Issue No.587
Economy
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23 -29 May 2002 Issue No.587 Economy |
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| Published in Cairo by AL-AHRAM established in 1875 | Recommend this page | ||
Power-broking Arab energy
Embargoes, competition and the environment: Jasper Thornton was at the seventh annual Arab Energy Conference
Tall metal gates guard the way to the broad asphalt path that leads to the Cairo International Conference Centre. Spick, white-uniformed guards challenge you as you make your way to the main building, its vast geometry crouched like some monstrous spaceship on a rim of bright grass. Through security, oversized figures from Egypt's past glare down from white-washed walls at the mere human-sized visitor.
It was a fitting venue for the 7th Arab Energy Conference. Co-hosted by the Arab League and the Organisation of Arab Petroleum Exporting Countries, the great and the good of Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria and the United Arab Emirates gathered at the centre to mull over the world's energy future.
There was plenty for them to discuss: Egypt's declining output; trouble in the occupied territories; Iraq's embargo. The first issue was dealt with summarily. Egypt's petroleum minister, Sameh Fahmy, announced that the fall in Egypt's output would be reversed. "We are working on increasing Egypt's wealth of natural gas and oil, both on a production level and the size of reserves," he said. His mention of oil and gas in the same breath was significant. Egypt's crude oil output has fallen from 922,000 barrels a day in 1996 to 680,000 barrels in late 2000. Although recent exploration has been successful, it is widely known that Egypt's energy future will come from its large reserves of natural gas. Exploration has confirmed over 60 trillion cubic feet of proven reserves, and earlier this year Egypt signed a deal to provide 30 per cent of French company Gaz de France's gas needs each year.
The two other main issues, violence in Palestine and Iraq's embargo, are related, and again the delegates had plenty to say. At the beginning of April, Saddam Hussein announced that Iraq would embargo countries that passed oil on to the US, including the Gulf states and the European Union, in the hope that pressure would flow down on Israel to end its maltreatment of the Palestinians. An Iraqi official based in Cairo told Al-Ahram Weekly that the intention was to force the US economy to unravel. He added "We don't want to hurt Europe's economies, but press them into helping the Palestinian cause." Yet these hopes have quickly shrivelled, for the embargo has had scant effect, either political or economic. Analysts point out that the world has more than enough slack capacity to counter Iraq acting alone. At the conference, Egyptian Prime Minister Atef Ebeid, reading a statement on behalf of President Hosni Mubarak, announced that Egypt, at least, was not about to join Saddam. "We tell the whole world that we respect oil consumers and endeavour to provide stability to their economies."
There was some dissent, the Iraqis maintaining that economic stability was not the point. "Oil is [an instrument] of national policy that counters US hegemony," countered undersecretary at the Iraqi oil ministry, Saddam Hassan. Arab League Secretary-General Amr Moussa steered carefully, venturing that producers have the right to "insist on... a policy that establishes a just peace, ends a killing, aggression and bloodshed, and does not protect, as is happening now, Israel in its racist and imperialist aggression against Palestine and Palestinians," but he stopped short of naming moves that might result from those "insistences" not being met. The topic was timely, as at the start of the week, Iraq had opened its oil spigots again, complaining loudly about the timorousness of other producers.
Besides the keynote speakers, the conference gave a platform to CEOs, environmentalists, undersecretaries, experts and talking heads of various stripes. Some addresses concern Egypt particularly. On the second day, a speech was read out by the Qatari delegation, detailing their natural gas ambitions, which threaten to throw Egypt's own hopes in the shade. The speech revealed that the Arab region holds 25.7 per cent of the world's gas reserves, yet contributes only eight per cent to world supply. The listeners were then led through Qatar's detailed plan to produce up to 18 billion cubic feet a day from its huge North gas field, through pipelines, liquid natural gas and gas to liquids. World demand for gas is expected to double by 2020, but the scale of Qatar's ambitions reveal the ferocity of the competition that Egypt faces in winning European markets.
Andrew Spiers of Chemsystems told of his optimism for the Arab Petrochemical industry, despite the sluggish growth of the energy industry lately, saying he expected a global upturn soon. Daoud André of the EU outlined some of the environmental concerns that energy producers should consider. But he concluded on what must have been a bright note for producers: "All sorts of high tech solutions to energy conservation will flourish. But the last drop of oil will be used in a car," he said. Which seemed a fitting postscript in such a modernist venue.
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