What are your main priorities for OPEC?

As always, our focus is on market stability. This is in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry. Stability benefits all stakeholders. As for challenges, the main one in the short-term remains the global economy. There is a particular focus on the Euro-zone, which continues to struggle with such issues as sovereign debt, the banking crisis and high unemployment. 



In OPEC’s most recent World Oil Outlook, world energy demand in 2035 is expected to be more than 50% higher. What is OPEC doing to face this challenge?
Let me say here that there are more than enough energy resources to meet this demand growth. From OPEC’s perspective, our investments in the oil sector are of course focused on the medium-term. OPEC’s latest list of upstream projects shows Member Countries undertaking or planning about 116 projects during the 2012–2016 period. This corresponds to estimated investments of about $270 billion.

 

Given current assumptions and projections in OPEC’s Reference Case from its World Oil Outlook, as well as natural decline rates in existing fields, it is estimated that total OPEC liquids capacity will rise by 5 million bbl/d over the period 2012–2016. Thus, OPEC’s spare capacity is set to stay at healthy levels. What this highlights is that OPEC’s Member Countries continually strive to make sure that the market is well supplied and that there are comfortable levels of spare capacity; today, tomorrow and in the future. Looking to 2035, the industry’s combined investment requirements in the upstream, midstream and downstream are estimated to be somewhere in the range of $6 to $7 trillion.



OPEC celebrates its 55th Anniversary, a proud milestone for any institution. How have the challenges facing OPEC changed over the years?
This is an interesting question. In terms of our overall goal I would have to say ‘no’. Market stability remains central to everything we do. However, it is clear that some of the challenges we face today were not around, or were perhaps not viewed as important, back in 1960. Allow me to give you a couple of examples.

Fifty years or so ago, we were not talking about the link between price volatility and excessive speculation. However, it is one of the biggest challenges facing the oil industry today. Speculative investment flows can distort the price of crude. We cannot avoid speculation and volatility altogether. However, it is essential we look to mitigate extreme volatility and excessive speculation. These are detrimental.

And of course, back when OPEC began the issue of the environment was not viewed as central to the energy industry. Of course we can say it should have been, but this is only with hindsight. Today, the environment is very much to the fore in all of the industry’s activities. With fossil fuels expected to dominate the energy mix for the foreseeable future, it is important we look to technologies that help our industry continue its exploration, production and refining activities in cleaner, more efficient ways.

 

What would be the legacy of your administration?
The last six years have been a remarkable time for me, and for OPEC. Back when my tenure began in 2007, who could have predicted the global financial crisis and subsequent economic downturn, the huge price swings in 2008 and last year’s events in parts of North Africa and the Middle East, including the enormous changes we have seen in my own country Libya.

Together with the support of my staff, I hope I have been a steady hand at the tiller in guiding the Organization through these often choppy waters. Here, I should also highlight the importance of the help and backing of the other bodies of the Organization – the Ministerial Conference, the Board of Governors and the Economic Commission Board. Their decisions, their inputs and their guidance are essential to the effective and efficient running of the Organization.

As for a legacy – that is not for me to say. But I do feel we are stronger today, than we were back in 2007. And I am confident that OPEC will continue to go from strength-to-strength in the years ahead.