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  • Oil & Gas - News
  • Updated: May 18, 2023

OPEC Says Oil Investment Vital For Global Energy Stability

OPEC Says Oil Investment Vital For Global Energy Stability

The Secretary-General of OPEC, Haitham Al Ghais, has said that the world needs more oil to support economic development.

He expressed this in a recent interview with S&P Global Commodity Insights.

He contends that it is alarming to hear requests to quit investing in oil because OPEC's data-driven forecasts predict that more oil will be required to support future prosperity and economic growth throughout the world.

“Our energy future is an ‘and’ question, not an ‘or’ question.

“The world desperately needs investments in all energies and in all technologies to help reduce emissions.

"It is vital that we get our energy future right: securing reliable and affordable energy for all while reducing emissions.

“This can only be achieved through international cooperation based on multilateralism and constructive dialogue.

“OPEC member countries continue to invest heavily in the oil industry, especially in the downstream sector.

“Recent examples include ADNOC’s Crude Flexibility Project at the Al-Ruwais refinery in the UAE, the Dangote refinery in Nigeria, and the Clean Fuels Project and Al-Zour refinery in Kuwait. 

"Despite all of this, oil demand will grow faster than the net refining capacity additions, and that may lead to further petroleum product shortages.”

Al Ghais stressed the importance of countries integrating petrochemicals into refineries in order to boost the value of refineries while also emphasising rising downstream investments in OPEC member nations. 

He contends that interested parties need to understand that the development of increasingly complicated refineries will be the future of refining capacity.

Therefore, it now involves integrating petrochemicals as well as recovering the margin through the intricate process of refining oil.

This is due to a rising tendency that seeks to maximise value by integrating the petrochemical industry with the refinery.

Al Ghais believes that the world requires more oil, not less.

He told S&P worldwide that the ongoing underinvestment in the oil sector, which has resulted in production restrictions, dwindling spare capacity, and decreased refinery output, is genuinely a worldwide concern. 

“It is a challenge that we cannot keep procrastinating on and leave for tomorrow.

“We continue to face efforts to create a policy rulebook that stigmatizes hydrocarbons and seeks to divert much-needed investment away from the industry, including movements by financial institutions to limit and stringently control how money is invested in oil under environmental, social, and governance.

“This situation has stoked uncertainty and volatility to the detriment of producers and consumers and ultimately global energy security.

“It is also disheartening and particularly impactful on developing countries with oil and gas resources, many of whom rely on revenues from these commodities to build their economies and social infrastructure.”

Dr Sultan Al Jaber, the president of COP 28 and minister of industry and advanced technology for the UAE, had urged global players to focus on lowering emissions rather than gaining access to energy.

He contends that by reducing emissions and reviving economic growth, the globe can create a new framework for economic development.

While the world continues to utilise hydrocarbons as an energy source, he insisted that all parties involved must do all in their ability to lower and eventually eliminate the carbon intensity of that source of power.

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