Investing in Energy Security Risk Mitigation
Strategic alliances between national and international energy companies offer the key
Geneva, 18 November 2008
Despite the current global financial crisis, economic slow down and price vulnerability in world energy markets, investing in future energy sources to meet the growing global demand for energy still remains a major preoccupation for Governments, the energy industry and all other stakeholders concerned. With oil demand forecast to grow 1.3 per cent annually and natural gas demand by 2.1 per cent annually through 2030, greater investment in energy infrastructure – over US$ 22 trillion by 2030 – is clearly needed throughout the value chain[1].
How will the current global financial turmoil affect energy availability and the security of energy supplies? The increased sense of vulnerability and insecurity seen today calls for strategic alliances between national and international energy companies, which together with stable host government policies offer a promising way to mobilize the capital needed for investing in energy security, capital that is needed more than ever before. Last year, the Energy Security Dialogue hosted by the United Nations Economic Commission for Europe (UNECE) showed how global energy security could be increased most effectively by investing in energy technology and infrastructure.
The Special Session “Strategic Alliances for Energy Security” to be held on 19 November, during the seventeenth annual session of the Committee on Sustainable Energy (Geneva, 19-21 November), will examine how cooperation between national oil companies and international oil companies can help to mobilize the capital needed for hydrocarbon investments to enhance global energy security. The role of Governments in achieving a fiscal and regulatory environment to support the multiple sources of finance investments needed in the hydrocarbon sector will also be presented.
Energy security risks tend to be perceived differently and then managed differently by all the stakeholders – some risks can be managed by Governments, some by the energy industries themselves and others by the international financial sector. A number of energy security risks may also be reduced through multilateral intergovernmental cooperation frameworks, programmes and initiatives. The work of UNECE contributes to a better understanding of these perceptions of energy security risks and serves to help mitigate a number of the current concerns through the enhancement of international dialogue and cooperation on energy security.
The Special Session on “Strategic Alliances for Energy Security” will also see the release of the publication “Investing in Energy Security Risk Mitigation”. This latest addition to the UNECE Energy Series summarizes new challenges in making these investments based on the intergovernmental expert dialogue that takes place at UNECE. It also examines in detail the investment prospects and financing of the hydrocarbon sector in the light of the need to enhance global energy security. A security that, in the particular meaning of affordability of energy supplies, has gained in visibility due to the dramatic increase in oil prices over the past several years and the recent price volatility.
Failure to meet demand on investment needs in energy supply technology and infrastructure could result in continued upward pressure on oil prices – the current price fall notwithstanding – both in the short- and long-term.
[1] Figures from International Energy Agency.
For further information, please contact:
Mr. Gianluca Sambucini
Secretary, Committee on Sustainable Energy
UNECE Sustainable Energy Division
Palais des Nations
CH-1211, Geneva 10, Switzerland
Phone: +41 (0) 22 917 1175
Fax: +41 (0) 22 917 00 38
E-mail: [email protected]
Website: http://www.unece.org/energy
Ref: ECE/SED/08/P04