Decarbonising the petroleum industry

Kuwait

Ali Sabt Ben Sabt, then-secretary-general of the Organization of Arab Petroleum Exporting Countries [OAPEC], talks to The Energy Year about the organisation’s initiatives related to digital transformation and measures being taken to decarbonise the petroleum industry. OAPEC is a multi-governmental organisation which coordinates energy policies among oil-producing Arab nations.

What are the most critical challenges being faced by member countries’ petroleum industries in light of the uncertainty surrounding the global economy and the shifting geopolitical balances?
The uncertainty surrounding global economy performance may lead to lower demand, which puts downward pressure on prices and negatively affects the petroleum revenues of the member countries. Also, continued escalation of geopolitical tensions in Eastern Europe could lead to increasing the risks surrounding global energy security.
Within OAPEC, we believe that oil prices should remain at levels that will encourage continued investment in the petroleum industry and support a healthy, balanced economy.
OAPEC member countries are keen to continue coordination and cooperation with other oil producing and exporting countries, especially within the framework of the OPEC+ group, which is essential to achieving balance and stability in oil markets.

What are the main initiatives envisaged by OAPEC related to the digital transformation of the petroleum industry?
Digital transformation is an inevitable necessity in light of the rapid developments that the world is experiencing in all fields, including the petroleum industry.
Since international and Arabic oil and gas companies are facing challenges in shifting towards renewable and clean energy sources, we recommend adopting an “adaptation strategy” to meet the future demand for all types of energies available in our region, as well as reduce emissions resulting from the petroleum industry.
OAPEC’s secretariat is committed to continuously monitoring the digital transformation technologies, which can help in cutting costs, boosting output, reducing carbon emissions and improving efficiency across the end-to-end value chain.
OAPEC has started an ambitious project on transforming all assets available in its library into digital forms, which makes it possible to read and cite electronic editions. OAPEC has also started electronic cooperation with Kuwait’s Ministry of Oil by linking the organisation’s library with the Ministry’s website, which will make finding all periodical resources an easy task.

What measures have OAPEC been taking to advance the decarbonisation of the petroleum industry?
OAPEC member countries are part of the UNFCCC and have played a great role during the negotiations concerning environmental issues and their interests as a group. OAPEC, with other concerned organisations, plays a vital role in clarifying the expected adverse measures of climate change policies and actions of the Paris Agreement on economies.
While following up the current UNFCCC negotiation developments, OAPEC emphasises the importance of the principles of: common but differentiated responsibilities, capacity differences, equity, historic emission responsibilities and fitting in priorities for achieving sustainable development with their priorities and national strategies. OAPEC welcomed the Paris Agreement that resulted from COP21, noting that all its member countries have signed the Agreement.

What is your assessment of the impact that the rapidly growing population and industrialisation process in the region will have on the energy markets?
The countries of the region are witnessing remarkable population growth, as the population of Arabic countries is expected to reach about 520 million by 2030 and 676 million by 2050.
OAPEC members have the largest reserves of crude oil (representing 54% of the world total), and they are the largest producers of oil (26% of the world total), which contributes greatly to achieving economic growth. However, if the current situation of a growing shift from being a major energy supplier to global markets to an increasingly important internal demand market year after year continues, then this will have negative repercussions represented in increasing the proportion of supply to local markets, which in turn affects and reduces the shares of OAPEC exports towards the Asian and European markets in particular.
Moreover, industrialisation contributes to creating a negative impact on the environment for the residents of the area. Therefore, a decisive proactive policy is necessary for policy makers in the fields of energy and the environment in order to do more to raise production capacities and consequently exports, as well as ensure the boosting of energy efficiency which in turn leads to an increase in both energy security and environmental sustainability.

Which are the main areas where co-ordination of policies among member countries is most needed?
As an organisation consisting of 10 countries, we must take into account the economic trends and priorities of each country when setting national budgets and determining economic policies. We always consider that our organisation aims at safeguarding the interests of its member countries in the first place, while also ensuring the stability and supply of oil markets.
Current efforts are directed towards ensuring more stability in oil markets. This cannot happen without co-ordinating and unifying the oil policies of the member countries. Therefore, we believe that the member countries should maintain their close co-operation in order to stabilise the oil market, especially in the context of uncertainties related to the tense geopolitical developments in Europe.
Regarding the main challenges to be faced, one can notice that the world today is very different from when the OAPEC was founded more than half a century ago. OAPEC cannot remain on the side-lines of discussions that concern the planet. We have to face challenges and risks simultaneously.
Examples of recent threats can be summed up in the crises in the international arena in terms of climate change issues, the Covid-19 health crisis and its aftermath and the war in Ukraine, in addition to inflation through the rise in prices that has affected all products, from energy to food. Now more than ever, we need further coordination and consultation to preserve our interests.

What are the most prominent results of joint national undertakings under OAPEC’s framework?
Since the founding of OAPEC, and stemming from its main goals, member countries took the initiative to establish a number of joint ventures to build bridges of co-operation among one another and to achieve a common benefit for all shareholding members. This resulted in the establishment of four companies. The OAPEC secretariat general pays great attention to these joint ventures, as they represent a unique model for joint Arab action.
In recognition of its efforts and recommendations, the OAPEC Council of Ministers decided in December 2021 to assign the organisation’s secretariat the role of “mediator” between OAPEC’s joint ventures and the member countries’ national companies playing a role in the same respective sectors.

Which scientific research projects is OAPEC focusing the most on, and which areas need more effort?
The experts of the secretariat general are working on converting primary data into reports and studies covering most areas of the petroleum industry. OAPEC focuses on enhancing the role of scientific research in the member countries through the holding of regular meetings for officials of petroleum research institutes and centres in the member countries.
The secretariat general is keen on encouraging scientific research through the OAPEC Scientific Research Award, which is awarded every two years.
Training programmes are an essential part of the objectives of establishing the organisation. The secretariat general chooses training topics according to the needs of the member countries in order to develop basic skills in the petroleum industry. The organisation cooperates with various global and Arabic training centres and institutes to develop and introduce these courses.

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