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A Time for Africa in the Global Energy Dialogue

24 September 2005

Johannesburg, South Africa

Oil prices are in the headlines. They have been there for some time now. Energy security is again high on the political agenda. Government leaders are concerned. Oil importing, industrialised countries warn of the detrimental impact that high oil prices have on their individual economies and on the world economy. Oil-importing developing countries suffer even more than before from increasing oil import bills. Oil-exporting countries are producing what they can to help bring prices down. And making good money doing so. Surging demand in Asia, economic recovery, refinery bottlenecks as well as terrorist attacks and political uncertainties, and lately also hurricanes, are driving factors behind the higher oil prices that we have today.

If this shorter-term perspective is challenging, the longer-term scenario is even more daunting, not least for Africa. The increase in global energy demand foreseen in the years ahead is substantial. Most of this increase will come in the developing countries as they industrialise and their economies grow. In this longer-term perspective, production and consumption patterns, the energy mix as well as investment requirements, will evolve in a changing geopolitical environment. And these energy developments will influence that changing geopolitical climate.

I am honoured for the opportunity to share some perspectives on the need for a global dialogue on energy and highlight the contribution of the International Energy Forum at this Caucus Meeting of African Energy Ministers. And what better place to do this than in South Africa. South Africa brought the African dimension of the global energy dialogue to a fore when hosting the Sixth IEF Ministerial Meeting in 1998. South Africa is continuing its support of the IEF as a member of the Secretariat's Executive Board. And South Africa is again center stage next week hosting the 18th World Petroleum Congress. 

A time for dialogue

Twenty-five years from now, global energy demand is expected to be two-thirds higher than it is today. 85% of that increase will be met by fossil fuels. Total investments of USD 16 trillion are required for the energy supply infrastructure needed to satisfy global demand the next 25 years. Today, a quarter of the world's population (1.6 billion of 6.2 billion people) lacks access to electricity and two-fifths rely mainly on traditional biomass for their basic energy needs. In 2030, we expect that 1.4 billion out of the world's 8.1 billion people will still lack access to electricity. 

The bottom line is that world will need more and cleaner energy used in a more efficient way. It should be accessible and affordable to a larger share of the world's population, and that means not least to you in Africa.

Energy is crucial for economic and social development in individual countries. Energy is important for commercial and political relations between countries. It fuels the world economy. Production and consumption of energy impact the global environment. Energy influences, and is influenced by, international politics. It is difficult to imagine an area, where nations are more interdependent than in the confluence of energy, environment and economic development.

Clearly, this is a time for global energy dialogue. And a time for Africa in that dialogue. Global energy developments affect Africa and should therefore also be influenced by Africa. African perspectives are important as we prepare for the 10th IEF Ministerial in Doha, Qatar on 22-24 April 2006. African Ministers will have an opportunity to voice their interests and concerns in dialogue with their fellow ministers from abroad. I am eager to hear an increasingly forceful African voice in the global energy dialogue. 

The International Energy Forum

The International Energy Forum provides a venue for global dialogue on energy at the level of Ministers. It is unique in its global perspective and participation. It gathers Ministers from the industrialised economies of the IEA, from the petroleum exporting countries of OPEC, and, very importantly, from energy producing and consuming countries outside these two main producer and consumer organizations. Countries such as Russia, China, India, Brazil and South Africa that will increasingly impact the global energy scenario. Other African ministers participate as well. 

The IEF is unique also in approach. Ministers discuss common concerns and look for consensus-oriented approaches to energy challenges ahead. The IEF is not a decision-making organisation or a place where Ministers negotiate legally binding settlements and collective action. Nor is the IEF a body for multilateral fixing of prices and production levels. Decisions are made on a national basis in capitals. 

IEF Ministerial meetings focus on energy security as well as the links between energy, environment and economic development. The series of Ministerial meetings that started in 1991 have contributed to a convergence of views and growing awareness of interdependence. The mutual sense of interdependence, vulnerability and win-win opportunity have improved the atmosphere for long-term co-operation. And difficult short-term issues are being addressed in a more co-operative way than before. 

From Amsterdam

At the 9th IEF, that took place in Amsterdam in May last year, Ministers voiced concern about the high oil prices. Then they worried about forty dollar oil. Today, prices are just below seventy. They agreed that economic recovery worldwide, especially in developing countries, would benefit from stable oil prices at a reasonable level. Both producer and consumer countries should take action to ensure sustainable price levels.

Ministers considered present oil and gas reserves sufficient to meet the world's increasing energy needs, provided that necessary investments are made in time. Unhindered access to capital, energy technology and markets would promote the development of production, transit and transport capacity. The sovereign rights of states over their natural resources were reaffirmed. The commercial objectives of oil and gas companies were recognized.

Ministers echoed the strong message from CEOs of leading energy companies, whom they interacted with in the preceding International Energy Business Forum, that stable and transparent economic, fiscal and legal frameworks need to be in place to attract sufficient foreign direct investment and other resources. Transparency also with respect to oil production and stocks was seen as important to that end. 

Ministers underscored the importance of investments in cleaner fossil fuels and of reducing the detrimental effects of growing energy use. The importance of developing alternative energy sources was stressed. Their vision was a smooth transition to a new energy era for the longer term, facilitated by the presence of still ample oil and gas reserves.

The importance of energy for sustainable development was also emphasized, especially bearing in mind the energy needs of a growing world population. 

To Doha

Energy Security is the theme of the 10th IEF in Doha. Host Country Qatar has started preparations for the Ministerial in concert with co-hosts China and Italy, members of the Secretariat's Executive Board, which includes South Africa, and the Secretariat itself. In addition, a wider Informal Support Group of countries, which includes South Africa are contributing to the development of themes and topics for the forthcoming Ministerial. 

Preparations also include consultations with industry itself in preparing the 2nd International Energy Business Forum, which will take place in conjunction with the 10th IEF proper. Input from the companies themselves is valuable to help determine and prioritize the key issues that should be put on the agenda. The Business Forum gives an opportunity for CEOs of leading companies and Ministers to interact and feed perspectives into the subsequent deliberations between Ministers. 

At both the IEF and IEBF, Ministers might want to target issues where common agreement and shared perspectives now are lacking and can be developed. And to reconfirm the body of shared perspectives from which the dialogue and co-operation can be further deepened. In addition to their eye towards the mid and longer term, Ministers have at the biannual Ministerials an opportunity to examine the immediate issues and concerns of the day. And time is also set aside for bilateral meetings.

Ministers may want to look more at constraints in the market and at what potential policy frameworks that would encourage efficient market operation. What can governments and business sector do to meet increasing energy demand and deal with excessive volatility in the market? What are the constraints and bottlenecks throughout the energy chain? How do we deal with them? The crucial issue of investments, the main theme of the last IEF, merits the on going attention of Ministers in their overall quest for energy security. 

New Kid on the Global Energy Block

A cardinal task for the IEF's international Secretariat in Riyadh in December 2003 is to support host country and co-hosts in preparing each forthcoming Ministerial and their follow-up. The Secretariat also helps to ensure the continuity of the ministerial level energy dialogue also between the biannual meetings by facilitating supportive meetings and roundtables in co-operation with governments and organisations. 

Let me come back to that after a few words on the third pillar of Secretariat activity. That is to contribute to enhanced oil data collection and transparency. IEF Ministers recognize that accurate and timely data are important to reduce market volatility. They have endorsed the Secretariat assuming a co-ordinating role in the Joint Oil Data Initiative (JODI). 

When the G8 Heads of Government in their statement from the Gleneagles Summit this summer emphasized the important role of the producer-consumer dialogue in the IEF, they urged all countries to contribute to the success of the Joint Oil Data Initiative.

JODI is now established as a permanent mechanism with the objective of improving the quality and transparency of international oil statistics. More than 90 countries, including African and representing 95% of global supply and demand, are now submitting data. We envisage a public release of the JODI World database in the near future. Let me use this opportunity to urge also African countries to contribute timely and accurate data to JODI. To help fulfil JODI expectations, we are planning together with our partner organisations to arrange training workshops in co-operation with interested African countries and energy organisations. 

JODI coordination is a flagship of our activity and will contribute to market stability and energy security. We are actively and fully supported by APEC, Eurostat, IEA, OLADE, OPEC and the UN, that have pioneered and developed the Initiative. 

Dialogues within the Dialogue

In February this year, I had the honour to speak on the global energy dialogue and present the IEF at the Second African Petroleum Congress that took place in Algiers under the auspices of the African Petroleum Producers' Association (APPA). African Ministers emphasized at the Congress the need to deepen African regional co-operation and integration in energy to enhance African energy security. 

Yesterday, I had the privilege of listening to your Senior Officials as they developed the recommendations on regional African co-operation and action. 

The global energy dialogue is definitely also about regional and inter-regional dialogue. Dialogues within the dialogue, so to speak. Both global and regional co-operation are important to global energy security in a multi-polar energy world. Regional approaches are needed because perspectives and immediate interests can vary between regions, however interdependent and woven together by shared global interests they are. Some regions have a diversity that also requires sub-regional perspectives. I remember the Executive Director of AFREC outlining in his speech at the Algiers Congress all of five energy regions here in Africa. 

The IEF Secretariat has been involved in several regional and interregional dialogue endeavours, some at the invitation of Ministers at their Amsterdam meeting last year, in support of, and as a link to, the overall global dialogue. 

India's Petroleum Minister hosted in New Delhi in January this year in association with the Secretariat and with Kuwait as co-hosting country a 'Roundtable of Asian Ministers on Regional Co-operation in the Oil and Gas Economy'. This was the first time that the ministers of principal oil and gas importing countries in East and South Asia and principal oil and gas exporting countries of West Asia (the Gulf countries) met on a regional basis. The backdrop was the surge in energy demand in Asia expected in the decades ahead and the fact that the bulk of the World's oil and gas reserves are located in West Asia. The Secretariat will facilitate a follow up Second Roundtable of Asian Energy Ministers, which will be hosted by Saudi Arabia and co-hosted by Japan.

At the request of the Energy Minister of Russia, we held a joint roundtable with Russian authorities on Eurasian energy co-operation last October. We are in contact with Mexico on preparations for your AFROLAC conference in Mexico in 2006. We were associated with the Eurogulf project between the European Commission and the Gulf Co-operation Council. The Secretariat hosted their first workshop in Riyadh last year. 

And today, we are here with you in Johannesburg in your regional African context, at this Caucus Meeting of African Ministers a few days before you open your doors to the World Petroleum Congress.

And in that global perspective, let me add that we will be interacting at the invitation of the United Nations with their efforts as the UN Commission on Sustainable Development focuses on energy in 2006 and 2007. 

In my view, the trend we see towards closer intra- and interregional co-operation will deepen and strengthen rather than detract from global co-operation. The Secretariat can play a useful role as a catalyst link between inter- and intra-regional dialogues on the one hand and the global dialogue in the IEF on the other. 

Indeed, in addition to the G8 Summit, several regional organizations, such as the EU and APEC and OPEC, have again in the past few weeks from high political level underscored the importance of the producer-consumer dialogue in the IEF in efforts to reduce present volatility in the oil market. 

Dialogue of the Interdependent

Let me conclude, Ministers, by emphasizing that the International Energy Forum is an evolving international endeavour driven by governments at your ministerial level. It provides a venue for Ministers of energy exporting and importing countries, of developing and industrialised countries, to put their concerns and policy views on the table and to listen to, and better understand, those of others. An informal dialogue of the interdependent, where Ministers can identify effective and sustainable ways of promoting global energy security across traditional political, economic and energy policy dividing lines. 

Let me wish this Caucus Meeting of African Energy Ministers success. The very event testifies to the desire to do so something about your African energy ambition. I am looking forward to that ambition being seen and heard in the global energy dialogue in the International Energy Forum as well.