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OPEC warns against calls to discontinue oil, gas investments

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OPEC Secretary-General, Mr. Mohammed Sanusi Barkindo has warned aginst any position by the world to discontinue investments in oil and gas.

Barkindo said this in his virtual honorary chairman keynote address at the Nigerian Oil and Gas conference in Abuja.

Speaking on the theme: “Global oil market dynamics in a decarbonising world,” Barkindo described the development of renewables energies as a welcome development.

According to him, in the past years there had been headlines over the uncertainty and volatility that the COVID-19 pandemic has brought in relations to climate change and energy transition.

He said, consequently, countries were attempting to adapt to the rapidly-changing dynamics in the energy industry in an effort to adapt and mitigate the impacts of climate change.

Barkindo said “investors, environmental lobbyists and even some corporate boards are pressuring oil companies and governments to pursue radical policies and initiatives that could, in the end, be more disruptive than productive for the global energy industry’’.

“There have recently even been calls for investments in oil and gas to be discontinued, which is a dangerous and unrealistic scenario,” Barkindo said.

Read Also: OPEC: Oil demand to grow by 6mb/d in 2021

He added that these voices have emerged particularly in the context of the net-zero 2050 emissions discussions.

The SG submitted that the fact is, however, that oil and gas have an important role to play in the energy transition.

Cautioning against the discontinuation of investment in the industry, Barkindo said: “Let me be clear, OPEC supports the need to reduce  emissions, bolster efficiency and embrace  innovation, but we must be aware of the risk we run of not adequately investing in the future of this industry.

“We are already dealing with the harsh impacts the COVID-19 pandemic has had on investment, which declined by 30 per cent in 2020.

“If this were to continue, we could see demand exceed supply, posing a significant energy security risk to both producers and consumers.”

But, according to him, achieving net zero emissions by 2050 is already a great challenge for advanced economies, some of whom have expressed their doubts about the reality of achieving this ambitious goal.

He said for developing nations, it is even that much more daunting, particularly as they are occupied with ensuring their basic needs are met day in and day out.

Every day, he said, is a challenge to simply put food on the table and earn a decent living wage.

The OPEC boss noted that there are emerging doubts as to how realistic the net-zero approach is, particularly when considering the

unique circumstances of developing countries, especially in combatting another scourge, namely energy poverty.

Barkindo submitted that “out of the three significant challenges to  achieving net-zero emissions by 2050, namely scale and timing, supply chains and the developing  world.

“In terms of scale and timing, the 28-year period from now until 2050 is not adequate to achieve net- zero emissions, considering the scale of investments required, the availability of land, the required massive expansion of the electricity grid and a host of nearly 400 milestones that would need to be reached to achieve the net-zero goal.

“The last transition took nearly 200 years to cycle through, and now we want to achieve an even more ambitious transition in less than 30 years! “This is simply not realistic.

THE NATION

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