Conference on risk reduction in the energy sector

The global energy market faces new risks in an era of strong demand, tight capacity and high prices, and these risks - and the appropriate responses to them - were the subject of a major Conference organised in Brussels by the Energy Charter Secretariat in cooperation with the International Energy Agency (IEA).

Opening the Conference, the Energy Charter Secretary General Dr. Ria Kemper underlined that meeting future global energy requirements will require massive long-term investment in energy supply and transportation, alongside renewed efforts to improve the efficiency of energy use and to minimise its environmental impact. Speakers from major international energy companies - of both consumer and producer countries - and from the banking sector took up this theme, examining the global energy outlook and considering possible constraints on energy investment and supply.

Among the main themes for discussion were the extent to which higher energy prices affect the relationship between producers and consumers of energy, and also whether there is the need to reconsider the balance within individual countries between the potentially competing claims of the competitive market, the environment, fiscal issues, and security of supply. For consumer countries in particular, there was a renewed emphasis on demand-side measures to reduce energy consumption - or at least to reduce the growth in energy consumption - alongside close cooperation on climate change and clean development.

The Conference examined patterns of change in the conditions for energy investment across the Energy Charter constituency, in particular the implications of a more prominent state presence in the energy sector in some producer countries. A number of participants noted the importance of a stable legal and regulatory framework in assessing long-term risk and return and fostering the confidence necessary for major investment decisions.

A key element of a successful energy investment project, and a balanced international system, is a fair and sustainable sharing of risks and benefits among different parties. Against this background, the Conference reconfirmed the value of common multilateral rules for the energy sector, such as those provided by the Energy Charter Treaty, which promote a transparent and predictable environment for energy investments and cross-border flows.

The Energy Charter will continue its work on risk reduction through discussion among member and observer states, and through dialogue with the newly established Industry Advisory Panel; the objective of this work will be to identify the evolving risks affecting the operation of energy markets, and to propose measures for their mitigation.

Programme and Presentations

Conference Programme

Opening remarks
by Dr. Ria Kemper, Secretary General, Energy Charter Secretariat

Session One: Setting the Scene

Chair - Mr. Jean-Patrick Marquet, Senior Banker, EBRD

The Increasing Investment Needs
by Mr. Marco Baroni, Principal Administrator, IEA

Old and New Investment Risks
by Mr. Erik Sorensen, Director, Energy Charter Secretariat

Session Two: The Perception of Risk

Chair - Mr. Noe Van Hulst, Director, IEA

Investing in Oil and Gas Production: How Much Stability is Needed
by Mr. Wilheim Bonse-Geuking, Group Vice President and Regional President Europe, BP plc (speech)

New Risks in the Gas Chain: More Market Volatility, Less Contract Security - A Downstream Gas Company's View
by Mr. Reinier Zwitserloot, CEO, Wintershall AG

Views of the Pipeline Owners: How to Get the Right Incentives?

Mr. Stanislaw Tsygankov, Head of Department for Foreign Relations, Gazprom

Mr. P.C.A. Kager, Project Manager, Nederlandse Gasunie

Session Three: Risk Mitigation and Banking the Risks

Chair - Mr. Andrei Konoplyanik, Deputy Secretary General, Energy Charter Secretariat

Ways to Reduce Investment Risks - the Host Countries' View

Mr. Frode Johansen, Deputy Director, Oil and Energy Department, Norway

Ms. Galina Abdylmanova, KazMunaiGaz

How Much Risk is Bankable? A Private Banker's View
by Mr Patrick Mole, Managing Director, Europe, Middle East & Africa, Societe Generale Paris

An International Perspective. Ms Coby van der Linde, Clingendael Institute

Concluding Session

Mr. Jean-Patrick Marquet, Senior Banker at the EBRD

Mr. John Roberts, Energy Security Specialist at Platts

Mr. Kiyoshi Mori, Director at JETRO in London

Mr. Corwin Rose, Commercial Manager at ChevronTexaco, participated in a concluding panel discussion chaired by Mr. Noe Van Hulst, Director at the International Energy Agency.