Third Joint OPEC/IEA Workshop Joint Communique

(Kuwait City) — 15 May 2005

A joint workshop was organised today in Kuwait by the IEA and OPEC on the energy outlook in the Middle East and North Africa (MENA). This event, hosted by the Ministry of Energy of Kuwait, was the third in a series of workshops that has seen the dialogue and cooperation between these two Organizations further strengthen. The first two, which took place at the OPEC Secretariat in Vienna in June 2003, and in Paris at the IEA Secretariat in April 2004, concentrated upon oil investment prospects, in particular regarding the oil outlook, investment challenges, drivers and uncertainties, and concluded that availability of reserves and capital was not a key constraint in making the necessary oil available over the coming three decades, emphasising the need for appropriate and timely investment throughout the energy chain, while recognising the uncertainties over future oil demand.

This third workshop, with its regional focus, had a wider objective than the earlier two, with its emphasis upon the economic prospects for the MENA region, as well as its energy supply and demand prospects. The MENA region has a great economic, commercial and trade potential. It is expected to play a growing role in world energy markets over the coming decades.

The workshop was attended by a select group of high-level delegates representing the OPEC and IEA Secretariats, as well as senior government officials from OPEC, OAPEC and IEA Member Countries, senior analysts from MENA countries, international experts on MENA economic and energy analysis, and experts from finance institutions. The workshop, after setting the scene to the discussions, included sessions on the economic and energy prospects in the MENA region, as well as country perspectives of the region's energy demand and supply prospects. Presentations were made by international experts, as well as by representatives from several OPEC member countries from the region. The workshop concluded with a fruitful panel discussion addressing implications for global energy markets and sustainable development in the MENA region.

In his opening address, His Excellency Sheikh Ahmad Fahad Al-Ahmad Al-Sabah, President of the OPEC Conference and Minister of Energy for Kuwait,
said that the populations of MENA countries are rising rapidly and are relatively young; hence, the potential for growth is large and the region offers tremendous economic opportunities. The world’s largest consumers, for their part, can facilitate the development of this potential, by offering stable markets and steady demand for hydrocarbons from MENA countries, through the removal of unnecessary impediments, duties and taxes.

However, HE Al-Sabah told the meeting that despite having some of the world’s largest oil producers and possessing almost three-quarters of global oil reserves, this region has not received the attention it deserves from planners, industry observers and international agencies responsible for ensuring balanced world economic growth.

Claude Mandil, Executive director of the IEA, said in his address in the opening session that there is a growing interdependence between the world’s major energy consumers and the energy producing countries in the Middle East and North Africa. “The world is becoming more and more reliant on the vast, low-cost energy resources of the region. The timely development of these will benefit both parties in the producer-consumer relationship. For consuming countries the benefits are obvious: economic development cannot be achieved without energy and cannot be sustained unless the energy supply is secure. From the producers’ side, development of their energy resources has the potential to act as a driving force for growth, stability and prosperity.“

Dr Adnan Shihab-Eldin, acting for the Secretary General of OPEC, said that the MENA region is very important from two distinct perspectives. "It is, of course, a region containing much of the world’s proven reserves of oil and gas, and it will, therefore, play a central role in future world energy supply. To this end, oil prices must be at sufficiently robust levels to support the required investment, the magnitude of which will not be dissimilar to what has occurred in the past.

Moreover, Dr Shihab-Eldin said that the investment challenge will be complicated by uncertainties which we must seek to minimise through continued cooperation and dialogue. "However", he added, "at the same time as assessing the energy prospects, we should not lose sight of the very important alternative — and connected — focus of attention of the workshop. This relates to the socio-economic needs of the region and the role that the international community can and should play in supporting them."

The IEA’s Chief Economist, Dr Fatih Birol, added “the lessons learnt during today’s workshop will provide valuable input for the World Energy Outlook 2005 which will examine the medium to long-term energy prospects throughout the Middle East and North Africa and draw implications for world energy markets.“ The World Energy Outlook 2005, the next edition in the IEA’s flagship series, will be released in November.

Continued strengthening of cooperation and active dialogue between OPEC and the IEA is recognised as an important element in improving the understanding of the concerns of all parties and is in line with the clear mutual interests of supporting oil market predictability and stability. A fourth joint OPEC/IEA workshop, which will focus upon the oil demand outlook, is planned for 2006, and will probably be hosted by an IEA country.

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