Oiling
relationships
As the price of crude rockets, Noe van Hulst, Secretary
General of the International Energy Forum, speaks to Eithne
Treanor about the challenge of steering greater cooperation
between oil suppliers and consumers.
Photo: getty images
N
oe van Hulst finds himself at
the helm of the world’s only
energy producer-consumer
organisation after 86 countries
approved and signed the IEF charter
in Saudi Arabia at the end of February.
The International Energy Forum (IEF)
has come a long way from its humble
beginnings in France 20 years ago and
on the occasion of its anniversary, van
Hulst has the task of leading it to the
next level.
There was a time when consumers,
represented by the IEF, did not enjoy
a civil or productive dialogue with
producers and OPEC members. The
IEF has been instrumental in changing
this situation and facilitating a more
informed, frank and sincere dialogue.
“There is a new cooperation between
80 / MAY 2011
the producers and consumers, the IEA
(International Energy Agency), IEF and
OPEC,” says van Hulst. “It’s a new era of
international energy governance.”
It’s that type of governance that will
lead to a more open willingness to help
understand the differences and the issues
between producers and consumers. Van
Hulst adds the main goal is to “reduce
volatility and uncertainty and thus
improve stability” in the oil market.
With a background in economic affairs
and energy, and having worked for the
IEA earlier in his career, van Hulst is
acutely aware of the need for closer
cooperation between all parties.
The Saudi Arabian petroleum
minister Ali Al-Naimi says the IEF
Charter represents a cooperation in
the energy sector, “for the benefit of
future generations.” And van Hulst
adds that, “more transparency in the
market is vital for improving energy
security for producers and consumers.”
The political will demonstrated by 86
countries that represent 90 per cent of
global oil and gas supply and demand
will certainly help foster greater mutual
understanding on energy policy issues.
Van Hulst hopes it will also serve to
build trust in policy intentions.
The supply and demand global
projections from both OPEC and the IEA
are much closer for 2011 than they’ve
been before. “This paints a market
situation in 2011 characterised by a high
level of spare capacity, in both upstream
and downstream; relatively high OECD
commercial inventories, and an expected
slowdown in oil demand growth
Profile
compared to 2010,” van Hulst says.
Of the long-term, he says: “There is a
consensus that oil will likely remain the
main fuel to satisfy the world’s energy
needs for the foreseeable future, and
that oil resources, both conventional and
non-conventional, are sufficient to meet
future demand.”
As a word of caution, he adds the
industry must always watch for shifts in
energy and environmental policy, as well
as uncertainties in relation to economic
growth and technological change. The
shared analysis of future energy trends
is extremely important to all players in
the energy sector.
“Sometimes the divergences in energy
outlooks between different agencies are
not as well understood by market players
as one might hope, thus giving rise to
additional uncertainty and volatility,”
says van Hulst.
The IEA, IEF and OPEC jointly
organised a symposium in Riyadh in
January 2011 on the shared analysis of
energy market trends and short and longterm outlooks. All parties also convened
in Paris for an in-depth session with
international and national oil companies,
and attended an Asian ministerial
roundtable in Kuwait city, which will
host the next major symposium and
IEF ministerial gathering in 2012. It’s
clear that the industry is engaged at the
highest level.
As an occasional referee of the
world’s producer-consumer dialogue,
van Hulst knows the arguments on both
sides about rising oil price, supply and
demand fundamentals and sufficient
capacity very well. He does not want
to see a return to 2008 when volatile
swings in oil price caused panic on the
market. High oil prices have certainly
dominated the global economy in recent
months, a situation that’s not ideal.
Van Hulst says: “Excessive volatility of
oil prices, like we experienced in 2008,
is bad for producers and consumers
alike and devastating for investment.”
The IEF plays its role by coordinating
the collection of market data from nearly
“The more market players know what is
going on in a timely manner, the more
informed their decisions and the less room
there is for unfounded speculation.”
all of the oil producing and consuming
countries to help transparency and
investment decisions through the Joint
Organisations Data Initiative (JODI).
This is truly a global effort with input
from Asia, the EU, Latin America and
the UN Statistics Division.
“The more market players know
what is going on in a timely manner,
the more informed their decisions and
the less room there is for unfounded
speculation,” says van Hulst.
As long-term global energy demand
is set to increase over the coming
decades, van Hulst recognises that
alternative and renewable energy starts
from a very low base. “Even though
it is growing rapidly, we will still see
fossil fuels dominating the global energy
mix for decades to come,” he says.
GULF BUSINESS / 81
Profile
While always realising the need for more
clean energy, the IEF focuses on energy
security of both supply and demand, and
the links between energy, the environment
and economic development. Of even
greater importance will be that energy
becomes accessible and affordable to a
larger share of the world’s population.
Population growth and higher living
standards in developing countries all
contribute to the long-term energy
demand growth, a reality that will put
pressure on existing supplies.
“We need more of all energy sources,
both fossil fuels and renewable energy
– including nuclear,” he says, adding
there are still issues with the practical
roll out of renewable energy sources and
that “technological breakthroughs will
be needed to overcome these barriers
to further large-scale deployment of
renewable energy.”
Noe van Hulst (L) speaks to reporters as asssistant to the Saudi Minister of Petroleum Prince Abdulaziz
Salman bin Abdulaziz Al-Saud listens.