Oil is still going to be king in 2020, say UAE & Qatari oil ministers

"Oil will continue to play a very strong role. There will be more need for oil," stated HE Abdulla bin Hamad Al Atiyah, Second Deputy Prime Minister and Minister of Energy & Industry of Qatar.

UAE Minister of Energy, HE Mohammed Al Hamli, stated that: "The future is very much for oil. Oil will be dominant in 2020."

Speaking during the third session on 'Energy in 2020 - the Future of Oil and Gas', Al Hamli pointed out that demand for oil is forecast to grow by 1.7 per cent from now until the year 2020.

The Arab oil ministers' comments were supported by Lord Howell of Guildford, former UK Energy Secretary. "Demand for oil will go roaring onwards. There may be hiccups, but it will go on," he said.

Lord Howell said that the scenarios that were being presented by analysts were much too gloomy. "I believe the possibilities are increasing and are very positive. China has been drinking oil. It has just started. The same applies to India. We haven't even started on the growth in demand in these areas. The USA continues to drink oil at enormous rates," Lord Howell pointed out.

Non-OPEC sources
He saw a bright future for oil for several reasons. The former UK Energy Secretary pointed out that the risk is very high and costs are every high for non-Arab or non-Opec (Organisation of Petroleum Exporting Countries) sources of oil. The alternative sources of energy scene, too, is not working. "Instead of carbon emission falling, they are actually going up and alternatives to fossil fuels are not doing too well."

Lord Howell told the delegates that oil is in Arab hands and so is the potential. They have to make the best or it. They have to govern well or they would frighten away the investing public and let extremists in. He also urged the oil producers not to look for EU-style unity as the European Union still is faced with 90 million unemployed. He suggested greater stress on education.

Clever use
"You have to be clever in using the fantastic opportunities," Lord Howell said.

UAE Energy Minister Al Hamli pointed out that most of the oil in the world is more or less discovered by now. "I can't see more giant oil fields being discovered. Now we are looking to better the recovery rates and arrest the depletion in reservoirs. In some of the old giant fields, the rate of depletion is as high as close to 15 per cent."

Al Hamli said Opec has been doing well. "Opec, actually, is excellent when it comes to crises management. We have seen the prices go down to about US $8 per barrel. Opec worked very hard to bring it up. Opec is responsible and wants to continue to supply the consuming countries.

"The consuming countries also do not want the prices to fall too low as they want to see Opec invest in building more capacity," Al Hamli explained.

The session was moderated by Hussain Sultan, Group Chief Executive & Board Member of Emirates National Oil Company (ENOC) Group of the UAE. Other participants included Dr. Adnan Shihab El Din, Research Director for Opec and Mustapha Muhtaram, Chief Economist for General Motors.

The Arab Strategy Forum has six Organising Partners and two Media Partners. They are Emirates National Oil Company Ltd (ENOC), Abraaj Capital, PricewaterhouseCooper, DaimlerChrysler, National Bank of Dubai and Gulf News, in addition to Media Partners Al Sharq Al Awsat and CNN. The Arab Strategy Forum will provide valuable insights, which will help in improving the status of the Arab World.