3.37 AM Monday, 15 July 2024
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 04:10 05:35 12:28 15:50 19:15 20:39
15 July 2024

Transparency must for oil market

By Staff

Arab oil producers believe data transparency in the hydrocarbon sector, including reserves, output and capacity, will help stabilise in the market, tackle future challenges and end discrepancy in market reports.

“The worldwide energy industry is facing at present and in the future outlook to a multitude of challenges, seeking to increase transparency in petroleum data. This will help proper decision-making and will achieve the desired advantage in the world oil market equation,” said the Kuwaiti-based Organisation of Arab Petroleum Exporting Countries (Oapec), which groups 10 Arab oil producers.

“The access to accurate data is essential in all phases of the oil industry operations. That goes from the size of the investment required in upstream, passing by the estimated and real capacities of crude oil production, the size of proven and recoverable and geological reserves,” it said in an article in its monthly bulletin.

The report said it believes this also works in the hydrocarbons supply and demand and inventories trends. In this field, it added, some divergences are often noted in oil data between specialised international statistical bulletins.

These variations are due to several reasons like those belonging to the sources data (whether it is provided by NOCs or IOCs), as well as the statistical method used to estimate reserves, production, consumption, inventories and investments.

“For instance, to estimate the oil reserves, two visions are used.

Firstly the economic foresight in which only the annual discoveries are taken in consideration, they are seen like a reserve increase.

Secondly, the geological foresight in which the discovered quantities are added to the field estimated reserves,” it said.

Oapec said variety of emerging events affects the oil demand and supply and consumption in the short term, including weather changes, geopolitical factors, daily stock markets speculations, and technical operations.

In the long term, energy policies, population growth, technological progress in the major consuming countries play a significant role in influencing the future pattern of energy consumption, especially in the transport and electricity generation sectors, it added.

“Policies adopted in both sectors largely determine the demand trends for oil and natural gas in the future,” said OAPEC, which controls nearly 700 billion barrels of proven crude deposits, more than half the world’s oil wealth.

It noted that since the outset of the first decade of the 21st century, global oil market witnessed intensive efforts by different parties to promote and foster the dialogue among oil exporting, producing, and consuming countries.

It said energy data transparency has been one of the fundamental themes in the interactive meetings of the Riyadh-based International Energy Forum IEF).

“It is expected that the collaboration among international organizations to support and provide compatible up-to-date statistical data at the international level will help IEF to achieve its pledges…..such support would serve the interest of producing and consuming countries, on one part, and alleviating surprises in the oil market, on the other part,” it said, adding that more than ninety countries participate in the IEF’s “Jodi oil initiative”  representing almost 90 per cent of global oil trade.

OAPEC said gas exporting and consuming countries are also involved in efforts to achieve transparency in the international gas markets.

It referred to the “2nd Gas Data Transparency Conference” organized by the IEF in Doha, Qatar in May 2012, with the participation of more than 30 countries, which discussed the expansion of “JODI-OIL” data initiative to cover gas data, as a permanent initiative to be called “JODI-Gas”.