The immediate past Secretary General of the Organization of Petroleum Exporting Countries (OPEC), Muhammad Barkindo, died late on Tuesday few hours after announcing his impending exit from office at the end of this month.
Barkindo who served in that capacity since August 1,2016,told a global oil and gas audience at the 21st Nigerian Oil and Gas Conference and Exhibition in Abuja that would be handing the reins of office in three weeks time.
“At the end of this month, I will hand over the baton as Secretary General to my brother and friend, Haitham Al-Ghais of the State of Kuwait. He is a seasoned veteran of the oil industry and an astute diplomat who has dedicated himself to OPEC for many years,” Barkindo told delegates and participants at the conference at the International Conference Centre, Abuja.
He was delivering delivering the keynote address to declare open the four days Conference.
In his address, which has turned out to be his valedictory speech, Barkindo reviewed the oil market and the challenges thrown up since the outset of the COVID-19 pandemic,particularly the funding challenges the industry is facing in Africa and globally.
The former NNPC boss took time to examine several policies impacting investment in the sector and drew attention to some milestones in Nigeria by the present administration to attract new investments.
He described the passage of the Petroleum Industry Bill into law more than a year ago as a ground-breaking achievement following many years of hard work.
He expressed confidence that the implementation of the Petroleum Industry Act would help unlock the full potential of our petroleum industry, strengthen its ability to attract long-term investment, and support a dynamic and diverse economy.
If Nigeria’s national oil companies were to continue to innovate and flourish, he said it was importance for them to have predictable and unfettered access to investment capital.
Regular Investment at adequate levels, he pointed out, was the lifeblood of the Nigerian oil industry, stressing the need to develop new technologies, strengthen human capacity and remain leaders in innovation to meet the world’s growing need for energy, shrink overall
environmental footprint, and expand access to underserved communities.
He lamented the challenges the industry was now facing which have threatened investment potential in the short and the longer term, declaring that the oil and gas industry was “under siege”.
“For starters, the evolving geopolitical developments in Eastern Europe, the ongoing war in Ukraine, the ongoing COVID-19 pandemic and inflationary pressures
across the globe have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity
markets, more importantly, in the world of energy,” he said.
Consequently, he said a number of industrialized countries and multilateral institutions have continued to pursue stringent
policies to accelerate the energy transition and fundamentally altering the global energy mix.
He urged Nigeria and Africa to look beyond the transition and not to forget that their industry was still reeling from the enormous investment losses of recent years.
Drawing attention to the two major cycles that have have hit the world in recent times, namely the severe market downturn in 2015 and 2016, and the impact of the COVID-19
pandemic, Barkindo said during the first year of the pandemic in 2020 described as one of the darkest periods in the history of oil, upstream oil capital expenditure fell by around 30 percent.
This, he said, exceeded the colossal 26 percent annual
declines experienced during the severe industry downturn in 2015 and 2016.
Again, he said OPEC’s most
recent World Oil Outlook gave an inkling on the expected, showing that the global oil sector would need cumulative investments of $11.8 trillion in the upstream,
midstream and downstream through to 2045 to meet expectations for significant growth in energy demand.
On demand, he said the only way to go would be up, adding that OPEC projects that total primary energy demand would expand by about 28 percent between now and
2045, with oil expected to retain the largest share of the energy mix, accounting for just over a
28 percent, followed by gas at about 24 percent.
Despite the quest for energy transition, he said oil and gas together would continue to supply more than half of the
world’s energy needs for many decades.
“These hydrocarbons are especially vital to the energy mix in regions like Africa, which will
see massive population shifts and economic growth in the coming years. These developments increase the urgency of eradicating energy poverty,” he said.
The impacts of the two major market cycles, he said, were manifesting in real time, with years of underinvestment in the oil sector highlighting the current market tightness and thin spare capacity margins, the worse in OPEC’s 62-year history.
He expressed fears that if this trend continues, it could haunt the oil industry in the future, adding that unlocking resources and strengthening capacity could remedy the situation if oil produced by the Iran and Venezuela were allowed to return to the market.
The oil industries of the two leading producers, he observed, have been held hostage by geopolitics, while Libya has faced internal challenges that have at times sharply curbed its exports.
Regardless, he said the
disruptions affecting these three OPEC Member Countries not only contribute to the current market tightness, but directly affecting their welfare and development.
Returning to normal operations
and restoring production capacity, especially in countries that have endured restrictions on investment and exports, he said, takes time, considering the need to mobilise technology, logistics and capital.
Despite significant decline in downstream industry capacity in recent times, Barkindo expressed the hope that the construction of the Dangote refinery in Lagos, expected add about 650,000 barrels per day, would boost Nigeria’s longer-term demand challenge and significantly improve the capacity outlook of the global downstream sector.
He said the need to ensure predictable investment was one reason OPEC and its non-OPEC allies agreed in December of 2016 to work together to address the widening market crisis at the onset of
Noting the significant support of African producing countries, both OPEC and non-OPEC Members, to restore sustainable stability to the global oil market, Barkindo said he was optimistic that the cooperation would continue beyond August, with fragmented and new regional alignments emerging to threaten years of progress towards creating a more stable and interconnected energy system.
“We cannot afford to allow multilateral energy
cooperation and global energy security become collateral damage of geopolitics,” he warned.
With the growing clamour against the impact of climate change, he said developing countries were urged to turn their backs on their own hydrocarbon assets, even though their right to sovereignty over the use of these natural resources was carved in the Paris Agreement’s principle of equity in the context of sustainable development.
Describing as unfortunate and unwise attempts to encourage divestment in the Hydrocarbon industries, Barkindo condemned recent pronouncement by the UN Secretary-General, António Guterres, urging the global industry to ignore its responsibility to address the climate change
Urging global leaders to return to the roots and principles of
the Paris Agreement, by focusing on inclusive, party-driven negotiations and decision-making based on the science and data, not emotions and rhetoric, he said this was the only way to avoid another global crisis.
He said the world should use the next COP27 scheduled for Egypt later this year, to work towards a return to a balanced and holistic
process to address critical issues such as adaptation, mitigation and the means of implementation, especially climate finance
Barkindo who used the occasion to announce his pending exit from office as the 28th Secretary General of OPEC, thanked President Muhammadu Buhari for the opportunity
“Excellencies, ladies and gentlemen, When I first became Nigeria’s delegate to OPEC in 1986, little did I know that I would end up as its Secretary General 30 years later. I will forever be grateful to President
Muhammadu Buhari for sending me to OPEC to serve as its 28th Secretary General, it gratifying that I continue to enjoy his full
support and advice and Guidance throughout my tenure, I drank from its Fountain of wisdom and reservoir of knowledge of OPEC,
being the only president in the world currently to serve as Minister of Petroleum and Head of Nigeria’s delegation to the Organization.
“Serving as Secretary General of OPEC for two terms has been the honour of a lifetime.
Over the past six years, we have witnessed both challenging and historic moments, which
have underscored time and again the importance of cooperation and teamwork. It
has also been a source of pride to see African oil-producing countries becoming more prominent on the global energy stage, not only in OPEC, but through organizations like the Gas Exporting Countries Forum and International Energy Forum with whom we
share many members in common.
“Together with my very able colleagues at the secretariat in Vienna, and our member
countries including those in the declaration of cooperation framework, turn a historic page
and wrote several glorious chapters of our industry in the last six years.
“At the end of this month, I will hand over the baton as Secretary General to my brother and friend, Haitham Al-Ghais of the State of Kuwait. He is a seasoned veteran of the oil industry and an astute diplomat who has dedicated himself to OPEC for many years.
As we move on to a new chapter, we can take comfort in knowing that OPEC and its Member Countries will continue to devote themselves to the core principles of its statute,
support a stable and secure energy future for the benefit of producers, consumers and the
global economy. The best is yet to come for OPEC, for Nigeria, and for this greatindustry. Thank you,” Barkindo said.
Sadly, Barkindo did not live to fulfill his dream of handing over to his successor at the end of the month, as he died a few hours after delivering the speech in Abuja.
An indigene of Yola, Adamawa State, norn on 20 April 1959, Barkindo served as OPEC Secretary General from August 1, 2016 until his death.
Until his appointment, he served as Acting Secretary General of the organisation in 2006, representing Nigeria on OPEC’s Economic Commission Board between 1993 and 2008.
He was also the Group Managing Director of the defunct Nigerian National Petroleum Corporation between 2009 and 2010, as well as head of Nigeria’s technical delegation to UN climate negotiations since 1991.
He attended the Ahmadu Bello University, Zaria, and the Southeastern University, Washington, D.C., USA. He was aged 63 years.