Caspian Energy (CE): In June last year, you were in Azerbaijan on an official visit. How important was the trip in helping cement ties between OPEC and Azerbaijan?
H.E. Haitham Al Ghais, Secretary General of OPEC: Azerbaijan has been a key part of the Declaration of Cooperation (DoC) over the last seven plus years, and my visit in June last year was an opportunity to review the excellent work of the DoC, which remains core to global oil market stabilization efforts. This formed a key part of the excellent talks I held with the President of Azerbaijan, His Excellency Ilham Aliyev, as well as the Minister of Energy, Parviz Shahbazov and the President of the State Oil Company of the Azerbaijan Republic (SOCAR), Rovshan Najaf.
It is important to recall that President Aliyev was one of the key voices in bringing together OPEC and non-OPEC back in 2016, and today, the country’s leading and responsible approach is a measure of its commitment to the DoC. All of this resonates with the historical role that Azerbaijan has played in the evolution of our industry, for which it is often referred to as ‘the cradle of the modern oil industry’.
The meetings were also an opportunity to discuss other key issues, including the investment challenges facing the industry and the need for energy security and reducing emissions to go hand-in-hand. In this regard, we offer our full support to Azerbaijan in its holding of COP29 later this year.
The visit to Baku further cemented the bonds of friendship and partnership between Azerbaijan and OPEC. I very much look forward to my next visit.
CE: How important for market stability are collective actions taken by oil producers? Does OPEC and the broader DoC group remain cohesive?
Haitham Al Ghais: OPEC has always placed great faith in consensus building and taking collective decisions in the interest of its overarching objective – global oil market stability. It has served the Organization well over many decades, and this simple legacy of embracing unanimity as its decision-making mechanism has delivered much success.
These principles have also supported the DoC process since its establishment in December 2016. This has been emphatically underlined on many occasions, such as in April 2020, when the DoC initiated the largest ever-voluntary production adjustments as a means of pulling the industry back from the precipice on which it stood, which also proved hugely beneficial for the global economy.
This sense of cohesiveness remains central to our actions today. Every OPEC member, and every partner in the DoC, remains fully focused on our common goal of a balanced and stable market, which is in the interests of both producers and consumers.
What the DoC also inspires is the value of dialogue and cooperation, which was a key tenet in the establishment of the Charter of Cooperation (CoC) in 2019. The CoC aims to facilitate dialogue and exchange views regarding issues such as global oil and energy market developments, energy security, energy transitions, environmental issues, policy developments, technological options and investment opportunities.
The CoC is open to all producers, with leading oil producer and global energy provider Brazil joining at the start of 2024.
CE: How has OPEC evolved over the last six decades? What has been central to its longevity and its success?
Haitham Al Ghais: When OPEC was created back in September 1960 at the First Meeting of the OPEC Conference in Baghdad, it was a seminal event. The five Founding Members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, joined around the premise of cooperation to help secure their indigenous natural resources.
There were many who expected that OPEC would not last its first decade, but over six decades later the Organization has evolved into an established part of the international energy community, the global multilateral system, and is known for its robust energy analysis and data.
The success of any inter-organizational body is linked to the strength and solidarity of its members, and OPEC is no exception. Cooperation, dialogue, transparency, fairness and unity still underpin all of our work and actions today.
Looking ahead, I foresee a bright and promising future for the Organization. Indeed, I have no doubt that OPEC’s best days remain ahead of it, especially given the determination and excellent leadership of its Member Countries.
CE: Given that some voices talk of oil demand peaking in the near future, what is behind OPEC’s oil demand growth forecasts out to 2045 in its World Oil Outlook?
Haitham Al Ghais: OPEC strongly believes that all forms of energy, including oil, gas, renewables and others, will be needed in the years and decades ahead, supported by all available and potential technologies. For oil, in particular, we forecast that it will retain the largest share in the global energy mix by 2045 at almost 30%, with global oil demand reaching 116 mb/d by then.
It is important to place this in the context of energy demand. In view of expectations for the global economy to double in size and the world’s population to rise to over 9.5 billion by 2045, global energy demand is set to rise by a significant 23%, adding annually on average 3 million barrels of oil equivalent per day.
Yes, some forecasters suggest that oil demand will peak by 2030, and stress there is no need for investment in new oil projects. I firmly believe this is wrong, and it is evident that some outlooks are ideologically driven. We see significant oil demand growth of 4 mb/d across 2024 and 2025, and we are not expecting to see oil demand peak by the end of this decade, the end of the next decade, or even by 2045 for that matter.
Oil demand trajectories underscore the importance of industry investment requirements. OPEC sees cumulative investment of $14 trillion in oil’s upstream, midstream and downstream sectors to 2045, or around $610 billion each year. It is vital that all stakeholders across the globe work together to ensure a long-term, investment-friendly climate, one that works for both producers and consumers.
At OPEC, we also recognize that alongside investments to help meet global oil demand, the oil industry needs to invest further to help reduce emissions. This is why our Member Countries are investing in carbon capture, utilization and storage, direct air capture and the circular carbon economy, as well as other energy sources, such as hydrogen, renewables and nuclear.
Overall, OPEC believes that the world should embrace an inclusive ‘all-peoples, all-fuels and all-technologies’ approach to ensure a sustainable energy future for all.
Thank you for the interview
