Perspectives of the Gulf by the Major Asian Powers
Abdulla Bin Hamad Al Attiyah
Second Deputy Premier
Minister of Energy &
State of Qatar
9:30 a.m Ė 11:00
Excellencies, Ladies &
During the thirty years
after the first oil shock in 1973 world energy
consumption increased by more than 73%.
During that period the
share in energy consumption of the industrialized
countries including the Soviet Union decreased from
78.4% to 61% of the world consumption.
That was not only
because of increased energy use efficiency but mainly
due to world economic growth and increasing energy
consumption in developing countries and especially those
with big populations such as India and China.
As a consequence there
was a shift of the center of gravity of demand and
increased consumption towards the East and South.
At the same time there
were changes in the shares of different sources of
energy in the world energy consumption mix.
While the share of crude
oil dropped from 45% to 34% the share of natural gas
increased by more that 7%. Coal maintained its share in
the energy mix and all other sources of energy such as
nuclear, wind, water, solar and biomass registered
It is not possible to
discuss the changes in the Energy dynamics in Asia and
the Middle East in isolation of the world Energy scene.
It is, therefore, necessary to look at the global
picture first, then examine its interaction with
regional factors and its influence on their development.
It is also necessary to
go back and review what we had witnessed and the changes
we lived through during the second half of the last
century and the first half of the present decade.
Up to the early
seventies of the last century, the International major
oil companies, the seven Sisters, were in control of
most of the world energy trade and managed efficiently
every link of the global energy chain from the sources
to the consumers.
Following the birth of
the organization of Petroleum Exporting countries, OPEC,
nationalizations and the establishment of national oil
companies in both exporting and importing countries;
changes became evident.
The International oil
companies gradually lost control of the source which is
most important link in the energy chain. They also lost
control of some downstream links in developing
countries. These were the start of structural changes in
As a result the Majors
and industrial countries directed their investment to
alternative sources of energy including oil and natural
gas outside the OPEC area.
On the downstream side,
the investments were selective and mainly in the more
profitable links of the energy chain. This caused the
development of bottlenecks in several sectors of the
industry such as refining and transportation.
On the other end of the
chain and because of what OPEC countries endured from
the mid-eighties and until the end of the last century,
nursing idle production capacities, relatively low
prices and lack of funds, no major investment were made
by OPEC countries in additional production facilities.
Long periods of low
refining margins and the high cost of building new
refineries, because of tighter products specification
and environmental considerations, rendered available
refining capacities inadequate for meeting the ever
increasing world demand for petroleum products.
Recent confusion and
worry linked to energy were caused by the substantial
increased in demand in Asia and other parts of the world
as a result of economic growth and the improvements in
the standard of living in populous countries.
It is easy to blame
forecasters, but it is only fair to also blame the
players on the energy scene who are responsible for the
lack of transparency which is essential for efficient
After a period of
strained relations, if not confrontation, between
producers and consumers starting in the early 1970ís
OPEC suggested, not long after the price collapse in the
1980ís moving towards dialogue and joint planning.
Because of abundant supplies and low prices at the time,
the response of the consumers was not positive.
After a shaky star of
the consumer producer dialogue in 1991, it developed to
become the International Energy Forum with a permanent
The Tenth Forum will be
held in Doha next April with the participation more that
seventy countries and international organizations. The
theme of the tenth forum will be ď Energy Security, a
Ministerial Forum there will be an International Energy
Business Forum to which more than forty CEOís of
International and National energy companies have been
invited to discuss and debate with ministers responsible
for energy and discuss their concerns.
The objective of all
that is, coordination and cooperation, which could lead
to joint planning and increased transparency. That will
stabilize energy markets reducing the chances of price
shocks. Also ensuring uninterrupted flow of supplies and
supporting world economic growth for the benefit of all
I mentioned earlier the
shift of the center of gravity of world demand East and
south because of increased energy needs in fast
developing countries at rates not seen in the past, if
we donít say unexpected.
What we witness today in
the Middle East and Asia in Energy dynamics and changes
are only the natural response to developments in the
world energy demand in general and Asian demand in
particular, coupled with the fact that most of the
worlds known hydrocarbon reserves are in the Middle
Because of the
importance of energy for economic growth, regionally and
globally, made energy a strategic issue of high
In spite of the many
international and regional alliances and groupings
dealing with energy issues such as OPEC, the IEA and
others, energy exporting and importing countries now
seek bilateral relations. They also encourage reciprocal
investment as a means of securing supplies for the
importing country and markets for the exporter.
Moves by China and India
for example to invest in exploration and production in
Africa, the Middle East and other locations and opening
their countries to investors in the energy sector are
excellent examples. This is in addition to investment in
supply pipelines which, in spite of their possible
drawbacks, help in diversifying energy supplies and
channels of delivery.
The involvement of a
consumer country in developing the reserves of an
exporter means better security of supply, while the
involvement of an exporter country in refining and
distribution in a consumer country means for the
exporter a secure market. So it is securing supplies for
one and markets for the other.
Since 1990 energy
consumption in mature economies increased by 40 percent
only while it doubled in emerging economies with Asia
registering the highest increase. The annual average
growth rate in Asian consumption was 4.6 percent
compared to only 1.3 percent in mature economies.
While it might be
difficult to make a forecast in numbers it is not so in
seeing the trend of changes to come.
Given that developing
countries will be responsible for most energy demand
growth in the future, and given oilís high energy
concentration and mobility, developing countries are the
natural future partners of the big reserves holders on
the producing side and especially those in the Middle
East who are developing countries themselves.
It is to be noted the
increased and growing number of studies, conferences and
ministerial regional round tables covering the energy
scene and its dynamics in Asian and the Middle East.
Recent high level
political visits and contacts between Asia and Middle
East energy exporting countries is another indicator of
concerns relating to energy security of both supply for
the Asian consumers and demand for the producers.
It is an accepted fact
that energy sources other than hydrocarbons and coal
will play in the future an important role in
environmental, economic and strategic aspect of energy.
This makes transparency of consumer country plans so
important and essential for forecasting the need for and
developing conventional energy sources.
In conclusion. Energy
market stability remains hostage to joint planning,
transparency and reciprocal trust.
Our joint target is
securing energy supplies that ensures the continuity of
globalize economic growth at the same time safeguarding
the interests of depletable energy source owners.
After all, energy
security is a joint responsibility.
Thank you for your attention.