OPEC’s Barkindo: rebound in oil investments ‘very minimal’

Mohammed Barkindo, above, commended the cooperation of oil producing countries to curb imbalances between production and demand. (AFP/File)
Updated 17 March 2019
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OPEC’s Barkindo: rebound in oil investments ‘very minimal’

  • OPEC Secretary General said greater US cooperation in the industry would be welcomed
  • Saudi Aramco CEO said the industry needs to invest over $20 trillion over next 25 years to meet expected demand

BAKU: The investments needed to ensure stability in the global oil industry are returning after a downturn, but the pace is still slow, OPEC Secretary General Mohammed Barkindo said.
Barkindo was talking to Reuters and an Azeri TV station Real on the sidelines of an OPEC and non-OPEC monitoring committee, which is meeting this weekend in the Azeri capital of Baku.
He also said leading oil producing nations have made significant achievements in terms of cooperation and efforts to avoid imbalance between the supply and demand on the global oil market.
Barkindo added he would welcome greater engagement with the United States to tackle industry issues.
According to estimates from Saudi Aramco Chief Executive Officer Amin Nasser last year, the global oil and gas industry needs to invest more than $20 trillion over the next 25 years to meet expected growth in demand and compensate for the natural decline in developed fields.
“A number of challenges are arising from the down cycle that we have seen, and at the top of that list is an issue of investments. We have seen investments contract for couple of years and even at the moment the rebound is very, very minimal,” Barkindo said.
“For the long cycle projects, which are the base for the global economy, the picture is still not encouraging. Therefore we welcome the United States to join us in this global energy dialogue to address this and other issues affecting this industry.”
The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia have agreed on joint efforts to curb their oil production in order to restore the balance on the global oil market and support the price.
The first such deal was signed at the end of 2016 in Vienna.
“We remain on course and we have made significant progress in ensuring that we do not allow the market to return to an imbalance,” Barkindo said, speaking in English. “All participating countries are committed to ensuring that supply and demand remain balanced through stock movement that would remain within the five-year industry average,” Barkindo added.
“That remains our key metrics in assessing the state of the oil market and so far so good.”


Energy giants spent $1bn on climate lobbying, PR since Paris: watchdog

Updated 23 March 2019
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Energy giants spent $1bn on climate lobbying, PR since Paris: watchdog

  • Firms under pressure to explain how greener laws will hit business models

PARIS: The five largest publicly listed oil and gas majors have spent $1 billion since the 2015 Paris climate deal on public relations or lobbying that is “overwhelmingly in conflict” with the landmark accord’s goals, a watchdog said Friday.
Despite outwardly committing to support the Paris agreement and its aim to limit global temperature rises, ExxonMobil, Shell, Chevron, BP and Total spend a total of $200 million a year on efforts “to operate and expand fossil fuel operations,” according to InfluenceMap, a pro-transparency monitor.
Two of the companies — Shell and Chevron — said they rejected the watchdog’s findings.
“The fossil fuel sector has ramped up a quite strategic program of influencing the climate agenda,” InfluenceMap Executive Director Dylan Tanner told AFP.
“It’s a continuum of activity from their lobby trade groups attacking the details of regulations, controlling them all the way up, to controlling the way the media thinks about the oil majors and climate.”
The report comes as oil and gas giants are under increasing pressure from shareholders to come clean over how greener lawmaking will impact their business models.
As planet-warming greenhouse gas emissions hit their highest levels in human history in 2018, the five companies wracked up total profits of $55 billion.
At the same time, the International Panel on Climate Change — composed of the world’s leading climate scientists — issued a call for a radical drawdown in fossil fuel use in order to hit the 1.5C (2.7 Fahrenheit) cap laid out in the Paris accord.
InfluenceMap looked at accounts, lobbying registers and communications releases since 2015, and alleged a large gap between the climate commitments companies make and the action they take.

 

It said all five engaged in lobbying and “narrative capture” through direct contact with lawmakers and officials, spending millions on climate branding, and by employing trade associations to represent the sector’s interests in policy discussions.
“The research reveals a trend of carefully devised campaigns of positive messaging combined with negative policy lobbying on climate change,” it said.
It added that of the more than $110 billion the five had earmarked for capital investment in 2019, just $3.6bn was given over to low-carbon schemes.
The report came one day after the European Parliament was urged to strip ExxonMobil lobbyists of their access, after the US giant failed to attend a hearing where expert witnesses said the oil giant has knowingly misled the public over climate change.
“How can we accept that companies spending hundreds of millions on lobbying against the EU’s goal of reaching the Paris agreement are still granted privileged access to decision makers?” said Pascoe Sabido, Corporate Europe Observatory’s climate policy researcher, who was not involved in the InfluenceMap report.
The report said Exxon alone spent $56 million a year on “climate branding” and $41 million annually on lobbying efforts.
In 2017 the company’s shareholders voted to push it to disclose what tougher emissions policies in the wake of Paris would mean for its portfolio.
With the exception of France’s Total, each oil major had largely focused climate lobbying expenditure in the US, the report said.
Chevron alone has spent more than $28 million in US political donations since 1990, according to the report.
AFP contacted all five oil and gas companies mentioned in the report for comment.
“We disagree with the assertion that Chevron has engaged in ‘climate-related branding and lobbying’ that is ‘overwhelmingly in conflict’ with the Paris Agreement,” said a Chevron spokesman.
“We are taking action to address potential climate change risks to our business and investing in technology and low carbon business opportunities that could reduce greenhouse gas emissions.”
A spokeswoman for Shell — which the report said spends $49 million annually on climate lobbying — said it “firmly rejected” the findings.
“We are very clear about our support for the Paris Agreement, and the steps that we are taking to help meet society’s needs for more and cleaner energy,” they told AFP.
BP, ExxonMobil and Total did not provide comment to AFP.

FACTOID

$ 28m

Chevron alone has spent more than $28 million in US political donations since 1990, according to the report.