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    Equatorial Guinea To Pick New Gas Developer: Minister

Summary

After watching the implosion of Fortuna LNG, the petroleum minister wants to entrust its upstream to a safer pair of hands.

by: William Powell

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Equatorial Guinea To Pick New Gas Developer: Minister

Europe's determined approach to cut CO2 emissions is an "inspiration" to other regions, but ultimately it cannot make much of an impression globally unless other regions follow its example, the boss of the International Energy Agency Fatih Birol told NGW on the sidelines of the World Energy Congress in Abu Dhabi September 10.

He said there is a "growing understanding that there is a grave challenge, but I am concerned that there is not enough action to translate this new understanding into reality."  

Europe is different from Africa and India and other countries, he said, that lack political determination. Europe is the "leader in the fight against climate change but it is responsible for only 9% of global emissions," he said. This is important because mitigation measures, such as the substitution of methane with hydrogen and of fossil gas with synthetic gas, and so on, is expensive but it can be offset by larger economies emitting more thanks to heavy reliance on coal, or by natural or manmade disasters and seasonal problems such as forest fires or deliberate deforestation.

On the other hand, there is a certain amount of over-simplification of the issues: the older gas-fired plant can be dirtier than the newest, super-critical coal-fired plant. But he said that one should not mix the youth voices in Europe calling for drastic measures with the concerns of India and Bangladesh, where a middle class is arising which has "many other preoccuptions" such as eliminating poverty.

Birol said the Gulf region was going to face a serious challenge as 80% of the economy derives from oil revenues and yet now, "more than at any time in their history, they must try to diversify," he said. In particular he noted with approval the Vision 2030 of Saudi Arabia: a complex rearrangement of the energy sector to increase renewable energy and build nuclear plants, reducing the use of diesel for power generation and cutting subsidies to encourage foreign investors. "I hope it can implement its diversification," he said. "It is heavily reliant on oil." He is hopeful of a shift from oil to gas and renewables.

The other challenge the Gulf faced was the arrival of the US as a major oil producer, he said. "The US is taking giant steps," and is taking a "significant part of the cake" and at the same time the cake is shrinking. One speaker from the Gulf said earlier in the conference that one of the weapons the US had was quantitative easing, lowering the cost of credit and fuelling an upstream spending spree. That said, without US oil, it is not certain how the oil market would have kept in balance in the last few years without sending prices much higher.