16/12/2014 13:34 AST
The National Bank of Abu Dhabi (NBAD) and CNBC hosted a panel of leading energy experts to discuss the future of energy for Asia, in Kuala Lumpur on 15 December.
The panellists agree that low oil price is a short-term concern and the demand will grow in the medium-to-long term. They highlighted that oil production is no longer cheap and the high funding costs of some producers. They also agree that low oil prices represent a good opportunity to many governments to de-subsidise energy and make the necessary economic reforms.
The expert panel discussed how the fastest growing economies in the West-East corridor, which stretches from West Africa to East Asia, will finance future energy projects, both fossil fuel and renewable. They reached a conclusion that investment opportunities in this super region are ample, and commercially-sound projects will attract investors and financing. Marc Mollema, Global Head of Energy & Resources at NBAD referred to Shams 1 in Abu Dhabi, which is one of the world’s largest concentrated solar power projects, as an example of innovative projects that have secured financing.
The panellists discussed the growing dependence on sustainable energy resources in many parts of the world, and particularly in the West East Corridor economies, noting the increase in demand for both fossil and renewable resources to fuel the growth of these economies. They added that high growth economies in emerging markets such as India would take on different kinds of energy resources to meet the growth demands over the medium to long term.
The panel, “The Future of Energy; West East Corridor”, was convened at a time when Asia is at the centre of the changing global energy landscape, with Asia expected to account for 88 per cent of the growth in global oil demand to 2035 (source: OPEC).
The expert panel comprised Tan Sri Rastam Mohd Isa, CEO of the Institute of Strategic & International Studies; Datuk Torstein Dale Sjotveit, CEO of Sarawak Energy; Anthony J. Jude, Chairman of The Asian Development Bank’s Energy Committee; and Marc Mollema, Global Head of Energy & Resources at NBAD. Lisa Oake, CNBC seasoned news anchor, moderated the session.
Alex Thursby, the Group Chief Executive Officer of NBAD said, “Lower oil prices will boost trade and consumer spending which, in the medium term, will stimulate economic growth, particularly among emerging markets that are net importers of oil. It will also allow some governments to address the distortion caused by fuel subsidies.
"The UAE has worked hard to successfully diversify its economy by developing its non-oil sectors which now accounts for nearly 65 per cent of GDP. Lower oil prices may raise short-term speculation over the ability of some governments to maintain their spending programmes, but the UAE economy is very resilient and the medium term outlook remains strong”.
Susan Yuen, NBAD’s Asia CEO and Country Head of Malaysia said, “Our speakers presented a wide-angled perspective on challenges for fossil fuel, renewable energy, financing opportunities, energy sustainability and the impact of urbanisation on both demand and supply of energy for the future.”
CPI Financial
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