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Opening Remarks

24 May 2006

Riyadh, Saudi Arabia

The IEF Secretariat is honoured to host this regional presentation of the World Energy Council's Energy Policy Scenarios to 2050. Hopefully some of us will still be alive and kicking at that point in time to see how accurate or inaccurate the Scenarios suggested today will prove to be. Whether these scenarios are good or bad, it is, I think, important to note the words of a German scientist who said that 'trends and scenarios are not destiny, unless man chooses to make them so'. And we have sitting around this table senior Government energy officials, Ambassadors and other diplomats as well as representatives of industry and media, who have a measure of influence on future developments. 

If the IEF Secretariat is but a Kid on the Global Energy Block, the World Energy Council is a Great-Grandfather on the Block, established in 1923. The Council covers all forms of energy. It has over 90 member countries and is an active supporter of the International Energy Forum and Secretariat activity. Secretary General Gerald Doucet gave a preview of the WEC's work on long term energy scenarios in the January issue of the IEF Secretariat's newsletter, a copy of which was attached to the letter of invitation to this meeting.

Energy security concerns and uncertainties of the day are at the top of the political agenda world-wide. Not only for Energy Ministers. Presidents and Prime Ministers, Foreign Ministers, Finance Ministers and also Environment and Development Co-operation Ministers are addressing the issue as well. 

Energy will remain a government concern worldwide, because of its importance for economic and social development in each and every country. Energy also affects commercial and political relations between countries. It fuels the world economy and impacts the environment. Energy influences international politics and international politics influence energy developments. Energy goes to the core of national and global interests in an increasingly interdependent world. Energy is, indeed, a defining issue of this new Century. Crucial to meeting our Millennium Development Goals. 

Energy security is a concern not only in a short-term crisis perspective, but also in a long-term perspective as production and consumption patterns as well as requirements for investments in energy infrastructure evolve. In a word, the World will need more and cleaner energy used in a more efficient way, accessible and affordable to a larger share of the world's population. The challenge lies in operationalising this imperative in a fair and sustainable way.

Unique political level dialogue 

Let me say a few words on the IEF Ministerial meeting in Doha last month and our flagship activity - the Joint Oil Data Initiative.

The political level dialogue in the IEF gathers under one global umbrella Ministers not only of the major energy importing countries of the IEA and Ministers of the major petroleum exporting countries of OPEC, but also Ministers of key energy producing and consuming countries that are not members of these organisations. Countries such as Russia, China and India to name a few that will increasingly impact the global energy, economic, environmental and political scenario in a globalising and increasingly interdependent world.

The 10th IEF Ministerial meeting took place in Doha last month. Fifty-nine countries and six international organisations took part. A unique gathering of energy ministers across political, economic and energy policy dividing lines. They focused on global energy security and the links between energy, environment and economic development. In addition to their informal plenary discussions and bilateral meetings, Ministers also interacted with CEOs of leading national and international energy companies in the 2nd International Energy Business Forum. 

Oil key concern

It goes without saying that oil was key in the Doha discussions on energy security. Ministers noted that world economic growth remained strong despite increasing oil prices and market volatility. But they expressed concern over effects of sustained high price levels on the world economy, and especially on developing countries. Ministers confirmed their shared interest in reduced market volatility and prices at reasonable levels for both consumers and producers. They noted increasing producer and consumer interdependencies.

They attributed current higher oil prices to a number of factors, including increasing demand, tight up- and down-stream capacities, intervention of non-industrial actors and geo-political developments, which contribute to increased anxiety in the market. 

Ministers underlined the importance of strengthening dialogue and co-operation not only between governments, but also between governments and industry with a view to ensuring reliability, security and affordability of energy. They called for a stepping up of investments across the energy chain to meet the substantial increase in demand required for global economic growth and social development in the years ahead.

The consensus is that the world will continue to rely strongly on fossil fuels, oil, natural gas and coal, supplies of which are ample. Ministers thus underlined the need to accelerate the development of cleaner fossil fuel technologies and alternative sources of energy and to increase energy efficiency. 

Ministers underscored that improved access to markets, resources, technology and financial services, bolstered by fair and transparent economic fiscal and legal regulatory frameworks, and by good governance, is crucial for the long-term energy security of both consumers and producers. 

Road maps and scenarios 

Both in Doha and at the inauguration of our headquarter premises in Riyadh in November last year, Ministers of some oil-consuming countries requested a 'road map' from oil-producing countries on future supply. And Ministers of some oil-producing countries requested in turn a 'road map' on future oil demand from the oil-consuming countries. Road maps are not always easy to make, and even when made can sometimes prove difficult to follow, if not deemed irrelevant. But the realistic road maps that are possible to chart for energy security, could give some guidance for the investment decisions needed to secure adequate energy supplies. And here, scenarios, such as those produced by the WEC, give important input to government planning and policy decision-making.

In this regard, Ministers underscored the need to bring together and share work from various co-operative fora, such as the IEA and OPEC other organisations as well as from the regional dialogues now taking place. A joint analysis on world demand under the umbrella of the IEF, workshops and studies on bottlenecks in the energy supply chain, impediments to investments, the role of financial markets, reserves transparency and energy poverty were among the activities proposed. We are looking forward to continue interaction with the WEC to benefit from the interesting work they are doing. 

Flagship Activity

IEF Ministers have underlined on repeated occasions the importance of transparency and exchange of data for market predictability and thus for the investments required to enhance energy security. Again at the IEF Ministerial in Doha last month, they reconfirmed their support of the Joint Oil Data Initiative - JODI for short - as did G8 Energy Ministers in Moscow in March and G8 Heads of Government at their Summit in Gleneagles last year. Some Ministers are even urging an expansion of the initiative to include, in due course, also other sources of energy that are important in the world energy mix.

JODI is a concrete outcome and achievement of the producer consumer dialogue. Co-ordination of this unique inter-organisational initiative is a flagship Secretariat activity, fully supported by the six international organisations that have pioneered the Initiative: the IEA and OPEC, APEC, Eurostat, OLADE and the UNSD.

The IEF Secretariat hosted with the UN and our other partner organisations a side-event presentation of JODI at the 14th UN Commission on Sustainable Development in New York two weeks ago. We were honoured to have Deputy Minister of Petroleum and Energy of Norway and Secretary General of AFREC, the African Energy Commission, as keynote speakers. We are grateful for the financial support earmarked for JODI that Germany, the Netherlands, Norway and the UK have given over and above their annual financial contributions to Secretariat activity. 

More than 90 countries, representing more than 90% of global oil supply and demand, are now submitting data to JODI. The data cover production, demand and stocks of seven product categories: crude oil, LPG, gasoline, kerosene, diesel oil, fuel oil and total oil. For many countries, especially the top 30 producers and consumers, timeliness, coverage and reliability are already at reasonable levels. 

The World Database of the Joint Oil Data Initiative was released to the public by the Custodian of the Two Holy Mosques, King Abdullah ibn Abdulaziz in the presence of Ministers of key energy producing and consuming countries on occasion of the inauguration of our Secretariat headquarters in November last year. On the back page of the special brochure on JODI presented at the Doha Ministerial, that we have distributed, you will see a chart with smiling, neutral and grumpy faces for each country participating in JODI. These faces indicate the JODI partners' degree of satisfaction with each individual country with regard to the submission, timeliness and completeness of their data. 

The Secretariat will host the 6th JODI Conference in Riyadh in November this year. It will be a good opportunity to take stock. To help enhance the quality of data, the Secretariat will also facilitate JODI training sessions in Africa and Latin America in co-operation with IEF countries and regional organisations directly concerned.

JODI is international ambition translated into action. Its objective is improving the quality and transparency of international oil statistics. It is promising work in progress with great potential. The submission of timely and accurate data by participating countries is crucial for its success.

Arab energy ambition

The Secretariat is happy to host today's regional presentation of the WEC's Energy Policy Scenarios not least in light of the global impact that energy developments in the Middle East will continue to have globally and the importance attached to these developments in the political level dialogue in the International Energy Forum.

The 8th Conference of Arab Energy Ministers took place in Amman, Jordan just last week. That regional gathering left no doubt about a more forceful Arab energy ambition. King Abdullah of host country Jordan called for the establishment of an Arab institutional framework for oil and energy issues in order to develop a pan-Arab perspective. Secretary General Doucet presented the WEC's Energy Policy Scenarios as a side-event at the Conference. And I had the opportunity to share some perspectives on the role of the IEF and importance of producer-consumer dialogue in efforts to reduce oil market volatility and increase global energy security.

Some of you attended the presentation of the Internal Energy Agency's World Energy Outlook for 2005 at our Headquarters in November last year. The Chief Economist of the IEA gave on that occasion a special presentation of the Agency's 'Middle East and North Africa Insights'. The IEA study projects that global energy demand will grow by 52% to year 2030, even with recent higher oil price levels. It notes that the countries of the Middle East and North Africa have the potential to play an increasingly important role in the world's energy future. The region holds 61% of the world's proven oil reserves and 45% of its gas reserves. The region's share of global production is, however, much lower: only 35% for oil and 15% for natural gas in 2004. 

With these words of welcome, and before Secretary General Doucet's key-note presentation, it is an honour and pleasure for me to request Dr. Majid Al-Moneef, Vice Chair of WEC Gulf States, OPEC Governor of Saudi Arabia and not least one of the founding fathers of the IEF Secretariat to make his introductory address.