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Energy Transition: Nigeria’s Position Will be Properly Represented, Says New OPEC Head

todayAugust 9, 2022

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A few hours after he took office in Vienna, headquarters of the Organisation of Petroleum Exporting Countries, the new Secretary General of the organisation, Mr Haitham Al Ghais, held an online conversation with select Nigerian journalists on his plans for the global oil industry. Emmanuel Addeh presents the excerpts.

Yourself and your successor, the late Dr Sanusi Barkindo, worked together at OPEC. How was that relationship?

First, allow me at the onset of our discussion today to personally extend my sincerest condolences to Nigeria. To all of you to my brothers and sisters in the oil sector in Nigeria, for the great and tragic loss of my brother, his Excellency Mohammed Sanusi Barkindo.

 In fact, this morning I was received by the staff at the Secretariat and I had everybody join me in a minute of silence, out of respect, to pray, to reflect and pray for mercy on the soul of our late brother.

I don’t need to say this to you, but it is only apt that I briefly share some of the experiences I had with my brother Barkindo, whether here in Vienna, or other places around the world where he travelled frequently and we accompanied and travelled together for various meetings and occasions related to OPEC, and OPEC+.

Barkindo and I were such close personal friends. It was a tragic day for me when I woke up at 6am in the morning in Kuwait, and I got a message from one of the governors here (of his demise). I was in disbelief.

It’s a loss not just for Nigeria and for OPEC. It’s a huge loss for the oil industry at large and for the world.

The Barkindo was well known everywhere you go. He was an ambassador for OPEC and for OPEC+.  He was a man who worked for cooperation, for multilateralism, for dialogue among everybody and all the energy stakeholders around the world.

He has built a lot and I hope to be able to build on what was left behind and the legacy of Barkindo.

You were unanimously elected in January to take over the leadership of OPEC. How does that make you feel?

 I would like to start by saying how appreciative I am to the Nigerian government, to his Excellency President Muhammadu Buhari, to his Excellency the Minister of Oil, Mr. Timipre Sylva and to all my colleagues, brothers and sisters in the Nigerian oil sector, who have supported my candidacy for this position from the very beginning.

It is, as you are aware, not a secret that I was voted into the position by acclamation by all the 13 member countries. I highly appreciate the support of Nigeria and the executives in charge of OPEC from Nigeria who have given me their voice. This is an honour that has been bestowed upon me.

It is a great thing that I will appreciate and highly value for the rest of my life. And I look forward to developing further cooperation with OPEC and Nigeria being a critical and vital player within the OPEC organisation and the wider OPEC+ alliance. As you all know as well, Nigeria has been a key member representing the African continent since the 1970s, a member of OPEC and Nigeria is the largest oil producer in Africa.

Nigeria’s extension of its energy activities encompasses a wide array of activities. We saw the news lately about the signing of the gas pipeline that is going to be built between Nigeria, Niger and all the way to Algeria. This is a significant development on the continent.

 And we really commend Nigeria for its active role in the energy sector in Africa and its development. And we also congratulate NNPC for the recent unveiling of its new, if I may say this new character or the new logo, if I’m not mistaken.

I was in touch with NNPC Managing Director Mr. Mele Kyari, my friend and congratulated him on that as well. Nigeria is a key player in the OPEC plus alliance. And you are all aware of course that Nigeria is a member of the joint ministerial monitoring committee. This is a committee that is critical to the successful implementation of the Declaration of Cooperation.

Mr. Barkindo was the key player and instrumental player in bringing about the alliance at its onset. I remember in 2016 when he took office as Secretary General, and I was at the same time appointed as the first chairman of the joint technical committee in charge of monitoring the implementation of the production adjustment agreement back then.

 I worked very closely with the late Secretary General in the joint technical committee, and then the joint ministerial monitoring committee to implement the agreement and actual successful implementation. So I really highly appreciate and value the role that Nigeria under the leadership of his Excellency Minister Sylva is playing in the declaration of cooperation and the JMCC.

 God willing, I will be arranging a visit to Abuja to meet with the officials and to discuss opportunities for further enhancement of Nigeria’s activities with OPEC and of the of the wider continent activities and OPEC, and also to focus on the importance of the African continent on today’s energy landscape.

The continent has 1.2 billion population, there are 600 million, almost half of them without electricity. There is an ongoing discussion about the energy transition and the voice of these people needs to be heard, and be taken into consideration seriously and accounted for. And I want to say that in the energy transition, there is no one size fits all solution.

Everybody’s voice must be presented. Everybody must be part of this dialogue, most notably, our brothers and sisters on the African continent. So there is a lot that has to be tackled, many issues, many challenges, going forward.

But OPEC has been there for 62 years since its establishment in 1960. And with leading members such as Nigeria, OPEC will overcome I’m sure all these challenges in the future, and we will work on them with the cooperation of all our member countries.

You have spoken so well about our brother and immediate past Secretary General, who did a lot to represent Nigeria beautifully at the global scene there. And you spoke about his intervention in trying to balance the market and ensure stability of the oil market. For the most part of the last four years, that’s what he’s been doing.  So, what direction are we looking at? Are you going to continue with what he did to stabilise the market?

This is a very important question, and I want to clear it to make it crystal clear. From the very onset, OPEC has been an organisation with a joint effort, a joint objective and unified spirit. It is not about me coming and taking over from my late brother to go and change the direction.

The direction is dictated by the market conditions. The market condition is what unites OPEC and then the wider group of OPEC+ and in doing whatever it thinks necessary to maintain the market balance, bearing in mind that in the market, a healthy state where it’s balanced between supply and demand, is in the interest of not only the oil producers, but also all consuming countries.

It’s to the benefit of the wider global economy, to the benefit of our peoples. So, absolutely, I will maintain this course, this direction. It is not only me personally, this is the whole organisation with all its member countries, and the wider alliance, broader lines are open plus the 23 countries that are interested in maintaining what my late brother embarked on in 2016 just to make that very clear.

The whole world is talking about energy transition now. And in your short speech, you talked about the interventions the Nigerian government is making to ensure that it takes advantage of opportunities in the energy sector.  I want to know specifically what kind of support we expect from OPEC to be able to realise most of those projects?

Let me remind you again, that this is my first day in office. I will have to sit with all the esteemed member countries as we do through our usual avenues, whether it’s the Board of Governors or the Economic Commission Board, and then with the management and put the plans for all the critical issues that we have and challenges that we have, including what you highlighted, which is absolutely a critical issue and challenge.

However, I can say the following: That OPEC’s voice and Nigeria being a member, as I said, an important key member of OPEC, OPEC’s voice will be heard loud and clear, just as it was very loud and clear through its late Secretary General, Mr. Barkindo. We have many discussions, which are centred on energy transition and climate change. In fact, we have in Egypt in the month of November, the cop 27 negotiations where OPEC will be present.

Next year, Cop 28 will be held also in the United Arab Emirates, which is also a member country of OPEC. And these are actually very good platforms for OPEC member countries to come and voice their opinions and their views on how the energy transition must unfold in a way that is sustainable, in a way that is all encompassing in a way that is fair.

 And as I said earlier, there is no one size fits all. This is key. We have to make sure, we have to be aware that different people in different parts of the world have different requirements. I hope this is again, loud and clear to everybody.

I wanted you to be clear regarding coming to Nigeria. I wanted to know if you have a time line as to when we should expect you in Abuja?

To be honest with you, I haven’t fixed the time yet.  Today is just my first day but I have been in touch with my brothers and we are trying to set a time that is convenient to the schedule of the minister, and the Nigerian government officials and as soon as I get the green light, I will come and I will make sure that we will inform you well ahead of time so we can have a chance to sit together face to face.

 I always prefer the face to face dialogue which is a much better opportunity to understand each other and communicate, but we will definitely let you know through the ministry and the media people in the ministry well ahead of time before the trip is planned.

I expect, but please don’t quote me, that within the coming two to three months, I should be down there.

There is pressure from some parts of the world, especially the United States.  They are asking that OPEC should increase supply but as you know, OPEC does not have much capacity to increase the supply.

Would you be willing in the next few weeks or few months to meet with the US officials to discuss some of these issues that are pending?

I think it’s not up to me just to meet with the officials. You’re seeing that the US officials have come to the Middle East, they have met with a wide group of the Gulf Cooperation Council, out of which three member countries Saudi Arabia, United Arab Emirates, Kuwait are also OPEC member countries.

 So, there is ongoing dialogue definitely with the US officials. I personally don’t see any reason why I cannot not meet with US officials if required. It’s not an issue for me. We are again as I said, we are open to dialogue.

OPEC has existing dialogues with the EU, with China, with the Russian Federation, with Africa and with the Gulf Energy Exporting Forum. So OPEC is open to establishing dialogues with the US.

And what I would like to reiterate and emphasise on is that all our decisions are done within the wider context of the OPEC+ framework to increase production or to decrease production, and ultimately, as I said, always with objective of a market balance.

Russia is a very critical member of OPEC+. Do you think the world can really navigate the shortfall coming from Russia and the crisis that we’re facing today?

 Russia is absolutely a critical member of the world energy landscape. Russia produces 10 million barrels a day, which is almost one in every 10 Barrels produced on a daily basis. In addition to the oil it produces, Russia is a major gas export producer and exporter to the world.

Russia is also a key member of the OPEC+ alliance. Russia is the co-chair of the joint ministerial monitoring committee and the wider OPEC+ agreement.

 So I agree with you, it is not easy to replace any shortfall from Russia. Russia is a key player. And we hope that things will unfold in a positive way whereby there will be no huge shortfalls that will affect the market balance, and this is what we try to do through our alliance.

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