The Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Haitham Al Ghaison, has disclosed that the global oil sector will require over $12 trillion in investment through to 2045.
Ghaison made this revelation at the 6th edition of the Nigeria International Energy Summit in Abuja, where he delivered his goodwill message virtually.
The disclosure comes amidst the recent move by some countries to limit or stop funding for new oil and gas projects, a decision that has stirred mixed reactions in the oil and gas industry. Ghaison stressed the need for policy-makers to take into account the national circumstances of developing countries in all actions, including such decisions.
According to him, “We should never forget that climate change and sustainable development are two sides of the same coin. The perspective of developing countries must be heard. The perspective of Africa must be heard. The perspective of the fuel poor must be heard.”
He added that even the best-intentioned policies can have unintended consequences, increasing the stakes in the ‘policy-design’ phase. If this phase is not robust and well thought-out, it can have lasting and damaging effects, including potential energy shortfalls and market volatility, as seen in recent years, which harm both producers and consumers.
Ghaison noted that investments pose one of the biggest unintended policy risks, particularly impactful on developing countries with oil and gas resources. Africa, for instance, has 120 billion barrels of proven oil reserves and 18 trillion standard cubic metres of natural gas. He stressed that for countries to properly utilize these resources for the benefit of their people, investment levels must be adequate while taking action to reduce the carbon footprint of the oil industry.
However, the movements by financial institutions to limit and stringently control how money is invested into fossil fuels under environmental, social, and governance (ESG) constraints impede the realization of this potential. This comes despite the fact that Africa accounts for only 3% of global greenhouse gas emissions.
“For our part, OPEC is determined to contribute to an investment-friendly environment by taking the actions necessary to encourage oil market stability under the ‘Declaration of Cooperation,” he said.
Ghaison’s message reiterated the need for policymakers to balance environmental concerns with economic growth, particularly in developing countries where oil and gas are critical sources of revenue.
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