Outgoing Secretary General of the Organisation of Petroleum Exporting Countries (OPEC), Dr Sanusi Barkindo, has again warned against taking decisions on the current global energy transition based on emotions, rather than science.
Barkindo who spoke at the 21st Coordination Meeting on Climate Change which held via videoconference yesterday, stressed that even as talks on climate change continue, developing countries in particular are struggling more than ever with energy security.
The Nigerian-born OPEC head, who leaves the organisation at the end of July, noted that the world needs to continue to fight for energy security in a sustainable and just manner, explaining that eradicating energy poverty must remain at the top of the agenda.
“We are concerned that hasty and impulsive decisions could lead to a disorderly energy transition, which would see energy exporting developing countries lose out again. They stand to be substantially affected by the guidance in these documents,” he stated.
In order for countries to develop and for a just transition to occur, Barkindo stated that there was need to have the opportunity to develop energy resources in as clean a way possible, which he said requires international cooperation and partnership and the provision of sufficient finance, along with technology.
He added that affordable, clean energy for all was necessary and will require the contribution of all forms of energy, with technology supporting their most efficient possible production and use.
“We want to see a just and inclusive transition occur. One that builds resilient, equitable and sustainable societies. In order for this to happen, universal access to reliable and affordable modern energy sources and energy stability are requirements,” he maintained.
In the meantime, the OPEC+ coalition will likely hold firm to its oil production plans this week even as the European Union moves to sanction group member Russia, Bloomberg has said, quoting delegates.
Global oil supply and demand levels remain stable, with no severe disruption yet to Russian exports, and thus require little action from the 23-nation alliance, according to the officials.
It is coming as oil prices continue to climb, surpassing $124 a barrel in London on Tuesday, as the EU’s planned embargo stands to tighten a global market already squeezed by rising fuel consumption and limited supplies.
As a result, OPEC+ looks poised to rubber-stamp a modest increase of 430,000 barrels a day for July as the group, in theory at least, revives production halted during the pandemic.
But in practice, most expect the group will struggle to deliver half this planned increase, if any, as diminished investment and political instability take a toll on the capacity of many members. Nigeria and Angola have suffered some of the most severe output setbacks.
Meanwhile, Nigeria grew its crude oil production by about 70,000 bpd in May, according to a Reuters survey , mirroring a partial recovery in outage-hit Nigeria.
The 10 members of OPEC bound by the deal pumped 24.73 million barrels per day (bpd) in May, up 280,000 bpd from April and above the 274,000 bpd increase called for by the accord.
OPEC and its allies, known as OPEC+, are slowly relaxing 2020 output cuts as demand recovers from the pandemic. OPEC+ meets on Thursday and is expected to confirm a previously agreed output hike despite the surge in oil prices after Russia’s invasion of Ukraine.
The deal called for a 432,000 bpd increase in May from all OPEC+ members, of which about 274,000 bpd is shared by the 10 OPEC producers the agreement covers.
Output undershot the pledged hikes between October and April, with the exception of February, according to the survey as many producers still lack the capacity to pump more crude following insufficient investment, a trend accelerated by the pandemic.
As a result, the 10 OPEC members pumped far less than called for under the deal, with OPEC compliance to pledged cuts being 178 per cent, compared with 164 per cent in April.
The biggest rise in May of 100,000 bpd came from Saudi Arabia, while the second-largest of 70,000 bpd came from Nigeria, which loading schedules indicate boosted exports in May, even though key crude stream Bonny Light remains under force majeure.
A THISDAY analysis of the figures showed that Nigeria grew its total production from 1.35 million barrels in April to 1.42 million barrels in May, although the country’s quota remained 1.753 million bpd for the month.
Kuwait and Iraq provided smaller increases of 40,000 bpd and 30,000 bpd respectively, while the United Arab Emirates added 20,000 bpd.
Production did not increase in Congo, Equatorial Guinea and Gabon, the survey found, owing to a lack of capacity.
The biggest decline was in Libya, where supply dropped by 70,000 bpd as unrest continued to curb the country’s output.
Output in Iran also fell as exports declined, in part because Iran has shipped less oil to China since the start of the Ukraine war as Beijing favoured cheaper Russian crude. Also, production in Venezuela, the third exempt producer, continued to edge higher.
OPEC and allies, known as OPEC+, are unwinding record output cuts made in 2020 yet are struggling to achieve their planned monthly production increases.
In May, the cuts required of OPEC stood at 1.095 million bpd, although the actual cut made by the 10 OPEC members bound by the deal amounted to 1.953 million.
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