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The Role of the International Energy Forum

19 May 2006

Oslo, Norway

It is an honour for me to highlight the global, political level producer-consumer dialogue in the International Energy Forum at this 4th OPEC - IEA Workshop. 'Global Oil Demand' is certainly a timely theme. At a time of heightened global energy consciousness, it is important that OPEC and IEA, the two major producer and consumer organizations, address the outlook for, and uncertainties related to, oil demand. Not only on their own, but also jointly, as today, with prominent experts from governments, industry and institutions. And not least hosted by Norway. An industrialized country participating in the IEA with her main political and trading partners. And a major petroleum-exporting country sharing important interests also with other petroleum-exporting countries in and outside of OPEC. 

In addition to their direct bilateral co-operation, I am happy to see the IEA and OPEC Secretariats and their member countries taking active part in the broader producer-consumer dialogue in the IEF. A political level dialogue that 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 outside your organizations. Countries such as Russia, China and India to name a few, that will increasingly impact the global energy, economic, environmental and indeed political scenario in an increasingly interdependent world.

Top of the Political Agenda

For our three Secretariats, the last few months can leave no doubt that energy security is at the top of the political agenda world-wide. National policies are being tuned to energy security uncertainties of the day and challenges of the future. And the tuning of policies of one country to uncertainties can in itself create new energy uncertainties for others. 

In March, Secretary General Muhammed Barkindo, Executive Director Claude Mandil and myself had the opportunity to bring our perspectives to the meeting of G8 Energy Ministers in Moscow. This followed the emphasis on energy and dialogue put by G8 Heads of Government at their Gleneagles Summit last July. And Energy Security is, as you know, the priority issue for the Russian presidency this year. 

In April, we contributed to the 10th IEF Ministerial in Doha. Fifty-nine countries and six international organisations took part. A unique gathering of energy ministers across political, economic and energy policy dividing lines and groups. 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. 

A week ago, it was New York, the 14th UN Commission on Sustainable Development, which this year and next is addressing energy. The Commission recognizes the importance of energy for efforts to reach the Millennium Development Goals. Our host for the 10th IEF Ministerial, the Second Deputy Prime Minister, Minister of Energy and Industry of Qatar, was elected new Chairman of the Commission, which now enters its energy policy making phase and where also Ministers of Environment and Development Co-operation are prominent in setting the agenda.

Mr. Mandil and Mr. Barkindo and I have just come in from Amman, where we attended the 8th Conference of Arab Energy Ministers. A gathering, which 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. 

In my remarks today, I would like to focus briefly on three things. 10th The IEF Ministerial a few weeks ago. The Joint Oil Data Initiative and, thirdly, the trend towards strengthened regional and inter-regional energy co-operation.

From Confrontation to Dialogue

But before that, let me note the simple and encouraging fact that this workshop is taking place. That there now are open channels and institutional co-operation between OPEC and the IEA. We remember a recent past when energy, especially the strategic commodity oil, and market volatility created conflict and exacerbated political tensions between countries and groups of countries. An image of confrontation developed between producers and consumers of petroleum. A time, when there was no institutional contact between your major producer and consumer organizations. OPEC and the IEA were seen as the bi-polar and multilateral expression of permanently conflicting producer-consumer interests.

This is easy to forget, when we today see the Executive Director of the IEA and the Secretary General of OPEC sitting happily and co-operatively on the same panel at international conferences and also arranging this 4th Joint Workshop. 

Doha Energy Road Map

It goes without saying that oil was key when Ministers discussed energy security in Doha last month. They noted that world economic growth had 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 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.

Both in Doha and at the inauguration of our headquarter premises in Riyadh in November last year, some Ministers of oil-consuming countries requested a 'road map' from oil-producing countries on future supply. And some Ministers of 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. 

Data and transparency

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 Gleneagles. In Doha, some Ministers even urged an expansion of the initiative, in due course, to include 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-organizational initiative is a flagship Secretariat activity, supported by the six international organizations 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 organizations a side-event presentation of JODI at the 14th UN Commission on Sustainable Development ten days ago. We were honoured to have Deputy Minister of Petroleum and Energy Anita Utseth as keynote speaker. We are grateful for the financial support earmarked for JODI that Norway, Germany, the UK and the Netherlands have given over and above their annual financial contribution 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 King Abdullah of Saudi Arabia 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. 

JODI is international ambition translated into action with the objective of 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. 

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 organizations directly concerned. 

Multi-polar energy world

At a time of heightened energy security concern around the world, we are witnessing a strengthening of regional and inter-regional energy co-operation. I think this will be increasingly reflected in institutional developments. Parallel processes of global and regional co-operation are important to energy security in a multi-polar energy world. The IEF provides a global meeting point for the mosaic of regional and inter-regional energy ambition and co-operative designs. 

The Secretariat is interacting with several such regional and inter-regional energy processes. I would like to mention here a very important one, considering how regional Asian developments will increasingly impact global developments, and not least considering the prospects of substantially increasing Asian oil demand. The Roundtables of Asian Ministers on 'Regional Co-operation in the Oil and Gas Economy' initiated by India in January last year in association with the IEF Secretariat and with Kuwait as co-host gathered Ministers of the principal Asian importers and West Asian (Gulf) producers. An impressive gathering of Ministers representing half of the World's population, the bulk of the World's remaining proven oil and gas reserves and, very importantly, the greater part of the surging global energy demand expected in the decades ahead. They met to discuss issues of energy security, stability and sustainability for the first time on a regional Asian basis. This Roundtable was supplemented by an additional one of Ministers of the principal Asian consumers and North and Central Asian producers in November last year, again convened by India and this time co-hosted by Russia. 

Ministers recognized very importantly at both Asian Roundtables that the Asian oil economy is integral to, and inseparable from, the global oil economy. Asian Roundtables will follow in Saudi Arabia, co-hosted by Japan and in Turkey, co-hosted by Azerbaijan respectively. 

One of the things underscored by Ministers at the 10th IEF in Doha was the need to bring together and share work from various co-operative fora such as the IEA and OPEC and the regional dialogues. 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. 

The IEF Secretariat is looking forward to interacting with OPEC and the IEA separately and jointly on these and other issues as we now prepare for the next IEF Ministerial that Italy will host in 2008.