OPEC’s top official urged countries to invest much more in oil to meet the world’s future energy needs and said climate policies must be more “balanced and fair”.
“It is imperative that all parties involved in the ongoing climate negotiations pause for a moment; Look at the big picture,” Haitham Al-Ghais, secretary-general of the Organization of the Petroleum Exporting Countries, told an energy conference in Cairo on Sunday. They must “work towards an energy transition that is orderly, inclusive and help ensure energy security for everyone.”
His comments came amid a shift between some Western governments and companies over fossil fuels. Oil, natural gas and coal prices rose after Russia’s invasion of Ukraine last February, putting energy security at the top of many leaders’ agendas.
US President Joe Biden went off script during his State of the Union address last week, saying: “We’re going to need oil for at least another decade.” In Europe, Shell Plc signaled it will stop accelerating spending on renewable energy, while BP Plc slowed its planned reduction in oil and gas output.
OPEC’s Al-Ghais said the oil industry had been “affected by several years of chronic underinvestment”. It needs investment of $500 billion a year until 2045, he said.
The UAE’s hosting of the COP28 climate summit in late 2023 “will serve as a new opportunity to explore inclusive, sustainable and consensus-based solutions to climate change,” said the secretary-general, who is a member of Kuwait OPEC.
The United Arab Emirates, also part of OPEC, has named Sultan Al Jaber, head of the national oil and gas firm Adnoc, as chairman of the summit. Although this has caused some controversy, Al Jaber has said that hydrocarbon producers must be at the forefront of climate talks if the world is to transition to cleaner energy while ensuring that prices of fuels remain affordable.
Al Ghais reiterated that OPEC and its partners, known as OPEC+, the 23-nation alliance led by Saudi Arabia and Russia, are committed to keeping the oil market stable.
Saudi Arabia and other key OPEC members are unlikely to respond to Russia’s announcement Friday of a production cut by pumping more, Bloomberg reported.
Although Moscow signaled late last year that it might cut output in retaliation against Western sanctions, crude prices still jumped on Friday. Brent extended its weekly gain to 8.1%, closing at $86.90 a barrel.
