I would like to present a "New Kid on the Global Energy Block". An international secretariat headquartered in Saudi Arabia. Its mission to facilitate and promote on a continuous basis the informal global energy dialogue at the level Ministers that takes place in the International Energy Forum. This political level dialogue stems back to an initiative by Norway's then Prime Minister Dr. Brundtland in the late 1980's. IEF ministerial meetings have focused on security of energy supply and demand, as well as on the links between energy, environment and economic development.
The 9th IEF Ministerial took place in Amsterdam 22-24 May. Sixty three countries and eleven international organisations participated. "Investing in Energy" was the main theme. The immediate backdrop for Ministers was high oil prices and energy security concerns. The longer-term backdrop was the substantial increase in global energy demand foreseen in the years ahead, an add-on of two-thirds of today's level by the year 2030, with most of the increase in demand coming in the developing countries. The current assessment is that total investments of USD 16 trillion are required for the energy supply infrastructure needed to satisfy expected demand in 2030.
For the first time, an International Energy Business Forum took place preceding the ministerial. Here ministers and top officials of leading energy companies and financial institutions had the opportunity to exchange views on the theme of investments.
Let me briefly mention the political background for the International Energy Forum as well as its unique character.
A necessary dialogue on energy
The need for dialogue is straightforward. 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 impacts the global environment. Energy influences, and is influenced by, international politics. A global dialogue on energy is necessary, because energy is a global issue.
The past has shown how energy, especially the strategic commodity oil, and excessive market volatility, can create conflict or exacerbate existing political tensions between countries or groups of countries. The producer-consumer dialogue in the IEF has contributed to better mutual understanding and to convergence of views. Greater stability and predictability in energy prices and developments are seen as a shared goal that can facilitate long-term economic planning and have positive impact on political developments as well. The mutual sense of interdependency, vulnerability and win-win opportunity has improved the atmosphere for long-term co-operation. And difficult short-term issues are being addressed in a more co-operative way.
The producer-consumer dialogue at political level in the IEF is unique in its global participation and perspective. It involves not only ministers of IEA and OPEC countries, but also ministers of important countries outside these two main producer and consumer organisations; China, Russia, India, Brazil and South Africa to name a few, that will increasingly impact the global energy scenario. In the IEF, these and other countries participate on an equal footing with their peers in the IEA and OPEC. In addition to the plenary discussions, the IEF offers a unique opportunity for bilateral meetings.
The IEF is unique also in approach. Ministers come to the IEF to discuss common concerns, to exchange information and policy views. And to look for consensus-oriented approaches to the energy challenges ahead. The IEF is not a decision-making organisation. Nor is it a place for negotiating legally binding settlements and collective action. Decisions are made in capitals and in international organisations that are mandated for decision-making.
At the Amsterdam Forum, Ministers expressed concern about the prevailing high oil prices. These were seen as the result of unanticipated strong demand, tight capacities up- and downstream as well as geopolitical uncertainties. Economic recovery worldwide, especially in developing countries, would benefit from stable oil prices at a reasonable level. Both producer and consumer countries had to take action to reach sustainable price levels.
Security of oil and gas supply was not seen to be in danger. Ministers welcomed the foreseen increase in production and considered present oil and gas reserves sufficient to meet the world's increasing energy needs in the coming decades, provided that necessary investments to develop these resources are done in time.
Unhindered access to capital, energy technology and markets was advocated for development of production, transit and transport capacity. The sovereign rights of states over their natural resources were reaffirmed and the commercial objectives of oil and gas companies were recognised.
They echoed the strong messages from the 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 financial resources. Bilateral and multilateral investment agreements could help clarify conditions and thus facilitate the mobilization of investments. Transparency also with respect to oil production and stocks was seen as important to attract investments.
Ministers underscored the importance of investments in cleaner fossil fuels and in reduction of detrimental effects of growing energy use. The importance of developing alternative energy sources was stressed. The Forum favoured 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 and follow-up of the Johannesburg Summit was also emphasized, especially bearing in mind the energy needs of a growing world population.
New International Secretariat
The biannual meetings at the level of Ministers will remain the main event of the IEF and focus of the Secretariat. Support to host country Qatar and their co-hosts China and Italy of the next IEF in 2006 will be our cardinal task.
The Secretariat will help to ensure the continuity of the energy dialogue also between the biannual meetings by organising supportive seminars and roundtables at political and officials' level. Energy security and stability along with the interrelationship between energy, technology, the environment and economic growth will be the prominent perspective.
The Secretariat will also contribute to enhanced data collection and transparency and is now discussing with six organisations - APEC, Eurostat, IEA, OLADE, OPEC and the UN - what role we might play in co-ordinating the Joint Oil Data Initiative (JODI) that they are developing.
In addition to confirming political support to the Secretariat, several Ministers made specific proposals for regional or inter-regional meetings to deepen the global dialogue. We are now following up these proposals. Regional and inter-regional activities are crucial links to our global dialogue endeavour.
The Secretariat will co-chair with Russian authorities a special roundtable for ministers and industry on the "Eurasian Dimension of the Global Energy Dialogue" as part of the 4th Russia Oil and Gas Week in Moscow in October.
Earlier this year, we hosted in Riyadh the first EUROGULF workshop on energy stability and sustainability. We will consider further contribution to this inter-regional project on EU-GCC energy relations.
As further follow-up to proposals from Ministers, we are also considering inter-regional meetings within the IEF framework between Asian consumer countries and Middle East producers. Dialogue between these two regions will assume increasing importance for the global dialogue as Asian energy demand surges in the years ahead affecting the global market scenario as well.
Other proposals from ministers included a request for the Secretariat to assist in a preparatory roundtable for the next inter-regional conference of African, Latin American and Caribbean energy ministers, to give special attention to the expected development of regional markets for natural gas to a global market place as well as to transit issues. And the Secretariat was invited to interact with the newly established UN-Energy task force in the follow-up of the Johannesburg Summit in 2002 and preparing for UNCSD focus on energy in 2006 and 2007.
The International Energy Forum is an evolving international endeavour to promote global dialogue on energy at the political level. Energy security and stability are core objectives. The IEF is driven by governments at ministerial level and recognises the need for interaction also with other stakeholders, not least the energy industry itself.