The Organisation of Petroleum Exporting Countries (OPEC) on Monday pledged its support for the 1.1 billion people globally without access to modern energy sources and the 2.8 billion individuals who still cannot afford modern cooking systems worldwide.
Speaking at the fourth high-level meeting of the OPEC-China Energy Dialogue, which held via a video conference, the organisation’s Secretary-General, Dr. Sanusi Barkindo, said OPEC would continue to pursue affordable and reliable energy for all.
Barkindo was joined during the event by the Administrator of the National Energy Administration (NEA) of the People’s Republic of China, Zhang Jianhua, and the Permanent Representative and Ambassador Plenipotentiary and Extraordinary of the Permanent Mission of China to the United Nations and other International Organisations in Vienna, Wang Qun.
Barkindo added that the cartel recognises the important role the oil industry will play in ensuring the speedy distribution of the recently found Covid-19 vaccines since many of the medical supplies, surgical masks and respirators as well as other equipment essential in the fight against the pandemic come from petroleum-based products.
He said: “OPEC is unequivocal in its supports of the Sustainable Development Agenda, particularly SDG 7, which calls for access to affordable, reliable, sustainable and modern energy for all.
“We must never forget that 1.1 billion live in energy poverty and 2.8 billion people have no access to modern cooking systems. These issues were discussed at the 75th Session of the UN General Assembly and the First Annual SDG Moment, which was held on September 18, 2020.”
While recalling the crisis that engulfed the international oil market, particularly in April, he said the nadir of the challenge was on April 20, which he described as ‘Black Monday,’ when the WTI May contract went negative, ending the day at close to minus $40 per barrel.
He lamented that the Covid-19 pandemic has continued to wreak havoc globally, with more than 67 million people falling sick from the ailment, more than 1.5 million dead, followed by massive economic disruption, unemployment and threats to businesses.
Barkindo explained that the decisions, which were urgently taken by the OPEC members and allies, helped to rescue the market from collapsing and sought for the continued support of all stakeholders to weather the current storm in the global oil market.
He said: “To help counter the situation, OPEC and our DoC (Declaration of Cooperation) partners agreed at two extraordinary meetings on April 9 and 12 to new voluntary production adjustments, beginning with 9.7 mb/d, in May and June 2020, this was extended to July. Moreover, the tailored adjustments would also run two years until April 2022.
“These are the largest and longest in the history of OPEC and the oil industry. They were subsequently ‘tweaked’ at the 11th OPEC and non-OPEC ministerial meeting on 6 June, indicative of our flexibility and adaptability. We also agreed to a compensation mechanism for participating countries for underperformed volumes.
“Just last Thursday, December 3, 2020, at the 12th OPEC and Non-OPEC ministerial meeting, participating countries unanimously agreed to a further tweak of the DoC voluntary production adjustments.”
According to him, the OPEC-China Energy Dialogue, now in its 15th year, has intensified across a range of fronts, particularly on the technical level, affirming that the current global crisis requires a global response.
He thanked the Chinese President, Mr Xi Jinping, and noted that OPEC fully aligns with the Chinese leader’s thoughts on the required international response to Covid-19.
While acknowledging the important role China will play over the coming decades, he explained that OPEC has already forecast China’s economic growth at 2.0 per cent for 2020 and 6.9 per cent in 2021.
“The global economy is expected to more than double from 2019 to 2045. While China accounted for 19 per cent of global GDP in 2019, this amount is projected to reach a whopping 24 per cent by 2045.
“World oil demand is to rise from 99.7 mb/d in 2019 to 109.1 mb/d in 2045. Accordingly, China’s demand for oil is set to rise from 13.1 mb/d in 2019 to 17.1 mb/d in 2045, or by 4 mb/d.
“Your great country became the world’s biggest importer of crude oil in 2017, overtaking the US. In 2019, almost 70 per cent of OPEC crude exports went to the Asia Pacific region. A large portion of these exports goes to China.
“The percentage of oil in China’s fuel share in the energy mix is also expected to remain stable between 2019 and 2045, at 19 per cent. This means that although China has been making great leaps and bounds in the field of renewables, the need for oil will remain significant,” Barkindo stated.