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11 February 2009
GPPi Fellow presents at a conference on Europe’s energy future
GPPi Fellow Ricardo Soares de Oliveira participated in a panel discussion entitled “Investing in Europe’s Energy Future.” The presentation was hosted by the French Institute of International Relations (Ifri) as part of their European Governance and the Geopolitics of Energy 2009 Annual Conference, which took place in Brussels on 5-6 February 2009. The panel examined the issue of investing in energy production in the Middle East, Russia, Americas, North Africa and Africa. Charing the panel was Jacques Lesourne, Chairman of the Scientific Community of the Ifri Energy Program. Other panellists included Brad Bourland, Chief Economist, JADWA Investment; Igor Tomberg, MGIMO; Alberto Aparicio, Planning and Economic Studies Director, REPSOL.
In his remarks, Soares de Oliveira examined the direction in which the energy sector in West and Central Africa took in 2008 and outlined where this direction could be heading in the next 10-15 years. While postulating the future of the energy sector of Africa, Soares de Oliveira pointed at the trend towards investment diversification in this sector in particular with Asian competitors such as China establishing themselves as a viable alternative to the European and American oil giants on the continent.
Drawing on the recent drop in oil prices, Soares de Oliveira noted that the direct implication this had on the oil producing African states is a substantial drop in these governments revenue generated from fossil fuel resources. While there is no serious move towards increased borrowing of capital by these states, with banks reluctant to borrow in the current financial crisis, he warned that the coupling of these two phenomena’s could have serious negative political consequences for those in power.
However, major oil companies have not retrenched on their existing energy investments for two reasons. First, their deep financial resources allow them to continue with existing investment projects without having to borrow extra capital to fund such activities. Second, the fundamentals of the global energy economy shows that there is, and will continue to be, a lasting dependence on oil. As such, oil prices in the future are also vulnerable to price fluctuations and may rise to yield very profitable margins.
To view the conference agenda please click here.
For more information please contact Ricardo Soares de Oliveira