The high-level Workshop was co-chaired by OPEC Secretary General, HE Mohammad Sanusi Barkindo, together with Mr. Joseph McMonigle, Secretary General of the IEF, and Keisuke Sadamori, Director of the Office for Energy Markets and Security at the IEA. The Workshop had over 110 participants.
In his opening remarks, HE Barkindo said "It is exactly these types of close collaboration that we will need to see more of in the weeks and months ahead as this industry continues to rise to the challenge of adapting to the paradigm shifts that are currently taking place."
The Secretary General reminded participants that there was but a little over a week until the highly anticipated United Nations Climate Change Conference (COP26) in Glasgow and that investment would be one of the deciding issues for the industry in the years ahead. He added that "oil and gas will continue to play an important role in world energy supply on the medium to long term" and that "Meeting these rising energy requirements will be dependent on a steady flow of industry investment", which would also be "essential to advancing innovation and technology that will be instrumental in further improving the environmental footprint and reducing emissions".
Mr. McMonigle raised concerns with respect to energy investment, noting that global demand is rebounding after the COVID-19 pandemic but private sector investment has yet to respond adequately. This could lead to price fluctuations that will impact market stability, and derail a sustainable and inclusive recovery from the pandemic, he noted. Complex physical and financial energy market dynamics are better understood, better regulated, and more transparent since the three organisations launched the dialogue in response to the Global Financial Crisis more than a decade ago. The discussions of the trilateral work programme today have offered greater insight into market dynamics and will help producers and consumers assess if more concerted action is warranted, he added.
Mr. Sadamori stressed that the world is not investing enough to meet its future energy needs. Transition-related spending has gradually picked-up, but remains far short of what is required to meet rising demand for energy services in a sustainable way. The amount currently spent on oil appears to be geared towards a world of stagnant or falling demand. A surge in spending on clean energy transitions provides the way forward, but this needs to happen quickly or global energy markets are likely to be volatile for years to come.
Sadamori added that "an effective and orderly transition will be critical - not only to reach international climate targets but also to prevent serious supply disruptions and destabilising price volatility along the way".
Discussions during the videoconference were structured into two sessions, focusing on financial markets, investment and the impact of the drive in ESG on the upstream oil industry.
The first session covered 'Investment opportunities in the oil industry in light of recent trends in the global economy and financial markets', which provided an overview of how investors across different asset classes are approaching investing in energy and how that translates into the outlook for oil markets. The second session delved further into the 'Impact of the accelerated drive towards ESG (Environment, Social, Governance) on investment in E&P activity'.
The Joint Workshop is one part of the trilateral work programme established by the three organizations and endorsed by energy ministers at the 12th International Energy Forum in Cancún, Mexico, in March 2010. Since then, the joint IEA-IEF-OPEC meetings covering the evolving inter-linkages between physical and financial energy markets have developed into a unique, high-level dialogue event that brings together a diverse range of market participants to discuss issues that are not addressed in other high-level fora. To encourage open and informative discussion, the Workshop was held under Chatham House Rule.
In conclusion, the three organizers thanked all the participants for their committed and forthright discussions on these crucial and timely issues, and looked forward to convening the next Joint Workshop in 2022.
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OPEC - Organization of the Petroleum Exporting Countries published this content on 21 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 October 2021 14:43:06 UTC.
