B Sonjica: Joint Oil Data Initiative training workshop

30 January 2007

Ms Ingar Stohl, Representatives of the Norwegian Government
Representatives from JODI member countries
Executive Secretary of the African Petroleum Producers Association (APPA), Mr
Dave Lafiaji
Members of the South African Petroleum Industry Association (SAPIA)
Government officials of the Republic of South Africa
Distinguished guests and participants

It is with great pleasure that I welcome you in our country. I stand here in
front of you today to address the first Joint Oil Data Initiative (JODI)
workshop to be held on African soil. As we all might know, the birth of JODI
emanated from the seventh International Energy Forum Meeting held in Riyadh,
Saudi Arabia, in November 2000. The realisation of the negative impact of the
unusually high volatile oil prices on economies of nations around the globe
gave birth to the formation of JODI. This point is very important for us
non-producing countries, but especially for Africa.

Chief among the reasons for such volatile oil prices was deemed to be the
lack of transparent and reliable oil statistics. This was also aggravated by
other factors such as political tensions and economic shocks. We always say
that the price of oil is determined by geo-politics. Thus began the efforts to
improve the availability and reliability of oil data among producers and
consumers, who recognised the need for more data transparency in the oil
market. Hence Ministers at the seventh International Energy Forum in Riyadh
made clear their support for better data and urged a global response to the
challenge.

Thus in April 2001, we saw the launch of the Joint Oil Data Exercise whose
primary goal was not only to build just a database, but to raise the awareness
of all oil market players of the need for more transparency in oil market
data.

With this brief background on the origins and objectives of JODI, primarily
its emphasis on proper, appropriate and accurate oil data on all oil market
players, let is ponder the significance of JODI and in particular the
importance of conducting this workshop.

From an international perspective, it therefore goes without any doubt that
in the absence of proper, appropriate, and accurate oil data, we cannot secure
our future security of energy supply, which has become a concern of all
humanity. This information is critical for development, how we deal with issues
of poverty. This is more so due to our interdependence as producing and
consuming countries, and further bound together by the globalised,
interdependent and integrated world economy. It is such international
interdependence, both from an energy and economic perspective, that neither of
us can survive without sharing and being transparent about our oil and gas
data, as these are the primary inputs that drive our economies, which then
result in improving the lives of our global citizenry.

Without such international oil and gas data transparency, neither would we
be able to attract so much needed international investment from both the
investor and oil industry community so as to efficiently exploit such energy
resources for the betterment of mankind in general, as it is these communities
that have the means to invest substantial capital and technological expertise
to achieve such a goal. The JODI is equally important to the global oil market.
With certainty in respect of accurate and reliable oil data, the future becomes
less unpredictable and gets characterised by consistent and stable energy
markets.

For government planners globally, availability of reliable and accurate
data, and the relevance of JODI initiatives and solutions means responsible and
globally aligned policies informed by common understanding, vision and
interpretation of the global energy outlook now and in the future. We have to
incorporate the forward looking aspect within our planning processes. It is
therefore in this context that we as representatives of our respective
governments and people, entrusted with energy expectations of our diverse
citizens, which we should and must co-operate so as to address the challenges
related to equitable global energy supply, security, and access to it. And it
is through such gatherings that we will be able to achieve that.

For us children of Africa, the biggest problem remains access to energy in
order to meet basic human needs and the achievement of the Millennium
Development Goals (MDG). In order to measure whether goals are being achieved,
data is once again required, but sadly it is not always gathered.

Some regions in Africa are endowed with considerable energy resources, but
these may be concentrated in particular sub-regions or countries. Regional
co-operation and cross-border projects can not only contribute to improving
access to energy, but can enhance energy security. Africa has abundant
hydro-power potential largely concentrated in the central part, coal in the
southern part, and oil and gas primarily in the northern part and along the
central Atlantic coast. Africa has all these things; what is important is
co-operation in order to ensure progress.

Experience in other regions has shown that the development of cross-border
energy infrastructure can assist in overcoming energy shortages, enhance
industrial development, improve environmental performance as well as ensure
better data. This approach is included in the New Partnership for Africa's
Development (NEPAD) with regard to energy.

Many developing countries, including least developed countries, could
benefit domestically and regionally from the development and use of local gas
deposits and of gas associated with oil production that have been considered
un-economical for the export market. An international arrangement to assist
countries to develop stranded natural gas reserves for local consumption is an
option that could provide those nations with much needed energy, as well as
economic, statistical and environmental benefits.

International support can play a role in promoting access to energy by
assisting developing countries to tap infrastructure grants and loan facilities
to provide technical assistance to state-owned energy enterprises and to
strengthen public sector firms that are active in the energy sector as well as
for designing effective public-private partnerships which would also improve
the gathering and quality of data.

The transformation of biological feedstocks into fuels is of growing
interest both to expand fuel supplies and to provide cleaner fuels. The primary
bio-fuels currently produced are ethanol as a substitute for gasoline and plant
oil products that can substitute for diesel fuel. With bio-fuels there is some
expectation that they could be produced for export by agriculture-based
developing countries, although there are concerns about restrictive trade
practices.

Options for promoting natural gas include the development and expansion of
liquefied natural gas (LNG) projects and the development of gas-to-liquid
technologies such as will be used in the facilities under development in Qatar.
Other opportunities relate to supporting projects to construct gas pipelines
and to use natural gas associated with oil reservoirs that is currently being
flared, as is being undertaken by the Global Gas Flaring Partnership of the
World Bank. Partnerships should also be used to ensure the gathering of data.
And it is my hope that as we are gathered under the beautiful South African
sun, we will be able to take a lot from this JODI workshop to enhance the lives
of our citizens.

For South Africa this workshop could not have come at a better time, because
uncertainties related to supply and demand present significant obstacles for
production planning and investment decisions. Improved transparency of oil
markets' fundamentals would help alleviate market anxiety, allow better
assessment of future energy requirements and facilitate development of clear
energy policies. The Joint Oil Data Initiative (JODI) co-ordinated by the IEF
Secretariat is important to that end.

It comes at a time when we as a country are at work to find a solution to
the problem of security of supply of liquid fuels which saw the country
experiencing a severe shortage of fuel in December 2005. It is therefore clear
that this initiative is extremely important throughout the globe but also
specifically for Africa. Everyone realises that energy planning cannot be done
without proper, appropriate and accurate data.

In conclusion, data reliability is critical in energy planning, investment
direction and patterns, especially for the future. To all JODI officials and
lecturers, kindly discuss the relevance of the course to participants and urge
the participants to comply with the methodologies that will be expounded in the
training sessions.

From the above it is clear that Africa and South Africa have very important
roles to play in the global energy dialogue at political level in the
International Energy Forum.

I would like to express my gratitude therefore to the International Energy
Forum for providing this valuable training which will ultimately result in
improved data, more importantly capacity building and well managed integrated
energy plans, the Norwegian government for its contribution, the International
Monetary Fund, United Nations Sustainable Development (UNSD), International
Energy Forum (IEF), Petroleum Export Countries (OPEC), IEFS, all those SAPIA
members that saw it worthwhile to send their representatives and all the
participants from Africa, and lastly, my own department for putting this
together.

To the delegates who will be receiving training, please do your best and
excel so that you can become trainers yourselves. Building this capacity is
very important and good luck.

I thank you.

Issued by: Department of Minerals and Energy
30 January 2007