Haitham Al Ghais

OPEC is focused on harnessing the resources and expertise of the oil industry to help develop cleaner and more efficient technological solutions that will help the world meet its future energy needs.

What are currently the major challenges and priorities for OPEC?

For OPEC, for our partners in the Declaration of Cooperation (DoC), the key priority remains helping ensure a balanced and stable market, in the interests of both producers and consumers. The team at the OPEC Secretariat review the market outlook on a daily basis, which is vital in a market as dynamic as the current one. This supports our decision-making process and enables DoC to be transparent in its approach, measured and attentive to the evolving market, and objective and agile in terms of providing long-term guidance. This also feeds into the enormous and often complex challenges around the interplay between energy affordability, energy security, and the need to reduce emissions. We have all seen this play out in regions across the world in 2022. In this regard, we need to recognize that there is no one-size-fits all pathway to the energy transition. We need to take an all energies, all technologies, and all people approach. This is a priority for us all. We cannot afford to get the energy transition wrong, particularly given that in our World Oil Outlook (WOO) 2022 we see global energy demand increasing by 23% by 2045, with oil continuing to play the leading role.

What particularly impactful solutions have been implemented among OPEC members using digital tools and strategies?

Technology has always been a key enabler for our industry, and it is clear that digitalization is being leveraged in member countries to help cut costs, improve efficiencies and productivity, reduce emissions, advance the availability of assets, and add value. For example, the Internet of things (IoT), as well as blockchain, AI, and data analytics provide technological options to streamline downstream oil and gas supply chains. Autonomous machines, robotics, and new exploration tools are providing answers to questions of how to access previously elusive upstream deposits. Digital solutions are also assisting with preventive maintenance, detecting, and reducing emission leaks, and improving the sector’s environmental footprint. Moreover, they also have great potential for the circular carbon economy (CCE), with CCE actively promoted by many of our member countries.

In the World Oil Outlook 2045, OPEC specifies the challenges of developing economies, which heavily base their economy on oil production. What strategies and tools can these countries employ to address the climate crisis without abandoning the essential part of their economies?

The specific circumstances and capabilities of every country, including natural resource endowed countries, should be considered in future climate action and in developing environmental policies. At OPEC, we have no doubt that the resources and expertise of the oil industry can be harnessed to help develop cleaner and more efficient technological solutions. The strategy focuses on not only reducing emissions, but also helping enable the world to meet its future energy needs. For example, carbon capture utilization and storage, direct air capture, blue hydrogen, and other technologies can be leveraged. Such innovative approaches offer wider benefits not only for natural resource endowed countries, but also for the rest of the world to ensure an inclusive, just, and sustainable transition. To put the future of energy into three simple statements: we need to ensure energy is affordable for all; we need to transition to a fairer and equitable world in which every person has access to energy as referenced in UN Sustainable Development Goal 7; and we need to reduce emissions. OPEC member countries are fully committed to these points. For example, the challenges of climate action, energy security, and economic prosperity to help shape a sustainable energy future are front and center of the Saudi and Middle East Green Initiatives.

Could you elaborate on the importance of the MENA region oil production output in terms of safeguarding the stability of worldwide energy consumption in the coming months and years?

OPEC member countries are committed to ensure the oil market is stable and well supplied and that investments are made to meet future demand. The proactive and pre-emptive DoC decision taken in October 2022 to adjust production downward by 2 million barrels a day (mb/d) from November 2022 has proven to be the right course of action in terms of stabilizing the market. The decision has also given an additional spare capacity buffer to the market, the majority in the MENA region, in case of any unforeseen eventualities. Moreover, the analysis and data in our Monthly Oil Market Report has been shown to be an accurate gauge of market developments. In terms of investment in the region, Kuwait has plans to hit 4 mb/d, Saudi Arabia has plans to reach 13 mb/d, and the UAE targets 5 mb/d. Iraq has significant potential too, as does Iran, and we see opportunities in Algeria and Libya too. We see significant downstream capacity expansion in the region too, such as the Al Zour refinery in Kuwait. It is important to stress, however, that the investment challenge is a global one. We need to recognize that globally there is that not enough investment going into the industry, and this is true for all energies. For the oil industry alone, we see global investment requirements totaling USD12.1 trillion between now and 2045. This equates to over USD500 billion each year. We need all industry stakeholders to work together to ensure a long-term, investment-friendly climate, with sufficient finance available—one that is sustainable and works for both producers and consumers and developed and developing countries. It is a multi-year supply and investment challenge, one that has to be tackled head on, and we have to start today. If the world does not get it right, it could sow the seeds of future energy crises. This serves neither the interests of producers nor consumers.

What expectations and priorities does OPEC have for 2023?

Vigilance remains the key word. We see some optimism, but we are also cognizant that many uncertainties remain. These include persistently high inflation that may necessitate further monetary tightening measures by major central banks, rising interest rates, the relaxation of China’s zero-COVID-19 policy, and any resolution of the geopolitical conflict in Eastern Europe. OPEC and the DoC will remain attentive to any changing market dynamics as exhibited by our regular meetings. We are focused on the full oil market picture. We believe this agile approach continues to bring reassurance to the market. One major priority for the organization in 2023 is the eighth OPEC International Seminar that will take place on July 5-6 under the theme Towards a Sustainable and Inclusive Energy Transition. The event looks to strengthen cooperation and dialogue among energy stakeholders by facilitating discussions on the critical issues affecting the petroleum industry. We looking forward to welcoming participants to Vienna for what we believe will be a truly memorable and informative event.