who met at the recent IEF Symposium on this topic and whose opinion I share, “the quickest, the cheapest and the cleanest solution,” to contribute to meeting the challenge of future increases in demand. It is also imperative to exploit and use energy resources in a way that would ensure the preservation of the environment.

The development of the energy resources identified above requires the mobilisation of considerable investments, which can be achieved only in a favourable climate characterised by an effective and predictable long-term demand.

Algeria, one the most important African countries in terms of hydrocarbon reserves, produces the equivalent of 4 mb/d, 60 per cent of which contribute to the supply of the international market.

As a pioneer in the natural gas liquefaction industry, Algeria ranks fifth among natural gas exporters. The country has an important domestic pipeline transport network estimated at more than 18,000 km, which links production fields to processing and liquefaction units and/or loading ports. Export capacities via gas pipeline represent a total of 52 billion cubic metres a year (bcm/yr), with the first deliveries of Medgas that took place last year, and other projects such as the Galsi project which will enhance these capacities.

Another important project, the Trans-Sahara Gas Pipeline (TSGP), which would link Nigeria to the Algerian coast via Niger, would allow the supply of gas to Europe. This role will be enhanced by two liquefaction units under construction with a combined capacity of 12.5 bcm/yr, bringing the total LNG capacity to nearly 37 bcm/yr in the medium term.

The country’s economic development creates strong demand for energy, in view of the quasi-total electrification of the country and the gas penetration rate which has reached nearly 50 per cent, in addition to the increasing needs of the industrial and transport sectors. The domestic economic and social imperatives, the preservation of the role conferred on the hydrocarbon sector in ensuring a stable income to the country and its contribution to the overall effort to preserve the environment, require an adjustment of our energy policy. This implies in the first place an adaptation of our energy production policy. Indeed Algeria has 1.6 million square kilometres of largely under-explored sedimentary basins, including 100,000 square kilometres of unexplored offshore subsurface.

The Algerian subsoil bears non-conventional gas resources associated with clays and source rocks of the Silurian and the Frasnian periods that contain good organic wealth. Algeria has realised the importance of its national non-conventional gas resources and has launched several initiatives aimed at evaluating its potential, described by experts as being important. Indeed preliminary evaluation of the non-conventional gas potential show that it is at least comparable to the most important deposits of the US.

This evaluation work continues in association with companies which possess the necessary expertise and are willing to participate in this new exploration experience. The adaptation of the legal and fiscal framework to economic and technological conditions for the development of this type of reserves is ongoing.

Likewise, exploration efforts will be enhanced as part of an investment plan of about US$70 bn over the next five years which will be allocated to hydrocarbons, of which two thirds will be devoted to oil and gas upstream.

But beyond hydrocarbons, the country enjoys one the highest sunshine irradiation rates in the world, estimated at about 2,700 kWh/m2/year. It has therefore decided to exploit this potential and an ambitious programme was adopted in this direction by the government for the introduction of renewable energies and particularly solar. The aim is to install power production capacity based on renewable energies of 22,000 MW between 2011 and 2030, including 12,000 MW for the supply of the domestic market and 10,000 MW for export.

Once this programme is completed, 40 per cent of electricity will be generated from renewable energies. The first hybrid solar/gas power station, with a capacity of 150 MW, was commissioned in 2011 in Hassi R’mel.

Concurrently with this programme, energy efficiency is also to contribute to reining in consumption growth of exhaustible hydrocarbon resources with the reduction of the harmful effects on the environment. A series of measures and actions, which have been already initiated or under implementation, will translate into significant energy savings.

I would like to point out that all the ongoing actions, planned or under study, which are designed in the first place to enhance the national energy base to meet the country’s needs, constitute also a contribution by Algeria to securing the supply of the world economy.

However, it seems important to me here to underline that energy security implies also securing future demand with an adequate return on investments. The need for a favourable environment for the realisation of the necessary huge investments requires also market stability with rewarding price levels in the interest of all.

Today, dialogue between producers and consumers is therefore more necessary than ever to increase energy market transparency and stability. The various players must coordinate their efforts to reduce price volatility, particularly by enhancing energy data transparency and reliability and providing the necessary conditions likely to encourage investments.

Algeria, which is celebrating the 50th anniversary of its independence this year, has embarked on a new phase of adaptation of its energy policy based on clear objectives, while taking into account the development of the international energy environment. It will pursue its economic and social development programme, while maintaining its historic role as a reliable energy supplier.

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The world's precious natural resources are key to human progress. They contribute towards alleviating poverty, stimulating economic growth and creating opportunities for people around the world to improve their lives.

Energy issues will, therefore, always form a fundamental aspect of geopolitical relations. This is why the aims and objectives of the International Energy Forum remain as important today as they did when the organisation was first conceived more than 20 years ago.

The 88 country members, accounting for around 90 per cent of global oil and gas supply and demand, is testament to this – but let us be under no illusions. It is easy to meet and to speak; it is much more challenging to meet the fundamental aims and objectives of the IEF, without continuous collaboration. It may be worth reminding ourselves as we meet here in Kuwait, about some of these goals.

A central IEF ambition is to foster greater mutual understanding and awareness of common energy interests among members, through the sharing of information, the exchange of views and the acceptance and promotion of clear principles.

It is clear that hydrocarbons will continue to be the major source fuelling the world’s economy for many decades, with petroleum accounting for much of that energy. Stability and predictability in oil markets helps.

It is indisputable that energy interests are shared interests, and that in our interconnected world, all countries can be impacted by events in other parts of the world.

The 24-hour news media has a role to play, but it is incumbent on leaders, and on nations, to understand situations for themselves and to act in an appropriate, and measured, fashion. The IEF has an important role to play when it comes to engendering better understanding.

Another stated aim of the IEF is to promote a better grasp of the benefits of stable and transparent energy markets for the health of the world economy, the security of energy supply and demand, and the expansion of global trade and investment in energy resources and technology.

For its part, Saudi Arabia’s position in the world oil market is based on its commitment to maintaining spare capacity for the sake of market stability. The Kingdom’s policy in this regard is clear and has been consistent: moderation in all decisions that concern the global petroleum market.

Improving the lives of citizens should be a fundamental priority for all nations and it is clear that increased trade and investment, and stable energy markets, contribute towards that goal. The IEF can, and does, play an important role, but it is just as clear that more effort and work is required.

The IEF also aims to identify and promote principles and guidelines that enhance energy market transparency, stability and sustainability. Reliable and transparent information is vital in reducing volatility in oil markets. It is the IEF’s mission to encourage all members to provide such information in order to improve understanding and reduce instability.

The Joint Organisations Data Initiative (JODI) aims to help achieve a degree of market stability by providing timely, accurate and transparent oil market data. That the initiative has started is a positive, but it clearly has some way to go before we can be satisfied that the collection and dissemination of sound data is being done in a timely manner. Some countries struggle to meet the demands of JODI, but it is important that they work towards doing so to ensure the future success of the initiative.

Of course, no system will ever be perfect; it is a vast and dynamic industry, and there are so many competing interests, but more can be done. The IEF, and JODI, presents an opportunity for increasing the dialogue and enhancing the transparency.

One ultimate purpose of the JODI initiative is to reduce instability in markets. Price volatility is in no- one’s interest, apart, perhaps, from the speculators, who make their money whether markets rise or fall. But as the recent financial crisis reminds us yet again, it was the lack of openness and transparency which helped create, and indeed exacerbate the problems, and this is something we are striving to avoid in the energy sector.

The organisation seeks to narrow the differences among energy producing, consuming and transit member states on global energy issues and promote a fuller understanding of their interdependency. It is an honourable, if sometimes challenging, target and one closely linked to another IEF goal, that of building confidence and trust. This meeting in Kuwait is another opportunity to build confidence and trust.

The International Energy Forum is precisely what it says: international. It is the sum of its parts, not steered or controlled by one country or group of interests. In that sense, the IEF is unique in the world of energy and energy policy. The IEF’s mission is in the interest of all governments, countries and people. Openness, trust, stability and understanding - these are the ultimate aims to which Saudi Arabia is committed.

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The United States is delighted to participate in the 13th IEF Ministerial. We thank our Kuwaiti hosts for their hospitality and the IEF Secretariat, under the very able leadership of Aldo Flores Quiroga, for all the hard preparatory work that enables us to gather together.

As both a significant energy consumer and a leading energy producer, the United States values the dialogue that is the International Energy Forum’s core reason for being. The IEF provides the venue through which nations of diverse interests and points of view talk about some of the most critical energy issues of our day. The United States appreciates the commitment of the IEF’s participants to enhancing transparency and dialogue for the benefit of all nations.

Oil and gas resources are, and will continue to be, important to America and to the world. The United States is committed to promoting open and stable rules of the road and to ensuring that energy markets operate efficiently. Stable and transparent energy markets are important to the health of the world economy, the security of energy supply and demand, and the expansion of global trade and investment in energy resources and technology.

The IEF, which now involves nearly 90 countries, provides an excellent venue – not only for structured, formal discussion of top priority issues, but also for informal dialogue among producers and consumers. These conversations allow us to identify and advance shared interests and to gain greater understanding of our differences. Common interests include enhancing oil market transparency, reducing oil market volatility (including through improved reporting under the Joint Organisations Data Initiative), and encouraging investment across the energy value chain.

We believe that, by strengthening the informal energy producer-consumer dialogue and hearing from international and national oil companies, the Forum can fill an important niche in our global energy arena.

The discussion fostered by the IEF, and the data that it publishes in coordination with its JODI partners, can increase transparency and the flow of vital information in the oil market. Given today’s global economic and geopolitical risks, this is more important than ever. Markets are best able to balance past trends with future needs through transparent dialogue. Reduced uncertainty means reduced risk for everyone in the value chain -- which helps the market avoid volatile trading patterns. Investors and upstream developers can project demand most effectively and make informed judgments about the profitability of future exploration and production. Infrastructure and transportation systems can be sized and located properly to link production and consumption requirements. And end-users can make sound judgments about which fuels to use, from whom to procure them, and how much those fuels will cost in the period ahead.

The United States recognises the continuing importance of safe, responsible oil production to America and to the world. The United States is producing more oil today than at any time in the last eight years, thanks to the application of new technology that allows the development of tight oil deposits. In 2010, the United States imported less than 50 per cent of its oil requirements for the first time in more than a decade.

At the same time, our citizens are grappling with high fuel prices, which bite particularly hard in this time of fragile economic recovery. Every family and every business bears this burden. That is one reason why the United States has proposed landmark vehicle fuel efficiency standards so that our cars will average nearly 55 miles per gallon by the middle of the next decade. While there are no short-term "silver bullets" to bring down excessive gasoline prices, the United States will continue to take every possible step to enhance energy security and to protect consumers against rising gas prices in the long term.

To that end, President Obama is committed to an all-of-the-above strategy that expands production of American energy resources, including oil and natural gas; increases energy efficiency to save families and businesses money at the pump and in buildings nationwide; and develops cleaner, alternative fuels to reduce our dependence on oil. Additionally, the United States is working in areas such as permitting, easing delivery bottlenecks, and assuring transparency so all consumers and traders can better understand what’s going on in the oil markets. We know that many of our fellow members of the IEF share the same concerns for their energy consumers.

The United States supports the IEF’s ability to enhance available data on oil production and consumption. The United States is pleased to be a part of the Joint Organisations Data Initiative (JODI), which involves reporting of major oil production and consumption data by more than 90 countries through six international agencies. JODI Oil is intended to provide an accurate, timely and comprehensive database on oil market data and can promote greater transparency in international oil markets. We support recent JODI initiatives to create similar natural gas and energy investment databases.

The latest assessment of JODI Oil shows continued improvement. Transparency can be improved further as JODI expands its oil and natural gas coverage and increases training to assure optimal data collection and sharing.

The United States supports the IEF’s work to convene market analysts from different organisations to compare respective energy market outlooks, and we are grateful for the inclusion of the US Energy Information Administration. As we learned from consumer and producer dialogue and actions following the Libya disruption last spring, market outlooks help inform producer-consumer discussions and help improve the formation of energy policies. In the United States, the Energy Information Administration produces monthly and annual outlooks for energy markets precisely because we think outlooks help make energy markets more transparent, improve the dialogue, and provide a framework for understanding actual market data as it is gathered.

The IEF plays a critical role at a critical time. Markets are tight and prices are high. While increases in oil price volatility have caused concern over investment returns and capital expenditure deferrals, significant investment is still needed to compensate for declines in oil and gas production in existing fields and to meet growing demand. Improved cooperation between national and international oil companies could assure technology advances optimise resource development – particularly in the current, volatile market environment.

The United States supports the efforts of IEF’s Business Forum to enhance these important partnerships and to inform governments on actions they can take to foster constructive alliances between national oil companies (NOCs) and international oil companies (IOCs).

From our own engagement with oil company leaders, including through the National Petroleum Council (NPC), we know that key challenges include reducing costs, improving efficiency and increasing output. To address these issues, joint technological development among NOCs, IOCs, service companies, universities and research institutes and maintaining R&D funding are needed. As appropriate, the Forum can encourage greater cooperation between international and national oil companies on advanced technology and techniques.

In conclusion, the United States supports an IEF that provides a neutral arena for producers and consumers to discuss areas of mutual concern. The IEF is most useful when promoting a common understanding of energy market transparency, stability, and sustainability. We are grateful for the leadership of the Kingdom of Saudi Arabia, which not only catalysed the formation of the IEF, but also serves as the IEF Secretariat’s home.

Together we can build confidence and trust through improved information sharing among Members. The Forum can help reconcile competing views and positions on the global oil market, and promote responsiveness to members’ concerns. The United States supports that vision and looks forward to working with all members committed to realising the vision of a stable, secure, and transparent oil market.

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The UK is a very strong supporter of the International Energy Forum. We believe it has a crucial role to play in delivering the stable energy markets necessary for the future wellbeing of both producer and consumer countries. I welcome the work done over recent years to ensure the continuing critical relevance of the IEF and I am grateful for this opportunity to set out my views on the challenges facing us, what the IEF has already achieved, and where we might look to achieve more in the future.

Challenges

Secure and affordable oil and gas supplies are vital for the world economy and, even as we act to reduce greenhouse gas emissions, will continue to be so for decades to come. Maintaining these supplies requires well functioning global energy markets that provide the signals about future supply and demand necessary to support long term investment decisions in production infrastructure. To create such markets we need strong producer-consumer dialogue and accurate market data.

The last year has been an eventful one, with events in Libya and the consequences of the tragic Japanese earthquake having significant implications for energy markets, helping drive the price of oil above US$100 a barrel early in 2011 and maintaining it at that level since. This is despite the subdued state of the global economy and good cooperation between consumers and producers to ensure that energy markets have remained properly supplied.

Although the impact of recent events has been mitigated to some extent, with, for example, rapidly-returning Libyan production, a great deal of uncertainty remains over both supply and demand.

The IEF will therefore have an ever more important role to play in improving transparency in the market, and facilitating the effective producer consumer dialogue necessary to deliver the stable markets required by both producer and consumer countries.

Achievements Of The IEF

I very much welcome the progress that has been made in the Forum’s various work streams since the last Ministerial, and look forward to the reports that are to be made when we meet in Kuwait.

While JODI is already playing a valued role, the work being done by members and partner organisations to improve the quality and range of the data is particularly constructive. The actions set out in the report made to the G20 last year and the steps taken since then to develop and publicise the website, deliver timely national contributions and provide training for national officials, as well as to promote the use of the database, are all very welcome. The planned extension of JODI to the gas and oil and gas investment plans this year will also provide invaluable information to the market.

The initiatives the Forum is undertaking in coordination with OPEC, the IEA and others, in particular the analysis of the links between physical and financial markets and the work being done to improve energy forecasting have been highly successful. I also welcome the work being done to promote the use of Carbon Capture and Storage, help tackle global energy poverty and publicise best practice in NOC-IOC cooperation. We will need to build on all this work to ensure that we capture the benefits that have been identified.

Finally I would commend the work the IEF has carried out for the G20. That the G20, Construction As Well As Extraction Continues In The North Sea and other multilateral bodies are increasingly looking to the IEF to deliver important objectives is testament to the excellent work of the Forum and Secretariat. I hope that we will be able to build on this in the future, continuing to advance IEF objectives through cooperation with international organisations.

Future For The IEF

While it will of course be important to deliver against existing workstreams, I believe the IEF should also look to other areas that will become increasingly important in years to come. I would like to highlight three areas in particular:

Firstly, investment. Changing patterns of demand and production, especially the growth in demand in Asia, the need to reduce carbon emissions and the development of new and unconventional energy sources will require huge investment in the hydrocarbons industry and energy infrastructure. Indeed the IEA estimates we need US$38 trillion of new investment in energy infrastructure by 2035. That is over twice the GDP of the EU, and an increase of over US$5 trillion on the IEA’s previous estimate of only a year ago.

The IEF needs to be prepared to be at the centre of international efforts – alongside governments, industry and financial organisations – to ensure that conditions are in place to allow this essential investment to be delivered. Transparency over expected trends in production, demand, investment and regulation will be a key factor. This underlines the importance of JODI and its continuing development.

Secondly, in addition to oil and gas, we must also consider how we can drive forward energy efficiency and low carbon technologies as part of the global future energy mix. I welcome in particular the renewable energy ambitions of many producer countries. There is enormous potential for expansion of renewable energy sources in many countries, especially those lavishly supplied with renewable energy resources such as solar or wind. As well as reducing carbon emissions, the development of renewable energy sources will release to the global market hydrocarbons that would otherwise potentially have been consumed in the domestic market.

Finally, I would like to endorse the suggestions Noé van Hulst made on the future development of the Forum in his “Last Waltz” speech to the IEF in December. I was particularly struck by his suggestion that open and frank discussion of energy issues between members could be encouraged by holding some sessions under Chatham House rules. I believe that the IEF already facilitates an exceptionally open and honest dialogue between producer and consumer countries, but we should continue to seek ways to improve and advance this.

Conclusion

Meeting the global energy demand poses many difficult questions, and it is impossible for any single country to answer them alone. International cooperation of the sort facilitated by the IEF is in all our interests, and I hope we will be able to develop our dialogue still further in the future.

I would like to thank Kuwait for their excellent work as Chair of the Executive Board over the past two years, and for hosting the 2012 Ministerial along with co-hosts Algeria and the Netherlands. As a co-host for the 2014 Ministerial the UK is greatly looking forward to working with the hosts Russia, and fellow co-host Iraq, to delivering an equally successful agenda.

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As a major energy user and supplier in the Asia-Pacific region, Australia is acutely aware that our economic prosperity, and the prosperity of all energy consumers and producers, will be greatly affected by the ability to bring on necessary investment in a timely manner. This will consequently affect our ability to overcome future global energy security challenges. In the decades ahead, the continued development of open and transparent energy trade and investment frameworks will be critical in delivering investment to achieve cleaner, reliable, adequate and competitively priced energy.

A key requirement to ensure global energy security is the delivery of appropriately sized and timed investments in energy infrastructure to meet rising future global energy demand. The 13th IEF Ministerial Meeting in Kuwait brings together the world’s largest energy producers and consumers, and provides the opportunity to discuss the continued importance of energy security.

The last decade has seen strong economic growth in non-OECD economies and a rapid increase in demand for energy – particularly oil and coal. This demand is set to continue. Growth in natural gas consumption is also expected to remain strong in both advanced and emerging economies, underpinned by improving economic conditions, a desire to diversify supply and an aspiration to reduce greenhouse gas emissions.

Investment in energy infrastructure is critical to meet rising demand, replace ageing assets and support the development and deployment of new technologies to reduce emissions and increase energy efficiency and productivity.

In its 2011 World Energy Outlook, the International Energy Agency estimates that global investment in energy supply infrastructure of US$38 trillion (2010 dollars) is required over the period 2011 to 2035. To meet our domestic energy demand, Australia will need investment of around AU$240 billion over the next two decades in our generation, distribution and transmission infrastructure. Such energy investment will be strongly influenced by the global investment environment and by the appetite of foreign investors to commit to energy projects.

Australia is currently experiencing record investment in our energy sector, including AU$175 billion in capital expenditure committed to LNG projects alone since 2007. In this context, Australia is a major beneficiary of foreign investment – especially in the energy and resources sectors – and we very much welcome foreign companies who want to invest in Australia. We are committed to open and transparent trade and investment frameworks to underpin global resources and energy markets, and Australia will continue to work with our trade and investment partners to facilitate cross-border trade and investment on a transparent basis.

All governments have an important role to play in supporting energy investment by providing an appropriate policy environment to attract the capital required to deliver necessary energy infrastructure investment. This requires confidence from the private sector with regard to policy settings that will attract necessary investment in long lived capital intensive energy projects. This also includes the need for global certainty over carbon policy.

Australia is taking action to reduce greenhouse gas emissions. From 1 July 2012 we will have a carbon price in operation that will provide an important investment signal and encourage investment in lower-emissions energy technologies.

Investment in technology is critical to reduce emissions. While the use of fossil fuels will remain central to the global energy mix for the foreseeable future, cleaner energy alternatives will increasingly assist in meeting energy demand as they become more competitive and cost effective. The Australian government is establishing the AU$10 billion Clean Energy Finance Corporation and the AU$3.2 billion Australian Renewable Energy Agency to support the commercialisation and deployment of renewable energy, energy efficiency and low-emission technologies.

Our global future energy security must also look to energy diversification and investment to increase energy efficiency and productivity. There is a wide range of policies we can explore that support and encourage investment across a spectrum of energy technologies in order to promote energy efficiency, integrate more sources of renewable energy, reduce emissions and diversify supply according to individual national circumstances.

The Australian government also recognises the importance of investment to assist industry overcome capacity constraints in the energy supply chain, and Australia is proceeding with large investments in transport infrastructure to ensure supply capacity can increase to meet demand in coming years, which will help maintain Australia’s position as a reliable supplier to our trading partners.

The coming years will offer many opportunities and pose some challenges for the energy sector. Forums such as the 13th IEF Ministerial Meeting provide an opportunity to share lessons to help overcome the challenges and allow us to grab the opportunities that exist to help maintain and increase prosperity.

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The world we live in constantly faces the necessity for solution of energy problems since energy is the main factor for stability and development of the world economy. These problems may be divided into two groups. The first group may include current problems that arise as the result of geopolitical and economic situations, which in turn leads to:

• Rapid change of global oil production and demand for energy resources; 
• Change of volumes of energy resources in the total consumption balance;
• Volatility of global prices for energy resources;
• Complication of relations between producers and consumers.

On the basis of the following considerations I would assess the situation which arises prior to the Ministerial meeting to be held within the framework of the 13th International Energy Forum as complicated enough.

First, attempts to eliminate global economic and financial crises have turned out to be unsuccessful so far. Economic conditions in certain countries of the European Union negatively impact on the global economy. This causes instability in the financial markets and volatility in the rate of major currencies.

Second, developments in political events in various regions of the world, especially in North Africa and the Middle East which influence volumes of global oil production and market prices, also creates serious concern.

Third, the tragic events at the Fukushima nuclear power plant have negatively influenced public opinion about the use of nuclear energy.

The second group of energy problems is more global, critical and important for mankind. It is inevitable that there will have to be a reduction in hydrocarbon use in the foreseeable future, especially oil; growth of energy efficiency and the necessity to save on hydrocarbons; development of effective alternative energy sources; reduction of emissions of CO₂ and other hazardous products into atmosphere.

Given the development of the global economy, there will be steady growth of demand for energy resources, especially hydrocarbons. This will certainly require implementation of big investment energy projects as well as establishment of a rational balance between oil production volumes and prices at the global market. Therefore, it is necessary to reach consensus between producers and consumers of energy resources on the basis of fair and transparent relations.

The policy of unreasonably high prices for oil will only restrain development of global economy and lead developed countries to increase prices for industrial products, the latest technologies, high efficiency equipment, and to implement programmes to save energy, to develop alternative energy and to reduce dependence on import of oil and oil products. This will bring a reduction of oil demand, investments and decline of oil production. Therefore, it is very important for producers and consumers of energy resources to ensure predictability and reliability in supply and consumption.

In this respect, I would stress that lessons we learned from the global crisis should be thoroughly analysed, since there are certain questions that remained without unambiguous answer. Thus, the main task of the ministerial meeting and the whole International Energy Forum is to discuss and share opinions about the current condition and problems of development of the fuel-energy complex and minimisation of possible risks in future.

Over US$45 billion was invested into the oil industry in our country during 1994-2010. The size of investments will double in coming years. Azerbaijan increased annual oil and gas production up to 50 million tons and 26 billion cubic metres (bcm), respectively, owing to successful implementation of upstream megaprojects such as the development of the Azeri-Chirag-Gunashli oil block, where recoverable reserves reach over 925 million tons of oil, and the Shah Deniz gas condensate field where recoverable reserves reach 1.2 trillion cubic metres of natural gas. Azerbaijan plans to stabilise oil supply at the rate of 1 million barrels per day (mb/d). Gas export is to be increased gradually up to 30-40 bcm per year.

I also would like to note the growing role of natural gas and LNG. Azerbaijan is involved in a number of mega-projects relating to the production of natural gas and its delivery to the European market. There are plans to considerably enlarge the Baku-Tbilisi-Erzurum gas pipeline, increasing its carrying capacity up to 50 bcm, as well as to lay a new Trans-Anadolu gas pipeline towards Europe through Turkey. We are also considering a project for supply of natural gas to the coast of Georgia, construction of a terminal for gas liquefaction and its sale of the liquefied gas to the Black Sea basin countries.

In my opinion, all of these measures will promote strengthening of energy security and stable economic development of countries. It is an ultimate goal of those involved in international energy policy.

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New Zealand is a small, dynamic country located at some distance from international markets, but we are confronted by the same challenges of energy security and climate change as the rest of the world.

The best means of meeting these challenges is to ensure energy markets are effective and efficient and that the cost of greenhouse gas emissions is factored in. This approach will encourage efficient energy use, the development of resources where it is economic to do so and the minimisation of environmental impacts of energy supply and use.

New Zealand has sought to apply these principles both domestically and, via its participation in various international organisations, on the world stage.

Domestic Efforts

Our domestic energy policy is articulated in the New Zealand Energy Strategy 2011-2021. The goal is for New Zealand to make the most of its energy potential through the environmentally responsible development and efficient use of the country’s diverse energy resources. The strategy focuses on four priorities to achieve this goal – diverse resource development, environmental responsibility, efficient use of energy, and secure and affordable energy.

Diverse resource development includes the development of both renewable and non-renewable energy sources. The government has a target for 90 per cent of electricity generation to be from renewable sources by 2025, providing this does not affect security of supply. In 2010, renewables contributed to 74 per cent of electricity generation.

Commercial enterprises will ultimately be best placed to identify the lowest-cost generation mix, with the government’s role limited to ensuring that there are no undue barriers to invest in generation of any type and that the environmental effects are priced in wherever possible. New Zealand’s emissions trading scheme is the primary economic motivator for generators to move to a lower-emissions future.

The government is also keen to make New Zealand a highly attractive global destination for petroleum exploration and production investment. Most of New Zealand’s territory is yet to be explored, and the potential for further development of petroleum resources is significant.

New Zealand is already seen as a stable and pro-investment environment. An important step to further attract investors is to ensure regulatory settings are world-class. We are in the process of reviewing our regulatory settings to ensure our upstream regulatory settings meet this objective.

A new approach to the allocation of petroleum exploration permits has now been implemented. The new approach is based on the regular (annual), predictable, managed tenders of exploration blocks (“block offers”), which have previously been carried out on a more ad hoc basis. This approach draws more closely on publicly available seismic information and is better suited to foster competitive work programme bids from suitable investors.

We have had some success in attracting new capable and experienced operators such as US-based Anadarko to the Canterbury and Taranaki basins, Petrobras of Brazil to the Raukumara Basin, and US-based Apache to the east coast of the North Island. In addition, operators with an existing presence in New Zealand have been expanding into new basins such as Austrian-based OMV and Shell in the Great South Basin.

The New Zealand emissions trading scheme is the primary means to reduce emissions in the energy sector, and all other sectors of the economy. The government has set a target for a 50 per cent reduction in New Zealand’s greenhouse gas emissions from 1990 levels by 2050. New Zealand is willing to commit to reducing greenhouse gas emissions by between 10 per cent and 20 per cent below 1990 levels by 2020, if there is a comprehensive global agreement and certain conditions are met.

Energy efficiency measures help reduce costs, make houses more comfortable and reduce greenhouse gas emissions. The government has invested over NZ$180 million since July 2009 in an energy efficiency programme to retrofit homes with new insulation and/or clean heating. More than 150,000 homes have benefited from the scheme so far.

Secure and affordable energy is best achieved through competitive markets. Competition in energy supply provides choice to consumers, places downward pressure on prices and incentivises efficient investment.

Where competition in energy supply is not possible due to natural monopolies, particularly electricity networks and gas pipelines, targeted regulation is applied. Elsewhere, competition between market players is encouraged and fostered, with Government retaining a general oversight role. This includes an understanding of the overall resilience of New Zealand’s networks and other infrastructure. Recent under-investment in the national electricity grid is now being addressed and Transpower, the national transmission line owner and operator, is planning and undertaking significant investment, including projects such as the upgrade of the inter-island link and a major new line into Auckland.

New Zealand is a founding member of the International Energy Agency. One of the obligations of membership is that New Zealand must hold 90 days of oil reserve supply.

International Efforts

Reducing fossil fuel subsidies is one area which offers immediate benefits in terms of mitigating energy demand, reducing carbon dioxide emissions and providing some relief for stretched public budgets.

At the Copenhagen climate summit in 2009, developed countries agreed to US$30 billion in funding during 2010-2012 to combat climate change. That same year, more than US$400 bn was spent globally on subsidies for fossil fuels, a key source of emissions contributing to global warming.

In other words, at the same time as countries were mobilising resources to address climate change, they were spending more than 10 times that amount on subsidising production and consumption of carbon. Even now, as countries are beginning to put in place mechanisms to price carbon, many are still subsidising carbon. Isn’t the polluter supposed to pay, rather than be paid?

Production subsidies, such as subsidies for coal production, inhibit innovation and the development of cleaner technologies, and they reduce incentives to produce and use fossil fuels more efficiently. This occurs amid growing global concern about energy security.

Consumption subsidies which intend to lower the price of fossil fuels are no better. For example, subsidies for transport fuels are seldom effective in assisting the people they are designed to help. The essential energy needs of vulnerable groups must be met. But there are better ways to do this than through universal fossil fuel consumption subsidies which most often benefit richer people more, because they use more fossil fuels.

Fortunately, the world is beginning to grasp the incoherence of fossil fuel subsidies. In 2009 and again in 2010, G20 and APEC leaders signalled their political commitment to reform and elimination of inefficient fossil fuel subsidies. This is important and welcome leadership from the world’s largest economies.

To support these reform initiatives, a group of non-G20 countries has emerged including Costa Rica, Denmark, Ethiopia, Finland, New Zealand, Norway, Sweden and Switzerland. Known as the Friends of Fossil Fuel Subsidy Reform, this group is encouraging G20 and APEC countries to implement their political commitments as soon as possible, and for others to follow their example. The global climate will be a clear winner. IEA research indicates that removing subsidies could reduce global carbon dioxide emissions by up to 5.8 per cent by 2035.

In addition, reducing fossil fuel subsidies would free up funding for other purposes, for example to help mitigate and adapt to the effects of climate change. According to the 2010 Report of the UN Secretary-General’s High-level Advisory Group on Climate Change Financing, redirection of the money spent on fossil fuel subsidies could potentially finance up to US$8 bn dollars a year of mitigation and adaptation activities.

There would also be good news on the energy security front. Universal phase-out of fossil fuel subsidies by 2020 would cut global primary energy demand in 2035 by 5 per cent. A cut in demand of this magnitude would help reduce the risk of future oil shocks and smooth out energy price volatility.

The reform of fossil fuel subsidies deserves to be much higher up the agendas of both climate change policy and general economic reform processes. Successful phasing-out of subsidies should start immediately, with the elimination of subsidies that are obviously inefficient and cause the most damage to state budgets and the climate. Transition measures to support subsidies phase-out may need to be implemented in parallel.

We welcome the OECD’s establishment of an inventory of support to fossil fuels in OECD countries. The OECD inventory increases transparency of the scope and range of support to fossil fuels and its publication on a regular basis will benefit international efforts to reform fossil fuel subsidies and support green growth.

As a small island nation unconnected to international energy infrastructure, New Zealand’s strategy for meeting future energy demand focuses on the balanced development of all of our resources, and ensuring that domestic energy markets operate efficiently to incentivise investment. This market-based approach extends to New Zealand’s efforts in the global context to encourage the reduction of inefficient fossil fuel subsidies that encourage greenhouse gas emissions and discourage the development of new energy resources and technologies.

Ensuring that global energy markets operate efficiently while taking account of environmental effects is, in our view, the most effective way to ensure global energy security of supply and the reduction of environmental harm.

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As energy producers and consumers meet for the 13th IEF, it is incumbent upon us all to dwell on our joint responsibility to protect the future of our planet for coming generations. We need to lay the foundations for the economic and social development of our respective countries, without destroying our planet in the process. Our children need employment and security, but in an enjoyable world in a safe environment.

However, it is clear that sustainability and environmentally friendly development have to go hand in hand. Climate change is an undeniable fact and we all have a role to play in mitigating its effects. For its part, the UAE has not shirked this responsibility; in recent years it has announced a wide range of climate-friendly initiatives.

The exceptionally fast pace of our economic development over the last few years has given the UAE a unique perspective as we have become both major energy producers and growing energy consumers. Our national annual peak demand for electricity is set to more than double by 2020 and we have an increasing demand for other forms of energy.

Our growing population and fast-moving industrial development have forced us to choose between whether we want to continue burning fossil fuels, or find complementary energy solutions for use at home. We realised that by widening our domestic fuel mix, we could release more hydrocarbons for export, while reducing our carbon footprint at the same time.

Two years ago, we took a major step in complementing our traditional energy portfolio when the Emirates Nuclear Energy Corporation awarded a major contract for the construction of four new 1,400 megawatt nuclear power stations. The UAE firmly believes that nuclear power represents an important clean energy source that should be developed, along with other clean fuels. We have been able to embark on an important civilian nuclear energy programme in close collaboration with the International Atomic Energy Agency in Vienna. The nuclear plants have been designed in accordance with the latest cutting-edge technology and safety was given paramount importance in the design as well in all other operational issues, including the safe storage of radioactive waste. The first plant will be commissioned in 2017 and the objective is for nuclear energy to eventually account for 25 per cent of the UAE’s power requirements.

We believe that the best way of securing a sustainable economic future in a carbon-constrained world is to develop a balanced portfolio of clean energy sources in which nuclear, renewable energy, oil and natural gas all have a role to play. The UAE’s geographic location enables us to utilise renewable energies, particularly solar energy, to the maximum, and the emirate of Abu Dhabi has recently set a target of generating 7 per cent of its energy needs from renewable sources.

Already, Masdar Power is developing the 100MW Shams One Concentrated Solar Power plant in the Western Region of Abu Dhabi, which when complete, will be the largest such unit in the world. Masdar is also developing a 30MW wind farm and a Photovoltaic array on Sir Bani Yas Island.

In addition to measures to improve its energy mix at home, the UAE is seeking to promote a sustainable future in the world as a whole.

Masdar is at the heart of a multi-billion dollar initiative to create a global cooperative platform for open engagement in the search for solutions to some of mankind’s most pressing energy and development problems. Masdar’s research arm, the Masdar Institute, has teamed up with the Massachusetts Institute of Technology to launch a range of research programmes focused on the development of advanced alternative energy, environmental technologies and sustainability.

Masdar is building in Abu Dhabi the world’s first low-carbon city built on sustainable principles. Among the first tenants will be the Masdar Institute, which will eventually host 600-800 Master and PhD students and 200 faculty members.

The other important tenant at Masdar City will be the International Renewable Energy Agency (IRENA), now headquartered in Abu Dhabi. By promoting renewable energy and helping develop new technologies, IRENA has the potential for making a tangible contribution to the mitigation of climate change. To date, 156 nations are either members or signatories to the IRENA convention and I would strongly encourage those countries that are not members to sign up for this important initiative.

The objective of the UAE’s energy policy is not just to reduce carbon emissions at home, but also to play a leading role in the development of innovative new technologies that can effectively contribute to substantial reduction of global warming.

The UAE seeks partners in the implementation of this vision. I invite attendees at the International Energy Forum and the International Energy Business Forum to contact my office for ways of partnering with UAE institutions. Together, we can work for a better future.

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The recent earthquakes in Japan and the resultant decision of several countries to reduce their dependence on nuclear power in the coming years and decades, means that hydrocarbon fossil fuels will continue to play a dominant role in the world's energy basket well into the fourth or fifth decade of the 21st century.

This means that the world will have to find ways and means of bringing more and more oil to the markets, for which huge investments will be required. For the required investments to materialise, we will need a conducive investment climate. Most of all, we will need to assure the producing/investing countries of the 'certainty of demand'.

The human population on the planet is inching towards the 9 billion mark by the middle of the century. With a rapid increase in the consumption of energy world-wide, particularly in the emerging economies, issues related to global energy security will acquire a renewed urgency. In this perspective, the ongoing global energy dialogue will have to be strengthened so that the burning issues before us get addressed effectively.

With the adoption of a new Charter in the Extraordinary Ministerial meeting at Riyadh on 22 February 2011, the International Energy Forum (IEF) has emerged as a more robust and dynamic vehicle for carrying on the global energy dialogue, encompassing not just the views of all the stakeholders including the producing, consuming and transit countries, but also highlighting the need to tackle issues such as energy poverty on an urgent and global basis.

It is our belief that energy security for the world can only come from inter-dependence among the producing, consuming and transit countries. In today's highly globalised world, no country can be an island unto itself. We must strive to move towards a global energy system that underlines the mutual dependency between consumers and producers, and facilitates international trade on wellaccepted market principles.

For emerging economies like India which are also net importers of oil, the stability of the international oil markets and transparency in price formation of oil are very important. Since rising fuel prices adversely affect the world economy as a whole but more so developing countries, international oil markets must not be allowed to get divorced from the fundamentals of demand and supply. With the emergence of oil as both a physical commodity and financial asset, there is an urgent need to bring in some kind of regulatory oversight of the commodity and futures markets. Oil is too important a natural resource to be left entirely unregulated in the international marketplace. Very high oil prices do not, in the long run, benefit either the producer or the consumer. In fact, they lead to 'demand destruction' and thereby reduce further investments in the oil sector.

We look to the IEF in its new avatar to focus on these and other related issues, and conduct the global energy dialogue in a manner that enhances the mutual trust among producers and consumers, brings transparency to the oil markets, and through the mantra of inter-dependence, leads to greater energy security for the world.

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On 22 February, the new IEF Charter was adopted by 86 countries. I was glad to participate in this historical moment, and I am proud that France has contributed to the elaboration of this new Charter as a member of the high-level steering group.

France strongly supports the Forum's work and as one of the initiators of producerconsumer dialogue, we are delighted to see that the enthusiasm behind the dialogue remains intact, 20 years after its creation.

Indeed, producers and consumers have a lot of things in common. Protecting the environment, preventing climate change, reducing energy poverty, as well as ensuring global energy security are key examples. We also have a shared interest in limiting erratic price movements in the energy sector, and enhancing predictability.

Energy prices, and more specifically oil prices, are key inputs of public and private investment decisions all across the economy. Therefore the lack of predictability can result in a lower economic growth. On the consumer side, oil price volatility severely impacts households, for whom diesel, gasoline or fuel oil are most of the time non-substitutable fuels, but it also undermines the competitiveness of our companies. On the producer side, public authorities and businesses need adequate visibility to base their medium- and longterm investment decisions.

France has made commodity price volatility a priority of its presidency of the G20, focusing our work on 3 priority areas, on which we hope to achieve significant progress by the Cannes summit in November: the enhancement of physical markets transparency, the reinforcement of the regulation of financial markets, and the strengthening of producer / consumer dialogue.

The IEF has been very active in the past months in investigating the current volatility of energy prices, and exploring ways to mitigate it, in line with the roadmap agreed at the Cancun ministerial meeting in March 2010. I would like to take the opportunity of this article to thank the IEF secretariat for its sustained and valuable contribution to this work.

Building on its expertise in bringing together different viewpoints, and being identified as a neutral facilitator, I am convinced that the IEF can play an essential role in the fight against excessive energy price volatility by:

1. Developing a better understanding of the functioning of oil markets, together with other international organisations like IEA or OPEC, as it did in November 2010, by organising a symposium on the link between physical and financial markets, and a workshop on regulation;

2. Improving the transparency of energy data, notably through the improvement of the timeliness, completeness and reliability of the JODI database, its extension to gas and the collection of annual data on investment programs;

3. Enhancing visibility on future energy outlooks (both short-, medium- and longterm), through the comparison of existing scenarios and forecasts, building on the work initiated at the Riyadh symposium in January 2011.

With the adoption of the IEF Charter, we now have a collective responsibility to deliver tangible results on these core issues for the stability of energy markets.

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Today we are facing the challenge to make the transition to a safer, more efficient and low-carbon economy based on a more sustainable way of life. Europe has agreed a forward-looking political agenda to achieve its core energy objectives of sustainability, competitiveness and security of supply. The situation requires placing the emphasis on reducing external dependence on energy imports through increased diversification of energy sources, including domestic ones, and energy routes, as well as energy efficiency and savings and promotion of the use of renewable energy.

The Republic of Bulgaria is an important transit route between Europe, Asia and the Middle East as well as a key energy player, a reliable partner and participant in a number of very important energy projects.

Bulgaria has already acknowledged and will continue to support the message of the World Energy Council 'to keep all options open' and the right of every country to develop production based on various energy sources such as coal, nuclear power, oil and gas, hydro resources, bio-resources and other renewable energy sources, while strictly observing the requirements set by the environmental standards in force. In our view, diversification of energy routes and sources is an important factor amongst others to improve energy security in our country and in the region.

Bulgaria is a small country with limited energy sources. For all that we are strongly committed to guarantee the national and regional energy security by improvement of the energy efficiency, promotion of renewables, best use of indigenous energy resources, building a reliable energy infrastructure.

It is now an acknowledged fact that energy security cannot be achieved without the presence of a real energy market. Only transparent energy markets and predictable regulatory framework can ensure affordable and reliable energy to consumers and favourable investment environments.

I would also like to emphasise that Bulgaria intends to develop its capacity as an active participant in the implementation of strategic oil and natural gas transit projects from the South East European region, the Black Sea, the Mediterranean, the Caspian region and the Middle East. It is necessary to identify alternative sources of energy in order to prevent high prices that would be an unacceptable burden to our national economies.

These measures will result in improved welfare of our citizens, increasing the competitiveness of the economy, increasing jobs and at the same time - reducing consumption of energy and natural resources with minimal negative impact on the environment and climate change.

I do believe that only the shared responsibility can help us to find the response to the challenges we are facing today. Countries are becoming increasingly interdependent in energy matters. The increasing demand for energy resources will necessitate new projects offering diverse energy suppliers, sources and supply routes for delivery of energy resources. Energy interdependence is influencing development, trade and competitiveness, international relations and global cooperation on climate. Enhancing the energy cooperation between producing, consuming and transit countries will result in securing greater diversity, competitiveness and transparency in all aspects of the supply chain, boost system integrity, economic development and energy security. This partnership is the key element for securing a supply - demand balance under clear and sustainable transit rules.

In conclusion, I would like to point out that being an EU member-state Bulgaria will actively contribute to the implementation of the European energy development, energy security and climate change strategy. We will seek and rely as much as possible on understanding and cooperation in the global context.

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In my view, the signing of the Charter in the Extraordinary Ministerial Meeting of the International Energy Forum has firmly established the importance of a better mutual understanding and acknowledgment of the common energy interests between producing and consuming countries.

It is of the greatest importance for our countries to support such a meeting place for producers and importers of hydrocarbons, because it enables the exchange of views, including with transit countries.

Since fossil fuels will remain the principal energy source in the next 40 years or more, we must dedicate ourselves to achieving a more efficient consumption of these fossil fuels and to make the markets more transparent.

We must a achieve this objective, as well as a diversification of our energy sources, including hydropower, nuclear energy and renewables, in support of our earnest efforts to contribute to the mitigation of climate change and to reduce greenhouse gas emissions.

Therefore, it follows that it is of vital importance that the member countries of the International Energy Forum will identify and promote principles and guidelines that improve the transparency, stability and sustainability of the energy market.

Argentina notes with satisfaction that the International Energy Forum is a useful and productive vehicle, stimulating the energy dialogue between the major producing and consuming countries and diminishing the tensions currently affecting the oil and gas markets. The tensions that have recently arisen in some countries in the Middle East, North Africa and Central Asia are to a large extent not the result of physical problems or costs, but rather of financial speculation or geopolitical circumstance.

In addition, we underline the importance that the International Energy Forum will have as a consultative body for the Energy Experts Group of the G20.

We want the G20 to be the Multilateral Forum for tackling the principal problems of the world in the coming years. Energy questions will not be an exception, hence the Energy Experts Group of the G20 has 4 working groups:

1. Volatility of fossil fuel prices
2. Fossil fuel subsidies
3. Initiative for Global Maritime Protection
4. Clean energy

The International Energy Forum will provide a consultative mechanism for the G20 in relation to the topics of volatility of the price of fossil fuels and fossil fuel subsidies.

Therefore Argentina highly values the initiative of the International Energy Forum for its neutral positioning as a forum where numerous countries come together from different continents and with distinctive views on the political, economic and energy reality.

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On 30 May 2011 UK Minister of State, Lord Howell, who holds the international energy portfolio at the UK's Foreign Office, visited the IEF headquarters and delivered a speech on "Global Energy Challenges: Now and in the Future". Lord Howell was accompanied by Lord Marland, Minister at the Department for Energy and Climate Change.

Lord Howell's speech touched on the many technical, economic and geopolitical challenges that affect us all on a daily basis, but placed particular emphasis on the UK's commitment to tackling oil price volatility through international co-operation. He noted the importance of providing consistent evidence-based messages to global oil markets and in this context he highlighted the key role played by the IEF and its partners in the Joint Organisations Data Initiative. "I have no doubt that consumers, both in developed and developing countries and producers will benefit from the IEA, OPEC and IEF initiatives to share their analysis, and from the continuing improvements and refinements to data sharing mechanisms, such as the Joint Organisations Data Initiative."

Lord Howell concluded his presentation by saying that "The IEF can provide the transparency and facilitate dialogue between consumer and producer states to address the challenge of oil price volatility. The Challenge of higher energy prices can be moderated by responsible investment in supply. Global energy demand can become sustainable through energy efficiency and new technology, which will also enhance economic resilience and thereby diffuse the threat posed by price rises."

In his own closing remarks, IEF Secretary General, Noé van Hulst was pleased to note Lord Howell's statement that "The IEF has demonstrated in recent years that there is a genuine value in the producer-consumer dialogue" and thanked him for the UK's unwavering support for the IEF. Highlighting the UK's commitment to strengthening the institutional framework of the producer-consumer dialogue, van Hulst commended their role as co-chair of the Forum's High Level Steering Group. The work of the group resulted in the Cancun Declaration in 2010 and culminated in the signature of the IEF Charter by 86 countries on 22 February 2011.

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As the new UK Energy Minister, I am very grateful to the IEF for giving me this opportunity to introduce my Government's priorities and direction of thinking on international energy issues.

The UK firmly supports the Forum's work. The security of oil and gas supplies is of key importance to the whole world and will remain so for the foreseeable future. Growing energy consumption will see demand for these fuels rise significantly even as we increase our use of low carbon energy sources. This makes open dialogue between oil consumers and producers essential if we are to avoid the price volatility so damaging to economic growth and to the investment needed for future oil production. We in the UK are not exempt from these concerns: access to oil and gas on the world market is a key priority for us too as declining domestic production makes us increasingly dependent on imports of these fuels.

Current global economic uncertainties make the Forum's work more important than ever and I welcome the renewed focus given to the Forum's work at Cancun earlier this year. The emphasis given to the development of the Charter and on analysing both regulation and the operation of the international oil market will allow the Forum to make a significant contribution in these areas.

More generally the new Charter will, by increasing certainty over objectives and funding, allow the Forum and its Secretariat to work and plan ahead more effectively. The proposals the Secretariat has already brought forward for the Charter provide the building blocks for a document which respects the interests of all members and which I hope we will be able to agree at the IEF Ministerial meeting in February.

JODI is already making an important contribution to the oil market, with publication of much of the detailed and timely data on production and consumption, stocks and investment needed to inform trading. I hope the initiative can soon be extended to include investment data - it is particularly important that decisions on developing production facilities can be taken in the knowledge of the likely future balance of global production capacity and demand, especially as the world comes out of recession.
Closer cooperation with other international organisations, in particular OPEC and the IEA, is important to the future development of the IEF's work. There is a wealth of information and analysis produced by each organisation, and significant potential to develop this work further by collaborating. The two joint workshops held in November, on regulation and the linkages between the physical and financial oil markets, are therefore a very welcome development. I hope the workshop on international oil markets can inform the work the G20 is also doing in this area.

Progress in all of these areas will provide Ministers with plenty of material for substantive discussions when we next meet.

I was very pleased to meet many of you when the IEF High Level Steering Group met in London in July and look forward to working with you all in the future.

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As former minister of Foreign Affairs I already had the pleasure to meet the Secretary General in Riyadh. He informed me about the IEF and the role of the secretariat in facilitating the global dialogue with producers and consumers, of which the Netherlands has always been a strong promoter.

As present minister of Economic Affairs, Agriculture and Innovation, I intend to keep on promoting the energy dialogue. Energy is of vital importance to any country in the world and to the Netherlands in particular. Energy is important in the Dutch economy, being a consumer but also a producer and a Gas Hub in North-west Europe. This explains the importance we attach to the dialogue and why the Netherlands is co-host for the IEF in 2012.

The unique selling point of the IEF is that it gathers ministers and companies to discuss and find workable solutions to problems. It has developed into a platform which brings together ministers that would otherwise not meet and discuss so easily. The informal character stimulates that they are at ease as well. Where confidence building plays a pivotal role, the process of building relations is as important as the political outcome.

Next year the producer-consumer dialogue will celebrate its 20th birthday. Quite an accomplishment for an informal forum. For me this reflects the real need for a platform on major issues regarding energy.

In my vision, those major issues are the following:

First of all of course the global market place. The issue of functioning and volatility of markets. A lot of work has been done and will be done by IEA, IEF and OPEC, separately and jointly. A key question is not only how volatility can be reduced. The question is basically how we can enhance flexibility in commodity markets that are characterised by large-scale investments as well as long lead times?

Second issue: transparency. It goes without saying that data transparency through JODI will stay a priority in the coming years. The expansion of JODI to gas is an important element. Transparent policies are important as well. Maybe we could try to discuss how we as governments are coping with issues as energy prices, environment, energy security, energy poverty, etc. And it would be helpful not to talk in general, but to refer to specific policies and best practices. It helps us all to learn from each other and to gain insight in policy developments in other countries. This will contribute to confidence.

Third issue: energy efficiency. Before mid-2009 energy markets were tight. We expect them to be tight again when the present crisis is over, unless…… unless we will be able to improve energy efficiency substantially. It will prevent the oil and gas markets will be overstretched again in a couple of years. Besides, we have to use our energy resources much more responsibly. Discussing this issue will touch upon every aspect of the energy market, including prices. So it won't be easy. But increasing efficiency has benefits in many areas. It is worthwhile discussing it in the forum, preferably in a very practical way.

To conclude: the dialogue is maturing. With the drafting of a new Charter for the IEF we are entering a new phase; a consolidation phase. Maybe the next Ministerial does not even need a 4th session on the future of the dialogue. The dialogue will continue anyway. I say after Descartes: Cogito ergo sum!

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Mexico is honored to host the 12th International Energy Forum and 4th International Energy Business Forum. We especially thank our co-hosts Germany and Kuwait, as well as the IEF Secretariat, whose help has been invaluable in organizing these events. We hope that the work conducted in Cancun will bear fruit and that it helps in setting a comprehensive platform to strengthen the global energy dialogue, in order to further our understanding of the myriad challenges confronting the energy sector.

The global financial crisis and the ensuing economic slowdown, coupled with the roller-coaster ride in oil prices that, at their height, were five times those of 2004, have created a unique set of risks for the energy sector. As a result of reduced cash flow, leading companies in the global oil and gas sector have announced cutbacks in capital spending, as well as over a hundred project delays and cancellations. According to estimates by the International Energy Agency, these decisions cut 2009 global upstream oil and gas investment budgets by 19% compared with 2008 - a reduction of $ 90 billion dollars. If prolonged, such downturn in investment threatens to constrain capacity growth in the medium term, particularly for long lead-time projects. This will eventually pose a risk of supply shortfalls. The Organisation of the Petroleum Exporting Countries has already projected that this downturn will mean that crude runs will not recover to 2007 levels until 2015. As a consequence, low refinery utilization and poor refining economics will besiege the sector for an extended period of time.

Complicating this scenario, for a large segment of the world population access to energy remains a promise yet unfulfilled, while the relationship between energy and climate change has become increasingly intricate. Currently 2.5 billion people lack access to modern fuels for cooking and heating, and given concurring estimates by leading aid agencies, under current policies that number will increase to 2.6 billion by 2020… more than one third of the world's population. Furthermore, according to the Organisation for Economic Cooperation and Development, the climate change picture remains bleak: the atmosphere contains long-lived greenhouse gases at a concentration 455 per million of carbon dioxide equivalent, which is 60% above preindustrial era levels. This number far exceeds the natural range over the last 650,000 years. Average global temperatures are currently 0.76°C higher than pre-industrial levels and continue rising.

Considering this situation, it is not surprising that the international dialogue between producing and consuming countries has been very intense in the past few years; and that it has expanded to address energy security, the dilemmas of energy poverty, and the global concern for sustainability and environmental protection. All of these subjects will be open for discussion when we meet in Cancun.

I think it is fair to say that no Minister participating in this coming Meeting can ignore the crossroads we now face, nor can any of us shirk the responsibilities we share. In order to promote coordinated confidence-building measures, we must discuss how to build a more focused producer-consumer dialogue, based on a greater degree of trust and openness. Our list of priorities is extensive: identifying the causes and consequences of price spikes, assessing the uncertainties affecting future supply and demand outlooks, unlocking the barriers holding back investment, encouraging increased cooperation and partnership among national and international companies, broadening energy access, and advancing clean technologies.

This International Energy Forum provides the occasion and structure to substantially strengthen the architecture of the global energy dialogue. Enhancing awareness of the links that need to be established between governments, international financing bodies, corporations, and assistance agencies is equally crucial. In an important sense, most people involved in the energy sector agree that we are running against the clock in terms of energy poverty and climate change, as well as with regards to the remaining avenues available to us if we are to successfully turn the tide.

Given our sector's makeup, it may be more than a little ironic to cast the challenge before in these words, but symbolically speaking we are in a struggle pitting light against darkness. The sheer scale of this mandate is monumental, and it can only be met through a broad-minded, collaborative effort across the globe. This effort must encompass each level of government, and all possible partners in the industry, financial, and aid communities, all striving together to uncover, fund, and deploy new measures to lead the way into a prosperous future.

We look forward to welcoming you in Cancun!

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As a key energy supplier in the Asia-Pacific region and net oil importer, Australia is acutely aware that our economic prosperity, and the prosperity of all consumers and producers, will be greatly affected by the way these energy security challenges are addressed. The global economic slowdown has seen some moderation in demand, but we can't afford to relax. We must, as a matter of priority, take appropriate steps to deal with these challenges. We need to do this together. An effective consumer-producer dialogue founded on a clear understanding of our mutual inter-dependence can become a driving force for cooperation to help mobilise timely and effective global action.

Efficient, transparent and competitive regional and global energy markets are central to meeting these challenges in a way that delivers cleaner, more reliable, adequate and affordable energy. Transparent markets offer the best means of attracting necessary investment at least cost, particularly in the wake of the global economic slowdown. They also create strong incentives for energy efficiency and support the timely and effective roll-out of innovative, low-carbon energy technologies.

The International Energy Forum (IEF) is already making an important contribution to promoting transparent and efficient global oil markets through the Joint Oil Data Initiative. This work is important and I encourage the IEF to continue strengthening the quality and coverage of its oil data.

Improved transparency is a good start, but more is needed. The global financial crisis must not be allowed to give rise to a retreat to protectionism. Consumer and producer governments need to work together to create the stable, predictable and effective policy, legal and regulatory frameworks needed to build resilient global energy markets that can deliver timely investment. Undue barriers to energy trade and investment need to be identified and removed where possible. Related challenges, including improving cooperation between international oil companies and national oil companies, and addressing looming skill shortages, will also need to be addressed. We look forward to reviewing the proposals being developed by the Expert Group in this context.

Continued large-scale use of fossil fuels by developing economies is an inescapable reality for the foreseeable future. New technologies that reduce associated carbon emissions, such as carbon capture and storage (CCS), need to be developed and deployed, along with the full suite of renewable technologies. Energy efficiency also has an important role to play in reducing global greenhouse gas emissions.

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For decades, oil has taken first place in world primary energy consumption. It still maintains its importance in being the number one input for countries' economic development. It is widely accepted that oil cannot be easily replaced by any other alternative energy resource. This is especially the case in the transportation sector in the short and medium term. On the other hand, natural gas and nuclear power can not compete fully with oil. Furthermore, transportation of oil is much more convenient than its alternatives, ie natural gas. Needless to say, renewable energy resources are far from replacing this crucial energy commodity, at least in the near future.

Global oil consumption has taken the biggest share in primary energy consumption for a long time (in 1998, for example, it was 38%). However, oil in the energy mix has shown a slightly declining trend and accounted for 34% in 2008 while in some industrialized countries, the share of energy resources, such as nuclear power or natural gas, have significantly expanded.

In recent years, lots of oil disruptions occurred due to various reasons, eventually leading to an increase in commodity prices. Ultimately, this had a negative impact on the energy consuming countries, especially on emerging economies, which are highly dependent on oil imports. Similarly, energy-producing countries will be negatively affected in the long run. In this sense, producers have a bigger responsibility in maintaining sustainability in the global oil market. It needs to be also noted that producers should not use oil as a means of weapon. Such an approach will not only have a damaging effect on the consumer countries, but it will be detrimental for the interests of the producers as well.

According to some projections, oil will keep its dominant position at least for another 20-30 years. Moreover, most of current oil reserves will be depleted and they will be limited to some countries. This foresight increases the significance of a constructive dialogue between oil producers and consumers.

It is important that the major oil producing countries need to take the lead in devising more effective and useful dialogue among themselves, with oil consuming countries as well as the international institutions, starting with International Energy Forum. Such a dialogue should also include minor oil consumers and producers, as well as international oil companies, which play a major role in the global oil industry.

On the other hand, transparent policies are vital for a sustainable oil market. These policies can provide important contributions to improve dialogue amongst the companies, the international institutions, and above all, the producing and the consuming countries. The main motive behind the establishment of the International Energy Forum (IEF) was to develop dialogue and provide solidarity between producers and consumers.

Today, oil data of more than 90 countries, representing more than 90% of global oil supply and demand, are collected with the efforts of the IEF, which includes both producer and consumer countries. This cooperation significantly contributes to the global oil market in making accurate projections and in pursuing policies for the interest of those countries. Obviously, we should have a closer focus on exploring and designing new mechanisms for furthering and strengthening this dialogue.

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The modern world is living through a period of serious economic turmoil, causing successive crises in the financial and social-economic sphere, the main areas of industry, and also in the fuel-energy complex, which is a particularly good barometer of the current situation and indicator of how the world economy will develop in the foreseeable future.

Given the important role of the energy sector in economic development across countries, regions and continents, it is necessary to take special measures to co-ordinate the energy policies of producer countries -- to establish diverse sources of hydrocarbons supply and stabilize world oil prices, enhancing global energy security. For this reason, regular and extraordinary meetings are held by of OPEC, heads of state, ministries, major oil and gas companies, and representatives of international energy agencies and financial organizations.

The European Union has tried to create mechanisms that promote mutually beneficial co-operation between energy producers and consumers -- on the basis of a market economy, characterized by transparency of transactions and freedom of competition.

Azerbaijan completely encourages these principles. Our country, which has developed upstream projects amounting to many billions of dollars in value, is prepared for its hydrocarbon resources to help guarantee and strengthen the energy security of European countries.

Most European countries are dependent on oil and gas imports. Imports of natural gas, in particular, are growing in importance - to serve the continent's need for electricity, light and heat. In this context, it is obvious and beyond any doubt that the Caspian region, as a major producer of energy resources, will be one of the principal guarantors of energy security in western and eastern Europe.

We are convinced that greater co-operation with foreign investors in upstream projects, especially in the identification of new geological prospects in the Caspian region, will result in an increase in the region's hydrocarbons potential and enhance its role as a supplier of energy resources to Europe.

We are interested in and understand the European Commission's idea of establishing the Caspian Development Corporation, with the participation of all relevant energy and transportation companies, financial and business circles. Its objective is to concentrate all efforts on creating a reliable, efficient, transparent, market-based energy-transport system, supplying energy resources from Central Asia and the Caspian region to EU countries.

In our opinion, it is necessary to create favourable and attractive regimes with optimal prices and tariffs that suit not only investors, but also link up the various parts of the business chain - harmonizing relations between producers, transit parties and consumers.

I consider that it is necessary to decide points concerning relations with producer countries of natural gas and to determine the mutual obligations and responsibility of all parties on the supply and transportation of natural gas.

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Energy, being the fundamental ingredient of economic and social development, continues to top the political agenda of every country in the world in the sense that, energy resources are limited and distributed unevenly in the world, while demand is continuously rising as populations grow and economic growth sustains.

Given this global situation, hydrocarbons will continue to be the fuel of choice for decades to come, but their development and production have entered a new phase. Reserves are large but finite, operations in new areas are becoming even more technically complex, and non-conventional hydrocarbons will form a larger part of the production base in the future.

It is obvious that the Middle East, North Africa and CIS regions with their vast oil and gas reserves, comprising the two thirds of the remaining oil and gas reserves of the World, will be the centre of gravity for future balancing of the supply-demand pendulum and will play the leading role in global oil and gas supply security.

Geopolitics steered by globalization and long term interests, will yield long-term strategic partnerships and co-operations. Both producers and consumers will have an impact on shaping the future and regional stability should strongly be supported. Limited energy sources of countries and increase in consumption have led the 'self-sufficient energy' strategy of the countries to become 'the development of international trade and regional integrations' strategy. Therefore energy trade is expanding rapidly, increasing mutual interdependence among countries and regions. Hence regional and inter-regional co-operation strengthens the global energy policy interrelationship in the energy world.

While energy markets around the world are more open now to trade, competition, and foreign investment than at any time in history, questions regarding market liberalization, transparency, and security of supply are pulling markets in the other direction. Competing forces seem to pit producers against consumers, development against sustainability, competition against regulation, and national issues against transparency. The solution is, to establish the economic linkages that connect producing countries to consumers increasing co-operation and creating a more stable, sustainable international environment.

For accessing and securing energy a well established and consistent co-operation among countries is needed. Governments must act decisively to accelerate the actions for this co-operation. Co-operative international research and development can promote effective energy policy and lay the groundwork for technology breakthroughs in clean, distributed energy sources that can benefit populations in the developing world.

In this context, the International Energy Forum (IEF) can encourage international dialogue and co-operation between energy consuming and energy producing countries by deepening dialogue among those involved in energy affairs, as well as enhancing transparency among governments by creating common energy databases. The Forum can also contribute to global energy security by converging producers' and consumers' policies to establish a win-win situation for both parties. Facilitating discussions on global energy security and encouraging producers and consumers to recognise the commonality of their interests is the only way of sustaining global economic growth, and the IEF is and will be expected to work towards achieving this goal.

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I'm delighted to be leading the new Department of Energy and Climate Change, which has been created to give an even greater focus to solving the twin challenges of tackling climate change and securing an affordable energy supply.

Over the last couple of years, and in particular over the last few months we have seen dramatic changes in oil prices. Oil price volatility has an impact across all levels of society, often hitting the most vulnerable hardest. Clearly, a stable oil market is in our common interest and the current economic climate only reinforces this.

This is why the phase of the producer-consumer dialogue that was started at the Jeddah Summit in June is so important. The medium to longer-term challenges facing energy markets that were identified at Jeddah still need to be addressed. If we can improve the way that the oil market functions, with supply and demand responding more efficiently to prices and investments based on shared understanding of future demand and supply conditions, we can reduce the likelihood of price volatility. That will be good for everyone, especially the poor and least developed countries, who are the hardest hit by high energy prices.

Even in a de-carbonising economy, the world will still need oil. So we will continue to need investment in production: both to meet rising demand and offset declines from existing fields.

At the same time we will need to continue to take urgent action to tackle climate change which, if not mitigated, will undermine global growth and security. This will include measures to diversify the energy supply through increased energy efficiency and accelerating the use of low emission technologies. It is therefore vital that producers and consumers work more closely together to understand clearly the outlook for consumption to ensure supply and demand match in a timely manner and at sustainable prices.

At the December meeting we will, working with the IEF, provide a progress report on all the long-term commitments agreed at Jeddah. Broadly these were:

1. Removing barriers to upstream and downstream investment
2. A shared understanding of future supply and demand trends
3. Improving the quality, completeness and timeliness of oil data
4. International progress on increased energy efficiency
5. International support to help developing countries alleviate the consequences of high oil prices.

As well as this, under the wider theme of 'Oil, Energy and the World Economy' we will present some analysis of the impact of the financial crisis on energy markets, looking particularly at the effect of the credit crunch on energy demand and investment and what this might mean for energy markets in the future. This will help us all to better understand the effects of the current economic climate and what further work is necessary to achieve our longer-term shared ambitions for the oil market.

I am grateful for the contribution the IEF has made to the preparation for the London meeting and am sure that together we can achieve real progress on 19 December.

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"Readers should note that the following article was written in July and based on the intervention of H.E. Minister Miguel Sebastián Gascón at the Jeddah Energy Meeting in June 2008. In the light of the events since then, it stands the test of time remarkably well".

The price of oil is above $140 a barrel, the highest price ever. In real terms, the current price is almost 50% more than the highest price reached during the oil crisis of the late 70's. Moreover, the rise in prices has been sharp, 100% in the last year and 500% over the past five years. Only during the first oil crisis was there a similar surge in prices.

There are two reasons inherent to the oil market that explains this increase. The first one refers to the strong growth of the emerging economies. Since 2004 demand from these countries has grown by over 15%. Nevertheless, this increase needs to be put into perspective since world demand for petrol has only increased by 5.7% over the past four years, compensated by a fall in consumption by OECD countries.

The second reason is the inadequate growth of supply. By way of example, Opec production between 2005 and 2007 was reduced by 100,000 barrels a day, as compared to an increased demand for 2.2 million barrels during this period. Surplus capacity in the industry has consequently fallen in order to increase short term production. Until 2003 surplus capacity ranged from between 3 to 6 million barrels, while between 2003 and 2007 this has dropped to a mere 1 to 2 million barrels, barely 2% of production. This means that supply is very tight, thus pushing prices up. By 2009 and 2010, however, the International Energy Agency expects a significant increase in surplus capacity owing to new projects and oil fields coming into production.

Notwithstanding the above, these two basic factors - supply and demand - do not fully explain the price increase of the past year. There is a third factor: a possible financial bubble. Certain aspects of the financial markets substantiate the possible emergence of this bubble. Since 2005 significant changes have taken place in the futures markets for raw materials. The beginning of the so-called institutional funds, as well as unduly lax regulations allowing too much leverage, have both fed this bubble. For raw materials as a whole and in monetary terms, investment in these futures markets has gone from 13,000 million dollars to over 250,000 million dollars, which means that it has multiplied by nearly 20 in scarcely four years.

In short, it is difficult to quantify what portion of the current price of oil corresponds to the speculative financial bubble and what portion to basic factors of the oil market. Besides, while these basic factors have been thoroughly identified, it is difficult to predict the emergence of factors that might "burst" this bubble. Until this happens, oil prices will continue to rise and the global economy will continue to suffer the ill effects.

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I would like to contribute some thoughts on the outlook to synchronized energy responsibility from the Ministers' Rostrum of the IEF Newsletter.

It is very crucial to develop a pragmatic global vision on the relation between energy providers and consumers in the sense of their mutual responsibility especially with the ongoing severe challenges both are encountering.

It is crystal clear that energy affects many lives either through the hydrocarbons supplied or the development of new technologies in augmenting depleting resources to reach a substantial number of people around the world in illuminating their homes, keeping their cars running and strengthening their business, as well as assisting in boosting and sustaining their economies.

Having said that it is of utmost importance to inform our respectable consumers with some facts of our commitment towards them in revamping quality of life throughout the world and in order to achieve this mission we incorporate concerted efforts, risk, financial means, environmental concerns and social obligations.

Some communities are aware of the fact that conventional resources are depleting and they have already started considering certain measures to prolong the enjoyment of such luxury. Others may not have the right approach to energy preservation due to the variation in the cultural backgrounds of one client to another.

Since ages it has been and will remain our sole paramount responsibility as energy suppliers to sustain a reliable energy influx reflected by greater economic prosperity, improved standards of living, and production of a kaleidoscope of hydrocarbon products.

The challenge we face, as did our predecessors, in maintaining such success in the forthcoming period, will require a wide portfolio of energy options and scenarios especially under the current skyrocketing energy demand.

To guarantee enough energy in the future, it is not anymore required to set action plans and policies with a wishful approach. On the contrary a pragmatic invasion of global, regional and indigenous problems will produce a dandy outcome.

It is time for suppliers and consumers to foresee the repercussions of our present actions and habits, and the failure to have the same affordable and reliable energy later.

The hydrocarbon industry is a long-term business. The new supply of hydrocarbons the world utilizes currently is available due to action plans and policies set by our industry over the last decade or more. Similarly, the decisions we set today regarding the whole value chain of our industry will likely reflect on the outcome for many years to come.

We devote remarkable resources and concerted efforts to recognizing, analyzing and assimilating these long-term dynamics. Though we never claim an ability to predict the future, we are always working to identity and analyze the trends and issues most likely to affect the long-term world energy business. Through this effort, we develop a planning framework based on what we see as the outlook for energy.

In some societies it is time to move from self-awareness to public-awareness to help extricate some of their habits and perceptions to energy consumption.

In better words such communities are not sure that one day they will be subject to severe energy phase-out due to their present attitude in draining their resources and this phenomenon might be a cause of a long enjoyment of social schemes i.e. subsidies etc. — or overwhelmed by cheap natural resources coupled with the lack in cultural energy preservation for the future.

It is time to blow trumpets, out of our responsibility towards global future generations and this will emphasise the outlook to multilateralism in coaching and changing the old methodology of having strategic commodities suppliers in one end and on the other end clients just consuming it.

Telecommunication has managed to shrink the world and I believe it is time for this tool to be utilized in an augmenting manner to address critical issues for the sake of sustaining a quality future. One of the most vital issues that has to be addressed is developing the scenario of a win-win responsibility between suppliers and customers in some communities where the drain of their resources is substantial and won't just reflect on their indigenous resources but on the global strategic scene.

It is our ultimate commitment to drive hard all means of securing our future prosperity and retaining the theme of prosperity as long as possible.

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The decision to establish an IEF Secretariat dates back to the 8th IEF Ministerial in Osaka, Japan. Following this, the Netherlands acted as host to the 9th IEF Ministerial and has chaired the Executive Board. The Dutch government highly values the IEF and its Secretariat and would like to thank the government of Saudi Arabia for hosting it in such a magnificent location.

Energy is vital to all of us. We can only safeguard security of supply and demand by working together. Cooperation and joint action is key. We have to find ways and means to avoid conflicts and solve disputes in a constructive way.

Countries have to create the right conditions, but companies are the real agents of energy security. NOCs and IOCs are open to cooperation. So let us create the possibilities for them to cooperate and enable them to realise synergies.

In recent years the wish to improve the quality of data resulted in the Joint Oil Data Initiative, which is now coordinated by the IEF Secretariat and its partners APEC, Eurostat, IEA, OLADE, OPEC and UNSD. A lot of work has already been done, though more remains.

Transparency will increase by further improving JODI and extending it to include the gas market also. And finally, we should inform each other about investments that will affect future capacity. This will provide more confidence for capacity growth in future, thus promoting stability. I think the IEF Secretariat has a lot to contribute in this area.

The Kingdom of Saudi Arabia has shown responsible leadership in taking up the initiative to organise last June"s Jeddah Energy Meeting.

The Jeddah process strengthened the dialogue between producers and consumers. More importantly it was a step towards concrete action on investments, shared oil market analysis and transparency. And action on these issues we need.

I am happy to see that the IEF Secretariat has played an increasingly prominent role in the recent debate. Its role was downright pivotal in preparing for the Jeddah Energy Meeting. We are all looking forward to the follow-up meeting in London this coming December.

Climate change is one of the major global issues of our time. Environmental problems have already given incentives to improve energy efficiency and have led to the present boom in investment in renewables.

But to be clear: fossil fuels will remain the backbone of the energy system for decades to come. So we have to prepare ourselves for a cleaner production and use of fossil fuels.

I would certainly welcome the establishment of a CCS-group within the framework of the IEF as suggested by the Ministers of UK and Norway. For my part, focus should be on the way in which CCS is part of an overall energy agenda and sustainable energy policy. Again, good international cooperation is essential given other work done. Saudi Arabia and the Netherlands organised a conference last June, a further plan of action is already being elaborated and both countries and the UK and Norway see themselves as frontrunners in the implementation of this action plan.

In summary - we need to extend present cooperation as we already see between our countries, between

NOCs and IOCs and for example on the issue of CCS. New alliances already are opening new horizons, create business opportunities and bring us closer to our goal: a cleaner, smarter and more varied energy system.

I consider it worthwhile to continue the close cooperation between OPEC, IEA and the IEF Secretariat as well. This combines the best available expertise on oil.

I am sure that the IEF Secretariat has an important role to play in all of these fields of endeavour. It already has played a major role in the discussions in Jeddah and its follow-up.

The full speech is available on the IEF Secretariat's website.

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H.E. Amanullah Khan Jadoon, Federal Minister for Petroleum and Natural Resources of Pakistan, outlines in this special article for the IEFS Newsletter his country's two-pronged strategy for enhancing gas supplies in support of economic development: accelerated domestic exploration and imports through pipelines and in the form of LNG. He underscores that not only Pakistan, but the whole South Asia region will benefit from the Iran-Pakistan-India pipeline project as it will provide a foundation for future economic growth, peace and co-operation as well as contribute to more gas-driven and environment friendly energy economies of two major energy consuming countries.

Federal Minister for Petroleum and Natural Resources since September 2004, Mr Jadoon is an elected Member of the National Assembly representing the Pakistan Muslim League. He has earlier served as Federal Minister for Kashmir Affairs.

Pakistan's energy mix is dominated by oil and gas. Together they contribute 80% of 56 million tonnes of oil equivalent (MTOE) of primary energy supplies. The other sources include 8% coal, 11% hydro electricity and 1% nuclear electricity.

According to Government's projections in the Medium Term Development Framework (MTDF) plan, Pakistan's energy requirement will increase to over 360 MTOE in the next 25 years, more than half of which will have to be imported. Although according to this plan, contribution of oil and gas is projected to drop from the present 80% to about 64%, natural gas is still expected to meet 45% of the primary energy needs at the end of the twenty-five year period.

Pakistan is exploring various options to enhance its gas supplies which are assured, affordable and sustainable on long-term basis so as to maintain the current pace of economic development. To meet this challenge, Pakistan has adopted a two-pronged strategy focusing on: (a) accelerating domestic exploration efforts with more attractive package of incentives for producers; and (b) import of natural gas through transnational pipelines and in the form of liquefied natural gas.

One of the viable gas import options being pursued by Pakistan is import of gas from Iran to Pakistan and its extension to India. Iran as the owner of the world's second-largest proven natural gas reserves is keen to exploit this resource as a source for its revenues. The biggest potential customers of Iranian gas so far are Pakistan and India.

The Iran-Pakistan-India gas pipeline project envisages laying of 2,200 km on-land pipeline to transport gas for both the countries. The total cost of the project was estimated to be over USD seven billion in 2006.

Pakistan's Ministry of Petroleum and Natural Resources has constituted separate working groups with Iran and India to deliberate upon technical, legal, financial and commercial issues of the project. The working groups have held several one-to-one as well as joint meetings so far. Despite the complexities that naturally involve negotiating and executing such a project, progress has been achieved on key components of the project like signing of the term sheet, consensus on major items of the gas sale purchase agreement, broad understanding on project structure, and appointment of international advisors. A Pakistani advisory consortium led by PricewaterhouseCoopers has almost finalized pre-feasibility reports for the Pakistan segment of the project.

Further negotiations of the three parties are in hand to finalize this venture. The degree of earnestness displayed by all the parties, since all will benefit from it, allows us to assume an optimistic conclusion of the project.

Benefits to Pakistan

For Pakistan, the replacement of imported oil with imported gas will increase energy security both in terms of security of supply as well as security of price in view of the long term contract with dedicated source of supply and guaranteed consumption. It will give relief to the hard-pressed infrastructure of ports, roads and railways which are used in movement of imported oil upcountry. In addition, Pakistan will have a strategic advantage as a transit country.

Regional Prosperity

The South Asia region will benefit from the Iran-Pakistan-India pipeline project as it will provide a foundation for future economic growth, peace and cooperation throughout the region.

It will result in a shift towards more gas-driven and environment friendly energy economies of two major energy consuming countries. Significant direct and indirect economic benefits during the construction and over the life of the project will be generated through employment, transit fees, availability of clean fuel, economic and industrial growth. The project will create major investment opportunities for the entire region including downstream business.

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Representatives from the International Energy Agency (IEA) were among the small group of participants in the first meeting of what was initially called the 'Producer-Consumer Dialogue,' which took place in Paris in 1991. This gathering, which sought to overcome the tensions between oil-producing and oil-consuming countries and focus instead on shared interests and concerns, was unprecedented at the time. Seventeen years later, the 'dialogue' can only be called a great success, as Ministers and senior policy makers from over 90 countries have been invited to come to Rome for the 11th International Energy Forum (IEF) Ministerial meeting.

I would like to start by welcoming the new IEF Secretary General, Noé van Hulst. Mr. van Hulst brings a wide breadth of experience to this challenging position. A skilled policy maker with many years working on energy issues, he also spent over four years as one of the senior officials at the IEA. The IEF Secretariat will certainly flourish under his leadership.

Since its establishment in Riyadh in 2003, the IEF Secretariat has been given the mandate to further develop the 'dialogue' between oil- and gas- producing and consuming countries. In addition to supporting the organisation of the biennial Ministerial meetings, the IEF broadened its scope to include the energy industry. The International Energy Business Forum integrates top-level executives from the major energy companies into discussion with policymakers. This new dimension underscores the important role of industry in energy issues ranging from investment to technology. One potential area for future IEF activity could be ensuring the development of human resources in the energy sector given the current shortages of skilled personnel.

The role of the IEF in improving data collection and dissemination has also been instrumental. In particular, the IEF should be congratulated for its outstanding contribution in building and running the Joint Oil Data Initiative (JODI). More work needs to be done, however, and the IEA looks forward to continued close co-operation with the IEF to further improve the quality and timeliness of oil and, perhaps eventually, gas data. In addition to collaborating on data, statistics and other energy-related subjects, the IEA is pleased to serve on the IEFS Executive Board. These multiple and productive linkages between the secretariats ensure coordination and maximise the potential for synergies.

With oil prices surging past $100 per barrel and uncertainty characterising global energy markets, the ongoing dialogue between producers and consumers is more important than ever. The IEF is the appropriate facilitator, but member governments must provide both support and input. As Ministers convene in Rome, it is my hope that they will provide clear guidance for the future activities in which the IEF can add value.

In a relatively short time, the IEF secretariat has established a presence in the energy arena. The IEA is committed to continue its efforts to work and collaborate with the IEF. As long as there are energy producers and consumers, we will need dialogue.

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The first ministerial meeting between oil producers and consumers took place in the summer of 1991, seventeen years ago. Since then, the global petroleum and energy markets have confronted five major challenges.

The first major challenge, which I call the development of a globalized oil market, started in the eighties and took on defined shape in the nineties. The globalization of the oil market means that prices are decided freely within an open market, petroleum is directed to where the demand is, and buyers and sellers are fully integrated at the global level.

With the help of this globalized market, producers and consumers have been able to deal successfully with many problems with minimum impact on energy markets and wider economies. Crises such as the production cuts from Nigeria and Venezuela in early 2003, the halt of Iraqi oil exports in March 2003, the reduction of oil production from the Gulf of Mexico and damage to oil refineries in 2005 as a result of Hurricanes Katrina and Rita, and the loss of Alaskan production the following year were all met successfully within the context of this global market system. In other words, I believe this is a challenge we as producers and consumers have successfully met.

The second major challenge we are facing today is the recent flood of money into the oil futures markets from various directions, including hedge funds, institutional and individual investors, traders, and speculators. As an indicator of the scale of this development, I would note that paper markets have grown 45 times faster than physical markets over the last four years. Of course, there is a lot of debate about the impact of this new money and these new players in the oil market. Many experts believe that the influx of investments into the future oil market—which is also related to other financial developments such fluctuations in the value of major currencies, the sub-prime mortgage crisis, and interest rate movements—are behind the increase of oil prices during the last eight months.

The third challenge is reducing harmful emissions from fossil fuels while at the same time making sure these sources of energy are available to contribute to higher economic growth and human prosperity, especially within developing countries. In this regard, I believe that we should avoid political or individual economic self interest and focus instead on scientific and technological solutions such as carbon capture and storage, as well as efficiency in energy uses, cleaner burning fuel formulations, and more efficient engine designs.

The fourth challenge is dealing with the artificial fear about the availability of oil supplies, resources and production capacity. Frankly, I believe that this fear has neither a scientific nor an economic basis. Nevertheless, it is creating a perception of scarcity and is therefore helping to push oil prices higher and higher. Take for example the issue of petroleum resources: all respected petroleum engineers, geologists and upstream professional organizations believe that the world has enough petroleum resources to easily meet demand for at least the next 30 years. Yet, a handful of non-specialists are able to scare the world with theories about peaking oil reserves.

The second area related to fear and scarcity is the issue of production capacity. For example, we in Saudi Arabia have a current production capacity of 11.3 MB/D and 12.5 MB/D by year end 2009. Yet some people who have never actually visited Saudi Arabia and who have a limited scientific knowledge about production capacity and the oil industry in general (let alone the specifics of the

Kingdom"s oil industry) lower their estimates of Saudi production capacity to the range of 10 to 10.3 MB/D. Regardless of their motivation in low-balling their numbers, they create a fear of availability of oil in case of supply shortage which bolster oil prices.

The fifth challenge we face is the increasing level of engagement between food markets and production and energy markets and uses. For the last one hundred and fifty years, petroleum has been used to produce more and more and cheaper and cheaper food; at the moment, however, some food crops are being increasingly used as sources of energy for cars, planes and other transportation vehicles.

Let us leave aside the wisdom of such policies and practices, and for the moment simply note that the energy and food markets are increasingly interlocked, not only at a national level but also at the international level. This is a major issue for all of us, and it requires a logical, scientific and economic approach if we are to optimize both energy use and food production.

In sum, the last four challenges indicate that we as producers and consumers still have collaborative work to do if we are to resolve the concerns and problems which affect the wellbeing of our citizens. One method, among others, to deal with these challenges is to strengthen the existing framework we have for multilateral co-operation and collaboration which includes both the International Energy Forum and its Secretariat.

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The world is concerned about energy security, and justifiably so. Headlines trumpet the news of ever higher oil prices and warn of the dangers of global warming. Finding alternative sources of energy to complement existing resources and address these concerns is crucial. Various key actors in the world's energy markets are already making decisions that will have a major impact on the fortunes of virtually every nation on earth. Our collective economic well-being is at stake.

Mexico shares these concerns. As one of the world´s main oil exporters---and also as a growing importer of oil products and energy technologies---Mexico has a considerable interest in stable energy markets.

It is crucial that energy prices reflect the true cost of bringing new resources to market for the consumers that need them. As a producer, we need to receive fair compensation for our oil reserves; as a consumer, we need to supply our domestic needs at prices that are consistent with economic growth. And like most countries, Mexico is vulnerable to the increasing effects of global warming. At the forefront of our energy strategy, we stress responsible policies that are compatible with sustainable development.

Mexico shares these concerns with many countries, and we know that they cannot be addressed unilaterally.

International energy markets are far more integrated today than in the past century, when the first serious initiatives for energy co-operation appeared. One result of this has been to make it abundantly clear that, at least in energy matters, we are all in the same boat. If we hope to overcome the world´s current energy challenges, we desperately need greater dialogue, consultation, and effective co-operation between producers and consumers.

In an effort to promote closer energy relations and co-operation, Mexico has joined its neighbours to the North and South, as well as its partners in other regions. Mexico has worked to improve energy access and technical capacity in Central America. At the same time, we have participated in the drafting of conventions that allow for the peaceful use of nuclear energy.

Along the way, Mexico has worked to establish efficiency standards, improve the collection of statistical information regarding supply and demand, and develop new energy links for all of North America. Looking forward, we have appealed to our friends and partners throughout the world for greater scientific co-operation. Through bilateral and multilateral dialogue, we seek new and visionary ways to address our own challenges, as well as to help solve those of the international community.

Make no mistake, the struggle we face will be a battle. If we are to win, we must work more closely with international financial institutions, agencies for international co-operation, and other organizations to facilitate the construction of infrastructure in less-developed countries. In many developing nations, the lack of terminals, ports, roads, and other necessary facilities make it virtually impossible to realize the potential for energy co-operation. In short, there is insufficient funding for energy projects throughout the world, and the situation is worst in the regions that need it the most.

Mexico is delighted to participate in the 11th IEF, and we are honored to have been selected as host of the next IEF in 2010. We realize that this is a great responsibility. We accept the challenge, and we undertake it both solemnly and enthusiastically. Mexico is an emerging market with a strategic---if not pivotal---position, placed by fate between the developed and developing economic regions of the world. Our experience helps us to understand the needs of all regions; we believe that Mexico is ideally suited to help build bridges of co-operation between all countries…bridges that the world desperately needs.

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The first meeting of the energy producers and consumers that took place in Paris in 1991 was the start of the dialogue Marathon. Since 2000 the dialogue is continuing as the International Energy Forum (IEF).

Since then, a permanent Secretariat has been established and, as of the Amsterdam Forum in 2004, the International Energy Business Forum (IEBF), bringing together politicians and energy industry leaders, has preceded the Ministerial Forum. The IEBF has been a welcomed addition to the dialogue process as it gives the operators of the Energy Industry a unique platform to air their concerns and needs for a more efficient and timely response to the challenges they have to address.

JODI, the Joint Oil Data Initiative, managed by the IEF Secretariat is developing well and increased political support will greatly enhance its effectiveness and benefits. Presently, JODI is limited to oil and will in time cover natural gas and other important sources of energy so as to include more elements and factors that influence the global energy balance.

Irrespective of what topics are chosen for the different sessions of both, the Ministerial and those with the industry leaders, the objectives of the dialogue remain unchanged from those of the Paris meeting in 1991.

In setting the agenda for the Doha Forum, held in 2006, we revised the format to encourage discussions beyond the listed topics and allow participants to raise issues they considered important and relevant. The unprecedented number of bilateral discussions that took place throughout the Doha Forum was a good indicator of the level of willingness and desire for better understanding of issues and readiness for co-operation in attempting to bridge gaps and jointly move along the road that leads to agreed objectives of mutual benefits.

The ultimate goal of the dialogue will remain to be full transparency of agendas leading eventually to joint planning of the global energy balance. There are numerous keywords that can be used in the search for energy security, however, transparency and co-operation will remain the most important.

We hope and expect that the Rome 11th International Energy Forum and the 3rd International Energy Business Forum will achieve more for all involved. We strongly believe that we are on the right path and all will eventually harvest the fruits of our sincere efforts in making the dialogue successful.

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The 11th International Energy Forum is taking place at a decisive juncture. More than ever before, the political agenda is dominated by the question of a secure, affordable and climate-friendly supply of energy. More than ever before, dialogue and co-operation are important.

One issue in particular is predominant: the rising oil price. This issue was also at the heart of the last International Energy Forum in Doha. Anyone who hoped that the continuation of the dialogue outside the ministerial conference would steady the markets and bring about a lasting reduction in the price of oil has been disappointed. The oil price today is significantly higher.

For this reason, the International Energy Forum has taken on the task of co-ordinating a database for an exchange of information on the oil market. JODI, this first joint project, remains a vital task. We need a further improvement in transparency, and co-operation between the stakeholders needs to be expanded and consolidated. Timely, precise and reliable reports of all relevant data, and the participation of additional countries, are especially important.

Similarly, the concern about sufficient and timely investment to maintain a stable oil supply has become more pressing since Doha. Progress needs to be made on this.

There is no lack of explanations of the major fluctuations in price we have seen in recent years. Many stakeholders benefit from a high oil price - as long as demand does not collapse. On the other hand, a high oil price hits the poorest countries hardest. And it is also having an increasing impact on broad low-income sections of the population in less-poor countries. Energy bills are accounting for a rising proportion of consumer spending.

One key response to these challenges is energy efficiency. Energy saving is still the best energy source. Ensuring that energy is consumed economically, and giving top priority to energy efficiency, are not measures targeted against the producer countries.

On the contrary: efficient use of oil and energy conserves resources and thus extends their lifetime, not least in the interest of the producers.

This means that producers and consumers gain time in which to prepare for a future energy mix with a higher proportion of new energy sources. They should start using the time now - and they should do so together. An enormous market is going to develop here. That already seems clear today.

The International Energy Forum emerged in the light of two oil crises. So far, the emphasis has chiefly been on a secure supply of what is currently our most important and most versatile fuel. Oil will remain the dominant theme of our dialogue for a long time to come.

But this much is already clear: as the dialogue becomes deeper and more established, it fosters an understanding of the interests, perspectives and constraints on both sides - consumers and producers. In this way, trust is built up. Both sides are becoming more and more focused on the interrelationships of a future global energy policy. Alongside security of supply, other increasingly important topics include the energy mix, efficiency, technology and climate protection.

The International Energy Forum can make a major contribution to a global dialogue reaching beyond the traditional issues relating to the oil market. It is the only organisation of its type which is open to any country which has questions to ask about a secure and sustainable energy future.

I am glad that Germany can continue to support the work of the IEF, both as co-host at the 12th International Energy Forum in Mexico in 2010, and as a member of the Executive Board.

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I recently had a very fruitful dialogue with my counterpart, His Excellency Ali Al- Naimi, Minister of Petroleum and Mineral Resources of the Kingdom of Saudi Arabia. We had a very cordial exchange of views particularly on the effect of the spiraling cost of fuel in the global market. While agreeing on the circumstances which compel oil producing countries to increase prices, I am particularly concerned about the hardships faced by developing countries as consumers due to oil price increases.

The phenomenal rise in the price of oil has affected almost every country in the world except the producing countries; the most affected being the third world countries or the developing countries.

The recent astronomical rise in the price has caused the virtual collapse of the economies of several developing countries and this in turn has affected the living standards of the ordinary people, even the matter of procuring basic essentials has become a serious issue. Therefore, it is very important to focus on the economic situation of the consumer.

I am now representing a consumer country. But very soon I will also represent a producer country. Even when my country becomes a producer, my focus will be to protect the consumer.

The oil price hike has affected the economic growth and indeed created a high rate of inflation resulting in the prices sky-rocketing to an intolerable height.

Needless to state, that oil is the major energy source on which agricultural and industrial activities are based, and in the absence of any alternative sources of energy at the moment, even the activities in these two areas have slowed down. Developing countries now find it extremely difficult to achieve their development targets.

The negative effect of this price hike, apart from lowering the living standards of the people, has made democratically elected governments of the developing countries targets of terrorist activities and destabilizes elected governments.

These are issues of such vital importance that it is hardly necessary to emphasize the need to address them by the International Energy Forum (lEF) in its forthcoming Ministerial meeting to be held in Rome in the month of April 2008. The agenda would be a multilateral dialogue amongst the member countries to find remedies such as alternative sources of energy, not excluding an appropriate mechanism to prevent further increase in the prices.

I would like to put forward a couple of important suggestions to be considered at the forthcoming International Energy Forum. I suggest that it is appropriate to monitor the comparative price increases and take remedial measures to minimize the negative effects.

I would further suggest that the attention of leaders of oil producing countries be drawn to the establishment of a Fund through which a certain percentage of price increase can be used exclusively to compensate developing countries.

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One word: interdependence. In an era of globalisation, expanding international trade, instant mass communications, rapidly advancing technology and greater mobility; it is perhaps the word that most aptly fits the world in which we live.

And at the heart of all this is the global energy system, something on which the whole world depends. It is a system that is finely balanced and one where stability must be the mantra. The right decisions need to be made, as the interrelationships between economic growth, social progress, energy security and the protection of the environment become ever more fundamental. OPEC attaches great importance to this, which can be viewed in the Riyadh Declaration that concluded the Third OPEC Summit of Heads of State and Government in Saudi Arabia last November.

The Organization has long recognised the importance of adopting a multilateral approach to the producer-consumer dialogue. This includes being actively involved with the International Energy Forum Secretariat and the development of the Joint Oil Data Initiative (JODI), as well as conducting energy dialogues with the European Union, China, Russia, a number of other non-OPEC producers and the International Energy Agency.

As an industry inclusivity is paramount. We must continue to push existing and new avenues of co-operation with innovative thinking, collaboration, timely adaptation and swift action on key issues. It begs the question: what areas should we be looking at?

Whilst JODI has made much welcome headway in advancing the provision of accurate, reliable and timely data, improvements can still be made to ensure a better understanding of the market. We all know that certainty is vital. None of us want the volatility that has characterized the recent past, since it is damaging to all responsible parties.

What is important is to recognize that we are not just talking about historical data. For example, recent energy and environmental policy initiatives, involving subsidies for competing fuels and higher tax rates, tend to push towards a reduction in oil demand. We need to know exactly how these will play out given the long-lead times and major investments required. Over- or underinvestment is not conducive to a well-balanced market.

Technology is an important area too, particularly in the promotion of cleaner fossil fuel technologies. This was highlighted at the recent OPEC Summit, with four Member Countries - Saudi Arabia, Kuwait, Qatar and the UAE - announcing that they would contribute a total of $750 million towards funding research into energy, the environment and climate change.

One such technology is carbon dioxide capture and storage, which is a proven technology and has a large economic mitigation potential. What needs to be recognized, however, is that developed countries, bearing the historical responsibility, and having the technological and financial capabilities, should take the lead in the development and deployment of this technology, as well as in its transfer to developing countries.

The human resource is a further area of concern and the difficulties in finding and hiring skilled labour need to be addressed at a global level. This means concerted efforts to restore this essential capacity, by facilitating education and training in energy disciplines, and making the industry an attractive career choice.

What is clear is that we need to co-operate with each other to promote synergies and drive real change in our industry that benefits all parties. Not just as producers and consumers, National Oil Companies and International Oil Companies, but as partners working together towards the shared objective of a stable and sustainable energy future in an increasingly interdependent world.

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The year 2008 could mark a milestone in the long history of petroleum, as the oil price crossed the highly symbolic threshold of $100 /barrel. This new development stirred debate all over the world, in oil exporting and importing countries, regarding its causes, sustainability and implications for both parties.

Indeed, whereas some perceive it as cause for alarm, others look at it as though it was a mere short-lived spike, in the current cycle of the petroleum industry. Yet a serene analysis of the current price environment, allows some interesting observations.

· There is a consensus that the current price include a significant share (up to one third according to several analyses) due to non market fundamentals;

· The yearly average price for 2007 was still lower than the highs reached in the early 1980's, when put in real terms;

· The global economy has shown, over the last few years, a genuine resilience to this upward oil price path;

· The positive implications in terms of a more efficient use of a finite energy resource, less carbon emissions and a highly stimulating booster for the promotion of renewable energy sources, on the long transition road to a new economy.

From these observations, we can draw some conclusions regarding the challenges that the ongoing global energy trends raise for producers and consumers, but more importantly the multiple opportunities they offers for all stakeholders.

Indeed, if one third of the current price level is due to factors other than supply and demand, there is clearly room for producers and consumers to join force to reduce volatility, through better regulation of the speculative activities, increasing predictability, etc… OPEC has been calling for such joint effort through dialogues with various parties within the oil importing world but also with other oil and gas producers.

There is evidence today that the relatively slow expansion of the petroleum industry over recent years was to a great extent a result of the divestment in human capital over the previous two decades that followed the price collapse of the mid eighties. Industry should meet the challenge of balancing short term benefits of cost cutting, with the long term reward of a strong comparative advantage of investment in human resources, when opportunities are offered by the ever expanding global energy needs.

Algeria, like other petroleum exporting countries, has been actively looking for a shared solution to the common challenges facing oil producing and consuming countries. Hence, as an OPEC member it is an active proponent of dialogue with consumers, and as within the IEF it has been a committed member since its inception.

On the domestic front, Algeria has been for decades promoting the use of environmentally friendly energy carriers such as natural gas and LPG, to replace more polluting fuels. One positive side effect was to free more petroleum for export. For the same long period, Algerian oil industry has invested heavily to reduce flared gas to marginal levels. On the same track, Algeria has developed a major Carbon Capture and Storage (CCS) project in the gas prone region of In Salah, which is one the few such projects worldwide.

More recently, Algeria has launched an ambitious programme to develop the vast potential of its renewable energy sources, particularly solar. A first hybrid gas solar power plant, using the solar thermal technology is under construction and should be followed by others, with the objective of meeting 10% of the electricity need of the country by 2030 through renewable energy.

Apart from contributing to the dialogue and co-operation to meet the current challenge of stabilising oil market, Algeria is committed to implement an energy policy which includes environmental protection and to promote renewable energy sources. Thus, it is looking for co-operation with all stakeholders, including the industry and the research community to achieve its stated targets.

On the eve of our 11th International Energy Forum, we are looking forward to join force with interested parties to explore all avenues for co-operation to secure a sustainable energy path.

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An enormous challenge facing us today is ensuring reliable and affordable energy to the billions of people across the world. Inter-regional trading in crude oil and products accounts for over 50% of the global oil production. The global hydrocarbon supply chain is complex, covering large distances, different modes of transport spanning diverse geographical regions, a huge variety of products, etc. The supply chain is an important link between producer and consumer nations which drives the wheels of the modern global economy. Developing countries in Asia and Africa have to meet the growing energy needs of their people. Also, the geographical endowment of global hydrocarbon resources points towards an increasing interdependence in the future, with economies of both producing and consuming countries closely intertwined.

The turbulence in the international oil market over the past 5 years and record high oil prices are hard facts. The Speculators vs Fundamentals theory has generated a lot of debate but shed little light on the reasons for high oil prices. There is no denying the fact that structural shortcomings across the hydrocarbon supply chain are responsible for this situation and addressing them urgently should be a key focus for all of us.

Dialogue is the only method for addressing matters of such urgent concern in today's globalised world. India is committed to this principle of dialogue among oil producing and consuming nations, based on trust and mutual respect for one another. India has taken the initiative to strengthen the process of dialogue by hosting Ministerial Round Tables involving major Asian consumers and producers. The first Ministerial Round Table was held in January 2005 and saw the participation of Middle East producers and major Asian consumers. This was followed by another Ministerial Round Table in November 2005 for sharing of perspectives by North & Central Asian producers and Asian consumers.

India has made significant contributions to the supply chain, particularly in the refining sector. During the last 10 years, India's refining capacity has more than doubled from 62.2 million tons to 149 million tons. From a net product-importing nation, India has emerged as a major product export hub, with current exports of over 30 million tons. We have plans to add about 98 million tons of refining capacity in the medium term. In the area of exploration and production also, India has taken several initiatives. 6 rounds of the New Exploration and Licensing Policy (NELP), with attractive terms, have been held, inviting international bids and the seventh round is in progress currently. While we are relentlessly working on the domestic E&P sector, we are also encouraging Indian companies to take up E&P activities abroad. We believe in an investment climate that promotes free trade with lower barriers to investment. India will continue to strive to positively contribute to the world oil supply chain both in the Upstream and Downstream sectors.

India, an Executive Board member of the International Energy Forum Secretariat and co-host of the upcoming 11th IEF at Rome is committed to playing an active role in the emerging global energy scenario. The theme of the IEF 'Energy Dialogue to Respond to the Global Challenges' reflects the most pressing global concern today. Beginning with the first step of bringing the producers and consumers together to share their perspectives, the upcoming IEF ministerial round attempts to embark on a path of collective action to respond to the energy challenges facing us. This is indeed a giant step forward. I am optimistic that our collective efforts in this sphere will take us forward and enable us to confront issues in a cohesive and concerted manner.

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As Ministers and officials of the energy producing and consuming countries are gathering to meet in historical city of Rome for 11th International Energy forum, they can look back with some sense of satisfaction to achievements of the dialogue among themselves to tackle the numerous challenges in the international energy arena in the relatively short history of this process.

As a founding member of OPEC and one of the pioneers in oil production which will mark its 100th year as an oil producer this June, Iran has always promoted dialogue with other producers and consumers, since we believe that the challenges in this area are so complex, no single group can claim to have solutions for them on its own. In this connection, we took practical steps in the early 1990s to invite major consumers and producers for a meeting in the historical city of Isfahan. The success of this initiative prompted participants to institutionalize the dialogue in following years.

The challenges our industry has had to face in recent years has become even more complex, making co-operation among all parties involved vital for the smooth functioning of energy markets. I hope this forum will be successful in bringing closer the viewpoints of producers and consumers of energy to ensure the long term stability of international energy markets.

· It is our strong belief that the energy industry is an industry of peace and requires political stability for unhindered flow of investment which is a pre-condition for security of energy supply.

· Some consumers attempt at channeling funds for alternative energy sources without due consideration to their economic viability. The resulting inventory stockpiling will heighten the concerns of producers about surplus capacity expansion.

· Investments in cleaner fossil fuels by developed consuming countries which possess financial resources and technological capabilities will not only address environmental concerns but also help the issue of security of supply and demand.

· The fact that current oil price levels have little to do with market fundamentals and are more responsive to issues such as US dollar weakness as well as political and geopolitical concerns, for the sake of market stability, the function of speculators in the paper markets needs to be addressed.

· The gas sector which is much more capital intensive, and natural gas which is the fuel of choice for its environmentalfriendliness, require greater support and encouragement from producers, consumers and the industry. All attempts must be directed to develop the required technology and financial resources.

· Co-operation in energy conservation and utilization in producing countries together with gradual elimination of subsidies will be a major step towards ensuring access to energy supplies. Both producers and consumers should implement policies supportive to this end.

The transfer of alternative energy technologies, especially nuclear energy and clean fossil fuels, which are being pursued by major consumers, is the legitimate right of all consumers. Although Iran is a major and reliable energy exporter, because of its young population, it has no choice but to utilize all accessible forms of energy including nuclear energy. Our approach to this issue is also non-political.

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H.E. Shokri Ghanem, the Chairman of the National Oil Company of Libya, highlights in this special article for the Newsletter the potential of Libyan gas exports in the context of regional energy security along side Libya's increasing importance as exporter of oil to global markets. His perspectives have special relevance for the opening plenary session of the forthcoming 8th Offshore Mediterranean Conference organized jointly by the OMC and IEF Secretariat on the 'Mediterranean Dimension of Global Energy Security' in Ravenna, Italy on 28 March 2007. Dr. Ghanem will share his perspectives as a speaker at the session, which will be inaugurated by H.E. Pierluigi Bersani, Minister of Economic Development of Italy.

Prior to assuming his present position last year, a position with functions corresponding to those of Ministers of other countries, Dr. Ghanem served for three years as Secretary (Prime Minister) of the General People's Committee of Libya after serving as Secretary (Minister) of the General People's Committee from 2001-3. Following a distinguished academic career, he was Director of OPEC's Research Division from 1999-2003, the last two years also in charge of OPEC's Secretariat. Dr. Ghannem was selected 'Petroleum Executive of the Year for 2006' by the Energy Intelligence Group.

It gives me great pleasure to contribute to this edition of the International Energy Forum Secretariat Newsletter which will be published in time for presentation at the 8th Offshore Mediterranean Conference to be held in Ravenna in March 2007. I must also say that I was extremely delighted to participate in the 10th International Energy Forum Ministerial and the 2nd International Business Forum, which were held in Doha in April 2006. I certainly found the discussions with the Energy Ministers quite stimulating and definitely share their view that the International Energy Forum can play a pivoting role in bridging the gap between energy consuming and producing countries through deeper dialogue that activates cooperation and inhibits confrontation. I would also like to take this opportunity to stress the importance of enhancing the energy dialogue between the various energy players at all levels. Only through such a process can successful and lasting relations be achieved and global energy security addressed. As a case in point, the Libyan-Italian dialogue and cooperation experience, which has resulted in bringing the vast Libyan gas resources to the European market through what became known as the Western Libya Gas Project (WLGP), is worthy of special mention. This project, which was launched in 1999 and completed on schedule in 2004, and which involved the development of two large Libyan fields: the onshore Al-Wafa and the offshore Bahr Essalam fields, and the construction of the longest sub-sea pipeline in the Mediterranean (The Green Stream Pipeline) which currently supplies Europe with 8 BCM of gas per year, could not have been possible without the outstanding cooperation between NOC-Libya and ENI-Italy. Undoubtedly, the project has contributed both to the growth of Libyan economy and to the diversification of Europe's energy supplies.

Important Supplier

With the inauguration of the WLGP and the stepping up of exploration programs for both oil and gas, I believe that Libya, in addition to being a major supplier of oil, will become an important supplier of gas to Europe during the coming decades. Of course, Libya's role as a major oil producer will continue as well in view of the substantial proven oil reserves amounting to 39 billion barrels and the fact that there is great potential of discovering more oil since only 25% of the country is actually explored and even this area is not yet fully developed. Our policy aimed at opening more areas for exploration and attracting foreign investment through a highly competitive and a transparent process will see to it that, by 2015, Libya's oil production will once again reach 3 million bpd. However, Libya's potential of becoming an important gas producing country as well is just as great. To put this in perspective, with proved gas reserves of around 47 TCF, Libya is no stranger to the international gas market since it became in 1970 the second country in the world (after Algeria) to export LNG to Italy and Spain. Furthermore, with about 50% of these reserves being undeveloped, and the high possibility that the country's proved and probable gas reserves could be as high as 100 TCF, exports to Europe of pipeline gas and even LNG will ultimately increase in the years to come. More specifically, plans are already underway for doubling the capacity of the gas pipeline to Italy, revamping and expanding the capacity of the existing LNG plant, and even the possible construction of a new LNG plant. Certainly, the remarkable success of the previous three open bid rounds conducted during 2005 and 2006 stands as a testimony of Libya's great potential as an oil and gas producing country, and gas would definitely be the focus of the next exploration round to be launched in the first quarter of this year. Keeping all this in mind, I believe that Libya will play in the coming decades a major role in enhancing and broadening the Mediterranean dimension of global energy security.

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Prior to assuming the position of Secretary of Energy in February 2005, H.E. Samuel W. Bodman served as Deputy Secretary of the Commerce Department from 2001 and Deputy Secretary of the Treasury Department from 2003. Before joining the Administration of President George W. Bush, Secretary Bodman, a Sc.D. in chemical engineering from the M.I.T., was Chairman and Chief Executive Officer of Cabot Corp., a multinational chemicals and specialty materials company.

It is well known that global demand for energy is rising rapidly and will continue to do so. By 2030 global energy consumption is projected to grow by over 50 percent, with 70 percent of that growth coming from the world's emerging economies. And as all nations prepare to meet this growing demand, we also must confront some realities about our current situation: that most economies around the world are fundamentally hydrocarbon-based; that fossil fuels are often in places that are geographically hard to reach and geologically difficult to develop; that disruptions in global supply can harm developed and developing nations alike; and, of course, that we must address the realities of global climate change.

For all nations of the world, it is clear that we need a secure, clean and affordable supply of energy. Our collective ability to attain such an energy future is directly related to: whether or not our economies will grow and our people will prosper; whether or not our industries will operate efficiently; whether or not our earth's climate will worsen or improve; and perhaps most importantly, whether or not our people will be safe and secure. And the scale and scope of the challenges we face will only grow more pressing over time, as traditional sources of energy become more stretched and demand continues to grow.

Given this reality, President Bush has committed the United States to a path to a more secure energy future. And further, we believe it is time for the world community to embrace a new paradigm of energy security and acknowledge that the international nature of this problem requires coordinated action on a global scale. To that end, the United States has proposed five co-operative global goals for all nations who join us in choosing the path of responsible action.

Five Goals

First, we must diversify the available supply of conventional fuels and expand production.

We need not only expanded supply from existing sources, but as importantly, we need more producers supplying global and regional markets. Diversification of supply will help to defuse the risks of supply disruptions from any one source. But in order to achieve this, we need stable regulatory frameworks, open investment climates, adherence to the rule of law, and market-based pricing of energy resources.

The second goal is related to the first: we must diversify our energy portfolios by expanding the use of alternative and renewable sources.

Diversification toward alternatives could greatly relieve pressure on markets for conventional sources over time, while also addressing environmental concerns. Among other measures, we must enhance the use of nuclear and renewable electricity generation in the power sector and develop alternative fuels such as hydrogen, biodiesel and cellulosic ethanol for our transportation sectors.

The third goal: we must promote increased energy efficiency and conservation measures.

On a global scale, we must continue to encourage consumers to choose energy-efficient vehicles and products. All nations also must reduce the energy intensity of our industries. And, we can all do more to strengthen our cooperation with developing countries to encourage policies that will ensure economic growth and responsible energy use.

Progress on expanding our use of alternatives and increasing global energy efficiency will move us toward a fourth goal: we must take steps to improve our earth's environment to reduce pollution and the emissions intensity of the global economy.

Human activity is contributing to changes in our earth's climate. There is no question that this is a serious challenge. And so, the focus must continue to be on developing and deploying solutions that are technically and economically sound.

The final goal: we must maintain the global energy supply system and protect critical energy infrastructure to ensure a more resilient, secure and less volatile market.

Delivering energy resources is as important as gaining access to them - and the governments of the world are uniquely positioned to achieve this goal in a coordinated way. All nations should take steps to protect and modernize critical energy infrastructure, safeguard sea lanes, and facilitate multiple delivery routes. At the same time, we must be prepared to address any severe supply disruption by maintaining adequate strategic reserves and using them in a coordinated fashion.

A New Paradigm

Agreement on these five goals will define a new coalition of countries committed to a peaceful, secure and environmentally responsible energy future. And the International Energy Forum will continue to play an important role in achieving this new paradigm. Through its efforts to bring together energy producers and consumers, to enhance market transparency, and to recognize the crucial role of industry, the IEF will help us all meet our energy challenges.

The world has certainly united around issues of common cause before, and I would argue that there are few more compelling global concerns today than the need for a safe, affordable and clean energy supply.

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H.E. Benita Ferrero-Waldner, Member of the European Commission and Commissioner for External Relations and European Neighbourhood Policy, outlines from the Ministers' Rostrum efforts to develop a focused external energy security policy as an integral part of the EU's foreign policy in a new global energy landscape. Cautioning that the world no longer can take secure and affordable energy for granted, Commissioner Ferrero-Waldner notes internal and external measures to be taken and recognizes the important role that the International Energy Forum has to play in reminding producer, consumer and transit countries of their common interest in a non-discriminatory and competitive world energy market. Commissioner Ferrero-Waldner and Energy Commissioner A. Piebalgs convened a Conference on the EU's External Energy Policy in Brussels in November 2006, which the Secretariat was honoured to attend.

Before assuming her present position in 2004, Commissioner Ferrero-Waldner, served as Federal Minister of Foreign Affairs of Austria from 2000. Prior to being appointed Minister, she served as State Secretary for Foreign Affairs from 1995. Her earlier positions include that of Chief of Protocol of the United Nations Secretariat in New York and posts in the foreign service of Austria.

The world has recently entered a new energy landscape. After a long period of relative stability we can no longer take secure and affordable energy supplies for granted.

We see the rising demand for energy imports from an increasing number of countries, declining production from the mature hydrocarbon reserves in Europe and America, the pressing challenge of tackling climate change, and the high and volatile energy prices that are a combination of more than a decade of underinvestment in many producing areas as well as increasing geopolitical complexities and risks surrounding energy supply and transportation. Security of energy supply is at the top of the political and business agenda.

Within the EU, there is a growing consensus on the importance and advantages of our 27 Member States' working together. The energy package proposed by the Commission in January and endorsed at the European Council in March has established a clear action plan to start tackling these challenges - both internally and externally.

Internally, this includes the achievement of a genuine EU-wide internal energy market; plans to link up Member States' energy infrastructure; increasing the solidarity over national oil stocks and examining options for increasing gas security, improvement of energy efficiency by 20% by 2020, a binding overall EU target of 20% of renewable energy by 2020, a binding minimum target of 10% of biofuels in the transport sector by 2020 and the development of a European Strategic Energy Technology Plan.

These are internal measures that the EU itself can take by itself. Nevertheless, our demand for fossil fuels is likely to continue to grow, and these resources will increasingly have to be supplied by countries outside the EU.

However, we have to recognise that this carries certain additional technical and political risks - risks such as disruptions in supplies caused by technical problems with pipelines resulting from a lack of sufficient maintenance or investment, specific adverse climatic conditions or the increasing threat of terrorism. There are also concerns in many major consumer countries that, in the current market conditions, supplier countries may try to use their market power in an uncompetitive or even political manner.

These concerns need to be addressed in a pragmatic way. Our relationships in the energy sector are and must remain mutually beneficial. The energy that the EU for example buys from producer countries contributes very significantly to their economic growth and the improved living conditions of their populations. In turn, the stable flow of reasonably priced energy remains an important motor for Europe's economic growth.

At the EU level, there has been a clear focus over the past year on developing a focused external energy security policy as an integral part of the EU's foreign policy. This was confirmed at the March European Council, which defined an action plan to 2009 that prioritises consumer-to-producer as well as consumer-to-consumer and consumer-to-transit countries dialogues and partnerships. This is where the International Energy Forum has an important role to play: to remind producer, consumer and transit countries that they all have a common interest in a non-discriminatory and competitive world energy market.

Facilitating objective discussions on issues of concern and encouraging all participants to recognise the commonality of their interests is the most effective way of ensuring global energy security and of underpinning global economic growth. This, combined with a proactive approach to the post-20l2 negotiations on climate change, is the cornerstone to ensuring global energy sustainability.

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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.

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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.

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H.E. Erik Solheim, Minister for International Development of Norway since September 2005, underscores in this special article from the Ministers' Rostrum the importance of the petroleum sector for developing countries. He presents Norway's "Oil for Development" programme that focuses on good governance, transparency and anti-corruption with regard to resource and revenue management as well as environmental protection. He reconfirms Norway's strong support to the Joint Oil Data Initiative managed by the IEF Secretariat.

Norway has, within the "Oil for Development" programme provided the Secretariat with a special financial grant to promote JODI among developing countries, additional to Norway's generous annual financial contributions to Secretariat activities. Norway co-sponsored the Regional JODI Training Workshop organized by the IEF Secretariat and the Ministry of Minerals and Energy of South Africa in Johannesburg 30 January to 2 February this year.

Mr. Solheim has long played a prominent role in Norwegian politics and was the leader of the Socialist Left Party from 1987-1997. He is internationally known for his role as peace facilitator in Sri Lanka.

Energy security, climate change, government transparency, corruption and prosperity are words all closely linked with oil - for good and for bad. As a Minister for International Development, I am concerned, but also optimistic, about the increasing shift of investments that we see in the petroleum sector, from developed countries to some of the world's poorest countries. Facing the challenges of good governance, corruption and wealth creation becomes more important than ever. Environmental degradation is yet another consequence of corrupt systems, contrary to environmental protection being a result of good governance. In the 1960s, international oil companies came to Norway with many "good offers" for extracting Norway's oil resources, one was to take on exclusive rights to our entire continental shelf. Jens Evensen, a key government official, wisely responded: "We understand you are interested in exploring for oil in the North Sea. We hold the rights to this and we do not intend to grant any license before we know what we are doing. We quite simply give you a challenge: Educate us!" I am deeply honoured by the many governments now seeking our advice. Norway has a responsibility to share its experience.

Norway's "Oil for Development" programme was launched focusing on good governance, transparency and anti-corruption. The initiative builds on three main thematic pillars: resource management, revenue management and environmental protection. Cooperation under the initiative include several countries, one is Timor Leste, the world's youngest, and one of the poorest countries in the world. Lacking basic competence and government structure, the securing of the petroleum revenues was at stake for Timor Leste, as it was for Norway 40 years ago. Support includes institution building, legal framework, petroleum fund, transparent licensing system and education. Added revenues to the East Timor nation of more than USD 10 billion over the next 20 years have been secured through tough negotiations with neighbouring countries. The Oil for Development team provided support to this, as it did in securing the legal framework to pass Parliament in 2005. The "sustainable" income from the established Petroleum Fund (reached USD 1 billion) will from this year be available to the benefit of the young nation. The 1st offshore license round has been successfully completed in a transparent process. The first Timor Leste students supported by the initiative will graduate from universities next year. Oil for Development has become a pillar of Norway's development work. I am convinced that this initiative - together with others - will give sufficient impact to make the petroleum industry more transparent and environmentally sustainable. I will mention three such initiatives supported by Norway and also highlighted at the G8 summits at Gleneagles and St. Petersburg.

Three Initiatives

The Joint Oil Data Initiative (JODI) has proved an important tool for establishing more transparent and reliable oil statistics. My compliments to the Secretariat of the International Energy Forum, co-ordinating the initiative, today with more than 90 countries providing data, and with the recent successful training workshop for officials from sub-Saharan African developing countries in Johannesburg, which Norway was happy to co-sponsor.

The Extractive Industries Transparency Initiative - EITI launched by British Prime Minister Tony Blair at the 2002 Johannesburg Summit, supports improved governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining. I am proud to accept to host the EITI Secretariat for the next period, following the UK.

The Global Gas Flaring Reduction Initiative (GGFR) was launched by the World Bank and Norway, also at the Johannesburg Summit. Most of the gas flared today - 85% - is flared in developing countries. This equals 25% of the US gas consumption!

Norway will take active part when Ministers meet at the 15th Session of the United Nations Commission on Sustainable Development in New York in May to further discuss some of these most important challenges that the world is facing.

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