H.E Issa Shahin Al Ghanim, Governor of OPEC for Qatar
Qatar’s governor of OPEC explains that one of his country’s important roles within OPEC as a small oil producer is to counter negative perceptions about the organization and its members. He also discusses the continuing place for OPEC in the world by acting as major oil producer, stabilizing markets and prices when demand is high.
How has Qatar’s role in OPEC changed over the last 10 years?
The State of Qatar joined and has remained one of the 12 Member Countries of OPEC since 1961. Qatar’s role in OPEC has not changed over the last 10 years, although Qatar was and is a relatively small exporter of crude oil of about 0.724 million barrels/day in 2012. The State of Qatar supports the mission of OPEC, which is to co-ordinate production policies of its member countries and ensure the stability of oil markets 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.
One of Qatar’s important roles within OPEC is to collectively counter negative perceptions about the organization and its members. We support the cooperation and unification of policies that help to safeguard collective interests and enhance the sovereignty of the member countries, and to shape their own future. Qatar participates positively and supports developing collective decisions undertaken by the member countries over the years in overcoming issues and challenges facing OPEC, towards achieving OPEC’s mission. This is evident especially when Qatar assumes the presidency of OPEC, which is a rotational cycle.
How relevant do you think the organization is today, taking into account world energy demand and trends?
Despite the changes taking place in the world energy supply-demand balance, particularly the strengthening of oil demand in the Middle East, Asia Pacific and the emergence of unconventional oil supplies from North America, OPEC continues to remain relevant. OPEC, and also the International Energy Agency (IEA), have provided long-term energy supply outlooks, detailing where oil, gas and coal are expected to continue dominating the long-term global energy mix, even though renewable energies have been quite extensively promoted by some countries in Europe, including the United Nations via the “Decade of Sustainable Energy for All (2014-2024)”. OPEC also advocates responsible stewardship of the environment and recognizes the need to protect the environment and support sustainable development as expressed during some of the past UNFCCC Conference of Parties (COP).
Although OPEC may be perceived as less relevant than it used to be in the 1960s and 1970s, OPEC member countries currently contribute about 30 percent of the world’s crude oil production. The unity and sustainable co-operation demonstrated by members of OPEC has helped to stabilize the international oil market and increase the security of oil supplies. At times, OPEC had to take up the role of ‘swing oil producer’ to make up for any unexpected disruptions or shortfalls in international oil production, for the benefit and security of oil supplies in the international market. Therefore, OPEC plays a key role in stabilizing the energy market by increasing supply to cover short-term shortages that adds pressure on prices during high oil price periods.
As somebody with great experience in the Qatari oil and gas sector, what do you see as Qatar’s main challenges in maintaining its current oil production?
Although Qatar is blessed with abundant oil and gas resources, these strategic and valuable resources are non-renewable and will continue to deplete with time. The challenge is sustaining current oil and gas production through finding new resources, sustaining the useful life of offshore and onshore oil and gas assets against wear and tear that can cause accidents and inefficiencies if not well taken care of.
Another challenge is to complement hydrocarbon energy production by investing in renewable energy resources, to free up some of the domestically consumed oil and natural gas for export.
In sustaining a suitable a reasonable level of foreign investments in the long-term?
Most of the foreign investment interest in the State of Qatar is premised on available hydrocarbon oil and gas resources. As the oil and gas resources are depleted, it will get harder to maintain the same level of production; it also gets harder to sustain the same level of foreign investments in any country. Qatar has to diversify its economy to hybrid models based on knowledge and creating new promising opportunities for investment.
As you probably know, Qatar Petroleum’s new vision focuses on being more international. This entails a huge investment program with prudent management, selection of excellent assets worldwide and managing new types of risks. We have to develop and sharpen all these skill sets and knowledge to achieve this vision. This role is largely allocated to Qatar Petroleum International, which is subsidiary 100 percent owned by Qatar Petroleum. They are already making headways in various countries around the world.
How will those challenges, in your view, be best overcome?
In addition to have been mentioned so far, Qatar has to attract higher foreign investment to further strengthen the food-water-energy nexus, particularly in tapping and exploiting renewable energies such as solar, in the best and long-term interests of its people. This is to sustain the energy future of the State of Qatar when both oil and gas resources are depleted, while sustaining food and water supplies. These are currently some of the key issues and challenges facing the country.
Those challenges have to be best overcome by multifaceted strategy including more research, development and demonstration projects that can produce tangible results with practical and cost-effective solutions. Regional and international collaboration and cooperation in renewable energy research and technological development would also offer a venue to address some of these issues and challenges.
Looking at the future role of OPEC in the future, what role would you like to see Qatar taking within the organization over the next five years?
OPEC has earned the respect and reputation of a responsible international organization despite some attempts to discredit it. Although OPEC is an intergovernmental organization, decision-making in OPEC ought to remain firmly bound by its statute and mission, based on collective and unanimous agreement of all members. This decision-making process must be above the interests of any individual member country, being neither polarized nor influenced by individual political considerations. OPEC will remain an organization that stabilizes oil markets by ensuring that enough supply is reaching the market and that oil producing countries receive fair income for their oil exports. This will support the continuation of investment in this sector, and ensures that the market is well supplied in the future.