THE 4th IISS REGIONAL SECURITY SUMMIT
THE MANAMA DIALOGUE
Manama Saturday 8 December 2007
ENERGY AND REGIONAL SECURITY
Sh Mohammed Al Abdallah Al Sabah,
Director, Citizens Services and Governmental Bodies Assessment Agency, Kuwait
In the Name of God, the Merciful, the Clement, Mister President, Your Highnesses, your Excellencies, Ladies and Gentlemen, good morning.
To begin my speech, I first would like to express my great thanks and gratitude to his Majesty Sheikh Hamad bin Isa Al Khalifa, King of Bahrain and to the Prime Minister, his Highness Sheikh Khalifa bin Salman Al Khalifa as well as his Highness Sheikh Salman bin Hamad Al Khalifa, Crown Prince of Bahrain and Commander-in-Chief of Bahrain Defence Force, for their well-known generosity and hospitality. I also would like to thank the government of Bahrain for convening the fourth Manama Dialogue summit, which became a destination for many decision makers and officials in charge of the security and stability of the Gulf, coming from countries all over the world, in order to address and discuss the latest evolutions on the regional scene and the means to support the stability and the prosperity of the region.
One of the important points to be discussed in this session is to assert that maintaining the regional security requires the protection of energy sources and supplies in the region from any sabotage or subversive attempts. This reality binds us to continuously try to neutralize tensions and conflict spots in the region. This is the reason that led their Majesties and Highnesses, leaders of GCC countries to reaffirm at the end of the 28th summit, the importance of preserving Iraq’s unity and ensuring its full sovereignty, and the necessity that some countries, seeking to destabilize its security and stability, do not interfere in its internal affairs. They also reaffirmed the need to see different political communities reunified under the Iraqi flag, far from sectarian intolerance and division and to work on a comprehensive development rebirth, which guarantees economic, security and political stability in this country.
Their Majesties and Highnesses, leaders of GCC countries, also stressed the importance of making transparent dialogue prevail and respecting the United Nations resolutions along with the necessity of full cooperation between the International Atomic Energy Agency and the Islamic Republic of Iran in order to resolve the Iranian nuclear program issue.
On the other hand, after the Annapolis conference that we expected to be a positive step towards reactivating the peace process and urging both parties into conflict to serious negotiations that guarantee all Palestinians’ rights and meet their ambition to create an independent state, the fact that Israel is again imposing a tightened closure on Palestinians in the Gaza strip just after the conference, upsets our hopes to see the conference become a serious and frank step to resolve the enduring conflict.
The energy security, from our point of view in Kuwait, as an oil producing state, is based on the necessity to provide oil and oil derivatives for the consumer countries at adequate prices, in a way that permits us to bring our positive participation to international economic growth.
In this framework, the importance of our region lies in the fact that it is one of the most important oil sources in the world. It holds, as you heard today, 70 % of the international oil reserves and 40 % of the gas reserves. It produces more than a third of the total daily oil produced, and it became the nerve and the artery of the international economies, in particular of the emerging economies. As it is now well known, the oil demand is in steady increase. This is especially true of the many countries that have added a new oil demand when entering in the phase of industrial production and that have become extremely dependent on sufficient oil supplies that guarantee the continuity of their prosperity and the expansion of their economies. For this reason, we consider the security and the stability of the region crucial for international development because development needs energy and because these huge reserves need to be safely routed to the international markets.
You are all aware that supply and demand is no longer the only instrument controlling oil prices. Security facts and developments experienced by the region have become a crucial element in oil price fixing: a price that has very recently approached one hundred dollars and which is expected to exceed this rate if the troubled situation on the regional and international scenes is not appeased. At the same time, one of the main reasons for oil price increase in recent times lies in the lack of sufficient refining capacity able to ensure any oil production rise.
The Gulf States continue to develop and renovate their oil infrastructure in order to respond to the needs of the growing international oil demand. In recent years we have seen a huge injection of investment estimated at hundreds of billions of dollars conducted by Gulf State governments and intended to build new oil refineries and completely renovate the oil treatment facilities.
These actions aim to allow the Gulf States to absorb and respond to the growing international demand on oil. The State of Kuwait described a plan that will end in 2020, intended to increase its oil production and refining capacity to reach 4 million barrels per day by investing some 60 million US dollars. We would also like to indicate that the State of Kuwait developed a new mechanism of collaboration between public and private sectors in order to protect oil facilities. This is a positive initiative in our region.
Therefore, one of the main economic principles that I would like to underline, that can lead to better stability in the field of energy security, is that the consuming states diversify their gas and oil energy sources - a principle commonly known as interdependence - and to not only count on one source for its needs in oil. Any country that only counts on one energy source should know that. Any disruption occurring in the producing country will have a direct and very negative impact on the consuming country economy. Therefore, states with only one energy source should diversify their import sources, a matter that would have positive repercussions on its economic security and strengthen the common benefits.
In this regard, it is also useful to underline the negative effects triggered by the use of oil derivatives that are harmful for the environment. As Kuwait considers itself an active member of the international community, His Highness, Sheikh Sabah Al Ahmad Al Jabir Al Sabah, Emir of the state of Kuwait, decided to take part in the efforts deployed to address these effects and declared during the latest OPEC summit, the allocation of 150 million dollars for research in this field.
The Gulf States development and renovation process in the oil sector is coupled with a political, economic and social development process arising from a complete and anchored belief of the Gulf States leaders that societal and political development is one of the most important factors of security and stability support.
The dependence of the global economy on this region means that any threat or security disruption it could face, will also influence international security and stability and interrupt the economic growth progress. We consequently stress and reaffirm the importance of joining efforts, resorting to dialogue and using peaceful ways to resolve disputes and conflicts to avoid this region descending into the horror of new wars with disastrous consequences.
Finally, I would like to express my gratitude and consideration to Dr. John Chipman, Director-General and Chief Executive of the IISS and his staff for the efforts in making this conference a success.
Thank you.
