OPEC congratulates Nigeria on PIB passage

…Reassures on demand recovery

Lagos — Secretary General of the Organization of the Petroleum Exporting Countries, OPEC, Mohammed Barkindo, has congratulated Nigeria on the recent passage of the Petroleum Industry Bill, PIB.

In his virtual keynote address at the ongoing 20th Nigeria Oil and Gas Conference and Exhibition holding in Abuja, Barkindo, who is a Nigerian, said the long-awaited Bill will, among many others, help drive investments into the country’s oil and gas sector.

“Allow me, on behalf of OPEC, to congratulate you on the Petroleum Industry Bill (PIB), which was just passed by both chambers of 9th National Assembly of our great country. This long-awaited legislation for the oil and gas sector will help guide the necessary reforms designed to strengthen institutions, solidify regulatory and fiscal frameworks and attract much-need investment in a sustainable manner. The 9th National Assembly has engraved itself in gold in passing the Petroleum Industry Bill.”

Barkindo urged the ‘Declaration of Cooperation’ producers to remain proactive, flexible and vigilant as cases of COVID-19 surges higher globally.

“There is, however, a range of uncertainties that we are monitoring closely. These include an elevated risk of inflation due to massive financial stimulus programmes, uneven vaccine rollouts across the world and the spreading COVID-19 Delta Variant, which is now even impacting countries with high vaccination rates.

“This challenging backdrop will require the Declaration of Cooperation producers to remain proactive, flexible and vigilant. This prudent approach moving forward will enable the DoC to remain agile and responsive while avoiding unwanted market imbalance after April 2022. In this regard, following the most recent Ministerial Meetings held at the beginning of July 2021, the DoC producers will continue to convene on a monthly basis within the context of the Declaration of Cooperation”, he said.

The World Health Organization had announced on March 11, 2020 that the rapidly spreading COVID-19 virus was now a global pandemic.

The virus has also exacted major damage on the global economy and on oil demand, which dropped by a stunning 22 million barrels per day in April of 2020 at the height of the pandemic.

World economy also contracted by 3.4 percent year-over-year in 2020.

“Nigeria and its fellow OPEC member countries suffered massive economic losses, and its oil and gas industries were in dire straits. However, the rapid and decisive response of the DoC producers once again came to the rescue and delivered CPR to an industry on the verge of collapse.

“In the past weeks and months, we have seen a welcome shift in momentum as significant progress continues to be made on the rollout of global vaccination campaigns,” Barkindo stated.

More than 3.2 billion doses of the vaccines have now been administered globally.

Barkindo said OPEC hoped that vaccination will continue to grow in the weeks and months to come.

“The world will only truly defeat this pandemic when both developing and developed countries have the ability to vaccinate their populations to reach herd immunity. This, in turn, will enable all countries to re-open their economies and bring their energy industries back up to full-speed,” he said.

As a result, Barkindo said OPEC forecast world oil demand to rise by 6mb/d.

According to him, “both the economy and oil demand are expected to see accelerated growth in the second half of this year”.

In his keynote address, titled ‘Global Oil Market Dynamics in a Decarbonising World’, the OPEC secretary general said the unpredictability and volatility brought on by the pandemic has intensified discussions related to climate change and the energy transition, adding that some corporate boards are pressuring oil companies and governments to pursue radical policies and initiatives that could, in the end, be more disruptive than productive for the global energy industry.

He emphasised: “There have recently even been calls for investments in oil and gas to be discontinued, which is a dangerous and unrealistic scenario. These voices have emerged particularly in the context of the net-zero 2050 emissions discussions.

“The fact is, however, that oil and gas have an important role to play in the energy transition. Let me be clear, OPEC supports the need to reduce emissions, bolster efficiency and embrace innovation, but we must be aware of the risk we run of not adequately investing in the future of this industry. We are already dealing with the harsh impacts the COVID-19 pandemic has had on investment, which declined by 30% in 2020.

“If this were to continue, we could see demand exceed supply, posing a significant energy security risk to both producers and consumers. And this, of course, could result in knock-on effects for both the global economy and geopolitics.

“One must also consider that, although many of OPEC’s Member Countries have made good progress in diversifying their economies, many of them rely primarily on revenue from their oil and gas assets to support their economic and social development.

“Let’s face it, there is simply not a “one size fits all” solution to addressing climate change. Different countries around the world have varying capabilities and diverse needs. Thus, reducing emissions has many paths, as set out by the Intergovernmental Panel on Climate Change (IPCC), and we must consider all of them as viable options”.