Media Center
2016-05-31
Minister of Energy His Excellency Dr. Abdul Hussain bin Ali Mirza opened a Symposium titled ‘Decline in Oil Prices and its Effect on Government Budgets’ on May 31 at the Regency Intercontinental Hotel. The event was organized by Ahlia University in collaboration with the National Oil and Gas Authority (NOGA). The event saw participation of a number of officials, researchers and specialists in the field of oil and gas and energy, who gathered to discuss the challenges experienced by the sector at the moment, energy policies and prospects, and financing options available to organizations working in the energy business in the region.
H.E. Dr. Mirza welcomed the attendees and expressed his delight and appreciation for the close cooperation between NOGA and academic and research institutions in the Kingdom of Bahrain, which had resulted in the numerous oil sector events and seminars. He praised the existing cooperation between Ahlia University and NOGA in organising inspiring discussions, research studies and reviews, as well as conferences and seminars that aimed to develop oil and gas, petrochemical and energy industry.
He said the current energy sector challenges, which came in the light of the sharp decline in oil prices, required strong leaders and specialist efforts, especially in the Gulf Cooperation Council (GCC), those who could safeguard future investments in the vital sector, when economies of oil producer countries suffer from severe oil price fluctuations.
The Minister said the glut in oil supply came from oil producing countries outside OPEC, mainly shale oil. There was a 70% increase in non-OPEC oil supplies in 2015, which came from the United States of America. Oil production increased from million barrels a day in January 2014 to nearly 9.3 million barrels in December 2015. The market share of shale oil rose from 41.7% to 46.4% during the period. He pointed out that the oil market instability led to cancellation of many projects globally in 2015, according to a World Oil Outlook 2015 report. The year saw rig counts falling dramatically, costs being squeezed and redundancies. Despite the market instability caused by crude oversupply, OPEC continued to be a reliable and economic oil supplier.
H.E. Dr. Mirza said that for several decades, economic development in the GCC countries was directly linked to the performance of the oil sector and oil revenues supported government expenditures and sustained living standards. Talking about how oil price fall has, is and will affect GCC countries, he said it made us think up new strategies to deal with the temporary setbacks in terms of lower oil income, substituting and coping it with higher non-oil income, and taking a close look at avoidable, non-productive spending.
In Bahrain non-oil growth reached 3.9% during 2015, with growth remaining positive in all sub-sectors and the overall GDP growth for the year touching 2.9%. In real terms, the oil and gas sector accounted for 19.7% of the Kingdom’s GDP in 2015. Bahrain continued its reform efforts, with initiatives to rationalize government expenditure, redirect subsidies on the basis of socio-economic criteria and working to mobilize growth capital through focused investment promotion. He said we should also see an opportunity in this crisis for GCC governments to reform our economies for the next generation.
In conclusion, H.E. Dr. Mira expressed his appreciation for the efforts of Ahlia University and the symposium organizing committee. He thanked participants and speakers for the success of the event and wished everyone to benefit from the scientific studies and technical research papers presented at the forum, and wished the event all success in achieving desired goals.
Professor Mansoor Ahmed Alaali, the President of Ahlia University and Professor Abdullah Al Hawaj, Managing Director spoke at the opening ceremony. A number of speakers from Ahlia University, Brunel University (UK) and the Economic Development Board of Bahrain participated.
