Director of the International Federation of Oil and Gas Producers: A great opportunity for gas-rich countries such as Egypt and North Africa to compensate Europe for Russian gas.

By: Shaban Hadia- Habiba Gamal

Egypt respects the foreign partner, has a stable environment for foreign investment in the oil and gas sector, and is ready to implement plans to reduce carbon emissions.

Adjusting energy markets hinges on stopping Russia’s war in Ukraine

Oil and gas companies are spending billions on reducing emissions and clean production.

The age of fossil fuels in the markets is not over yet and will continue for at least 30 years as a basic energy resource.

Recent weeks have shown a heated battle between many parties, led by the Secretary-General of the United Nations, Antonio Guterres, who considered oil and gas companies “greedy” and called on governments to “impose a tax on these exorbitant profits” and considered that the gains achieved by these companies, as he described it, “immoral.

” That oil and gas companies are making record profits from this energy crisis at the expense of the suffering of the poorest people and communities, and at a terrible cost to the climate.”

US President Joe Biden also accused major oil companies of exploiting the recent energy resource crisis for profit, calling for a large tax increase on corporate stock buybacks to direct them to invest more in production, describing the matter as “obscene”.

Even civil society organizations and some organizations interested in the environment considered that burning fossil fuels is the main cause of global warming and that it is the first responsible for exceeding the world by 1.5 degrees Celsius, so that major banks and international financial unions decided not to finance new fossil fuel projects, and many obstacles and accusations It has recently begun to escalate against oil and gas companies as “the cause of the global environmental catastrophe”.

Therefore, it was important to hear the opinion of the international body responsible for the largest number of major oil companies, and to know their position on these calls, especially since the upcoming climate conference in Dubai – one of the countries in which oil and gas production forms the largest basis for the national product – has also spread Western campaigns against the president Climate Summit Sultan Al Jaber as coming from an oil background and responsible for the first national oil and gas company in the Emirates.

This was the dialogue with Iman Hill – Executive Director of the International Federation of Oil and Gas Producers (IOGP), which is a union that includes in its membership 90 companies and entities of oil and gas producers, led by the five major multinational companies, in addition to 25 local oil companies, and some entities and small companies.

The first and last message of Eman Hill is that the age of fossil fuels has not ended yet, and companies are not responsible for disasters, but they are working to meet the global demand for energy, and investment in fossil fuels will not stop as long as renewable energy sources do not meet the scientific demand for energy.
It considers that the recent global energy crisis and the confusion of markets and prices are due to the war in Ukraine, and by stopping this war, markets can return to normal.

But it focuses on a very important angle, which is that Egypt and some North African countries have a golden opportunity to be an alternative to Russian gas to supply Europe with energy, and this would achieve many gains for these countries.

And a lot of information in which they explained Iman Hill about the vision and future plans, especially with regard to the research and investment strategy in technologies for reducing emissions such as carbon capture and storage and reducing methane emissions, so that it is considered that the union has the credit for changing the production path to a safer and cleaner production during the last decade, and spends On related research that contributes to reducing emissions by billions of dollars… and other information in our following dialogue:

When will the world stop producing fossil fuels?

It should be noted that there is a difference between the Global North and the Global South with regard to energy transition and the transition to clean energy. Both worlds do not have the same conditions, knowing that the energy transition is a complex process that requires years of work.

And those who demand an end to oil and gas production do not realize that stopping production will not benefit society as a whole, because it will constitute an obstacle to economic growth in all countries of the world.

There is a need for electricity in the world and for the operation of factories, hospitals, schools and all life facilities, as well as the operation of equipment, so from where will this be done if companies stop?

About the production of the basic engine fuel for these equipment and these sectors?

It is not possible to dispense with fuel once without providing alternatives, and these alternatives, whether renewable energy or other sources, will take a long time to establish their position and fully provide for the energy needs of societies and industries.

There must certainly be plans for a gradual cessation, and this will take at least 20-30 years for a complete transition to renewable energy.

Not all countries have the same level, capabilities and conditions, and new energy projects, whether solar energy, wind energy, or other types of energy. Renewables are not going fast enough to meet the global demand for energy.

So I expect that the complete transition to clean energy will not take place until after at least thirty years, and this is of course an estimate based on the facts and policies currently available.

 Does this apply to natural gas?

Natural gas is by nature a partner or one of the transitional stages to clean energy. Therefore, many projects and companies are developing strategies to build systems for using natural gas as a transitional stage, and its duration may be long, and it currently represents 40% of the energy sources used.

Oil and gas companies are in the crosshairs of international accusations

= There are those who accuse companies of greed, whether the Secretary-General of the United Nations or the American President, after they made huge gains that exceeded 200 billion dollars for major companies, so have oil and gas companies become the “monster” hated by everyone?!

I will not respond to the US President or the Secretary-General on behalf of the member companies of the federation, because our policy contradicts that and every company has the right to respond to that, but in my personal opinion, the oil companies are now meeting the world’s energy needs far from Biden’s claims of greed and greed, the Russian war In Ukraine, it caused great confusion in the global energy markets, especially since the countries of Europe depend too much on Russian fuel and gas, and this is the first reason for the oil companies to achieve some gains, as they did not seek to disrupt the market, but the geopolitical conditions are the main reason for what they have reached.

Matter of fact, the oil companies are not the “monster” nor are they the bad side of the equation.

The lesson here must be for the future that governments do not depend on one party or one party to supply them with energy, and countries must develop balanced policies in energy supply or obtain energy supplies in order to avoid a crisis like the one in Europe at the present time.

= But some consider that the gains were made from the pocket of the poor and at the expense of the consumer, who paid the price exponentially this year in favor of the companies’ budgets.. Weren’t the companies exorbitant in prices?

The oil companies did not intentionally raise prices, but the policy of supply and demand was the reason for this rise. All the member companies of the federation have investment programs that are contrary to allegations of greed, and what happened was the result of supply and demand politics, and government policies also controlled some decisions or trends in the market. As if limiting dealings or severing dealings with certain companies or entities, this is what violated the equation in the market.

The Russo-Ukrainian War and Power in Europe

= How long do we expect this confusion and global energy crisis to last?

When we find a solution to the Russian-Ukrainian-European crisis, whether by stopping the war or the European Union finding an alternative to Russian gas, the market will regain its balance.

= The European Union set a ceiling for oil prices, while Russia threatened to stop dealing. Who implements this decision? Who is the victim and who is the perpetrator in this scenario?

The European Union took the decision as a punishment for infringement and violation of Ukraine’s rights, but the question here is: Can Europe get rid of Russian dependence?

We have a study in the Union that looked at sources of supply and infrastructure for companies and countries to discuss this question, and the result was that getting rid of European dependence on Russian gas is possible, but it will take time, starting in 2026, and it may start gradually.

Here we say that this is a great opportunity for gas-rich countries such as Egypt and North African countries to be an alternative to Russian gas, to contribute to supplying European countries with gas and energy, and to increase their investments in this sector because it will bring them many gains.

Opportunity Egypt and North Africa

= What are the recommendations made by the union to these countries in order to seize the opportunity and develop gas companies?

If the countries are able to increase production, and provide European countries and companies with the opportunity to obtain gas, then this is a great opportunity in the coming years.

Many of the union’s member companies contribute to investing in Egyptian gas in order to increase production.

= What is your assessment of the position of Egyptian gas production and the opportunity to stop producing fossil fuels in favor of renewable energy sources?

Egypt has always respected the foreign partner, and has created a stable environment for foreign investment in the oil and gas sector.

Under the leadership of President Sisi and the current government, the union believes that Egypt is ready to implement plans to reduce carbon emissions, and Egypt has a large capacity of gas, and its complete cessation of fossil production is especially unlikely. during the next decade.

Union plans to reduce emissions

= Does the Union have a technological plan to reduce carbon emissions?

The union devotes many plans to contain and reduce carbon emissions, including carbon capture and storage technology. The union also focuses on reducing the effects of methane burning.

Methane emissions have great priority and importance in oil and gas projects.

Therefore, we participate in the announced initiatives to get rid of or reduce methane by 2050, including an initiative launched at the Sharm el-Sheikh climate conference.

We also have standards related to energy efficiency and electrification of new projects, and these are currently among the priorities of the federation.

= Are these measures sufficient to extend the term for gas and oil, especially since some Gulf countries are now working on renewable energy?

So that renewable energy can meet the demand for energy in the world, production in fossil fuels will not stop, so directing investment entirely to renewable energy is unrealistic despite its importance, and the talk that some people demand that we leave fuel in the ground, the world has not yet prepared for such a moment Or these decisions, the age of fossil fuels is not over yet.

Investing in green energy does not mean canceling investment in fossil fuels, because in this case, the continuous demand of consumers for energy will not be met.

Banks stop financing polluting projects, not oil and gas production

= There are demands and decisions of international banks that will stop financing fossil fuel projects or any projects that harm the environment, including oil projects.

What are the oil companies’ plans to deal with these decisions?

The policies of some modern banks do not tend to stop investing in fossil fuel companies, but rather stop approving or financing polluting projects or projects that develop extraction mechanisms.

All union companies are currently working on developing extraction mechanisms and equipment to reduce emissions, as well as ensuring that production is clean, not cancelled .

And through you, I want to convey to the world an important message, that the oil companies that are members of the union invest a lot of money for clean production and environmental protection, because oil and gas are not the monster that the media and human rights organisations portray.

Financing fossil fuel projects in Africa and developing countries

= Some see the West as suffering from “schizophrenia in behaviour”, while it rushed to Arab and African countries to come to its aid after the Russian war and some countries returned to coal, at the same time developing countries and Africa in particular are prohibited from investing or financing new production projects of fossil fuels, What do you think?

It is not possible to generalise talk about the plans of the Western world or the developed world to replace energy with the South, and we cannot leave the South and the developing world without economic foundations that compensate for the lack of growth.

Quite the contrary, we must help those countries to develop their projects in the cleanest way and the least harmful to the environment.

Here we recall the goal of the Loss and Damage Fund approved by the COP27 Sharm El-Sheikh Climate Summit, which was set by the international community and the United Nations to compensate for losses and damages in developing countries, as well as what is in line with the policy of the International Federation of Oil and Gas Producers in financing fossil fuel projects in Africa and developing countries.

COP27 and COP28

= What is the federation’s view of the West’s refusal of the heavy participation of oil companies in COP27 and their objection that the president of COP28 “Salat al-Jaber” has a background and is responsible for the oil companies in the UAE?

I am surprised by those who do not want the presence of the owner of the issue, so how will experts, specialists and activists discuss the issue of getting rid of oil and gas production, or cleaning the environment and stopping carbon from those who are not responsible for energy production participating in these discussions, do they want a one-sided dialogue, who will carry out what they say if The stakeholders weren’t there?!

All climate conferences prior to COP27 did not make a significant difference in global carbon production, due to the exclusion of union companies or producing companies with all their production and investment capacities.

I believe that COP28 is a great opportunity to complete the dialogue under the chairmanship of a person who has interest and responsibilities in major companies such as Sultan Al-Jaber.

The only and correct way to talk about the climate is the participation of all parties in a realistic dialogue that puts the issue of supply and demand for energy in the picture and priority when discussing.

= But the world is looking to improve the environment and change the status quo to ensure that global warming does not escalate to more than 1.5 degrees Celsius, so what should it do?

The disposal of fossil fuels must be gradual, not sudden, because clean energy, whether solar or wind, is unable to meet the world’s current energy needs, and there must be investments, as is the case in renewable energy, which is an investment in improving the conditions and environment for oil and gas production.