Sopuruchi Onwuka
2 July 2008
Lagos — The current high prices of oil will aggravate poverty and starvation in the world's undeveloped countries, if urgent measures are not deployed to encourage private access to oil reserves, evolution of technologies and consumption efficiency.
Chairman of Spanish Repsol, Mr. Antonio Brufau, who made the assertion at the ongoing World Petroleum Congress (WPC) in Madrid yesterday, told the plenary session that high oil prices were denying growth opportunities to developing countries which need fuel to fire industrialisation.
According to him, emerging countries will continue having high economic growth which would imply massive process to access to energy consumption, arguing that "the productivity increases and the extension to greater part of the population of the benefits of economic growth will continue being a positive shock to the global economy."
He regretted, however, that "increase in prices of oil could delay access of important sections of the population to a better standard of living," adding that "we must avoid the short term harmful effects of high oil prices increasing the rate of poverty and extreme poverty."
Brufau said that developing countries needed affordable fuel to pursue growth and economic development which, he explained, demand greater mobility, number of services and energy consumption.
He said that demand for oil in developing countries would continue to grow in the next 25 years.
"The fact that more than three quarters of the growth in energy demand takes place in developing countries is extremely positive and proves global dynamism," he said.
In calling for access to oil reserves, he called on governments to step up investments in oil production while encouraging private investors access to explore and produce oil from reserves so far held up by national oil companies.
"Ninety per cent of known oil resources are located in countries that limit foreign private investment. This issue is highly relevant because as I have previously mentioned, historically, international oil companies have accounted for the majority of total investment in the sector."
Blaming this for the record oil prices, the Spanish national oil company chief called for high level cooperation between international and national oil firms in forming joint ventures that would generate production increases.
In concluding, Mr. Brufau said the world needed oil to improve the standard of living of billions of people while the industry has the responsibility to deliver the energy factor.
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