Manamah, Kingdom of Bahrain – Thursday 19th November 2015: Energy and financial sector experts gathered at the APICORP Energy Forum in Bahrain, held under the patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa, have said that subsidy reform and further diversification are the most critical elements in overcoming the current squeeze on government revenues resulting from a sustained period of lower oil prices.
Asked during a live polling session how oil exporting countries can best deal with lower revenues, 45% of the delegates stated diversification, followed by 34% who favoured subsidy reform. Only 16% thought spending cuts is the preferred option.
Over 350 delegates attended the APICORP Energy Forum, with speeches and contributions from three regional energy ministers, including H.E. Eng. Ali bin Ibrahim Al-Naimi, Saudi Arabia’s Minister of Petroleum and Mineral Resources, H.E. Dr. Abdul Hussain bin Ali Mirza Minister of Energy for the Kingdom of Bahrain and H.E. Eng. Tarek El Molla Egypt’s Energy Minister.
A slim majority of delegates, 53%, voiced confidence that OPEC’s policy of maintaining production levels, in order to maintain market share, would work. 22% stated it would not work.
91% expressed a view that the Brent oil price will remain below $70 for the coming 12 months. While only 1% predicted that the price per barrel would exceed $100 by this time next year.
Industry attendees were largely split on the impact falling oil and gas prices are likely to have on investments in renewables and the global energy mix. Twenty four percent said volatile prices would force governments to seek alternative energy sources, 36% predicted investments in renewables would fall, and 40% predicted governments would take a long view on investment and not change their investment plans.
Commenting on the Forum, Dr Aabed Al Saddoun, Chairman of APICORP said:
“The APICORP Energy Forum is a unique occasion and an opportunity to hear from a mix of critical energy stakeholders and experts. We have policy makers in the same room as bankers and finance professionals, researchers and analysts, and private companies and investors. Their views and actions are partly what move the energy markets.
“A key takeaway from the Forum is that while there is widespread acknowledgement that there are serious challenges facing the global energy industry, there is also an abundance of optimism and positivity about the sector’s future in this region. Investments in infrastructure, skills and technology are always important and must continue. APICORP is here to help enable these investments.”
APICORP is a multilateral development bank established to foster the development of the Arab world’s oil and gas industries.