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OPEC secretary-general dies in Abuja

POLICY MOHAMMAD Sanusi Barkindo, the secre- as OPEC’s acting secretary-general in 2006.
tary-general of OPEC, died unexpectedly in Barkindo had travelled to Abuja in prepara-
Barkindo began serving Abuja late on July 5. tion for retirement from his position at OPEC,
as OPEC’s secretary- Barkindo, a Nigerian national, died less than as he was due to step down at the end of July. His
general in 2016. a day after giving the keynote speech at an indus- successor has been named as Haitham al-Ghais,
try summit in the Nigerian capital. His death was a long-time Kuwaiti oil executive currently
announced in a Twitter post by Mele Kyari, the serving as deputy managing director for inter-
group managing director of Nigerian National national marketing at Kuwait Petroleum Corp.
Petroleum Co. Ltd (NNPC Ltd). (KPC). Al-Ghais has held many positions within
“We lost our esteemed Dr Muhammad KPC and also acted as Kuwait’s OPEC governor
Sanusi Barkindo. He died at about 11pm yes- between 2017 and 2021.
terday, 5 July 2022. Certainly a great loss to his According to press reports, Barkindo met
immediate family, the NNPC, our country Nige- with Nigerian President Muhammadu Buhari in
ria, the OPEC and the global energy community. Abuja. He also used the occasion of his speech at
Burial arrangements will be announced shortly,” the summit to draw attention to the shocks that
Kyari wrote. have hit the global oil and gas industry over the
As of press time, Barkindo’s cause of death last decade. He described the sector as “under
had not been specified. siege,” saying it had been affected by “two major
Barkindo began serving as OPEC’s secre- cycles: the severe market downturn in 2015 and
tary-general in August 2016 after holding a 2016 and the even more far-reaching impact of
variety of posts within OPEC and the Nigerian the COVID-19 pandemic.”
government. Most of his government posts were News of Barkindo’s death elicited sadness
with state-owned Nigerian National Petroleum from many prominent industry figures. For
Corp. (NNPC), the predecessor to NNPC Ltd, example, NJ Ayuk, the executive chairman of the
which was formed last year under the Petroleum African Energy Chamber (AEC), said in a Twit-
Industry Act (PIA). ter post: “Got up to the sad news of the passing
His career at NNPC culminated in 2009- of my mentor, friend, confidant and big brother
2010, when he served as head of the company, Barkindo. One of the few persons I talk to many
also acting in that capacity as Nigeria’s governor times daily. Joked about his speech at NOG. He
for OPEC. Additionally, he was Nigeria’s rep- told me about his meeting with Buhari. He sent
resentative on OPEC’s Economic Commission me messages at midnight and I got up and he is
Board between 1993 and 2008 and briefly served gone.” ™

Downstream has key role in oil price volatility

PERFORMANCE MOHAMMAD Sanusi Barkindo, the late sec- sector was a global phenomenon that was not
retary-general of OPEC, said just hours before being addressed in a consistent way in every
Capacity constraints in his death that capacity constraints in the down- region.
the downstream sector stream sector were making a more significant Overall, he stated, worldwide refining capac-
are making a more contribution to the volatility of world crude oil ity dropped by more than 330,000 barrels per
significant contribution prices than many market observers realise. day (bpd) in 2021 “and remained below pre-pan-
to the volatility of oil Speaking to the Nigerian newspaper Vanguard, demic levels last year, despite the robust global
prices than many Barkindo noted that upstream operators were all economic rebound.” This decline occurred
observers realise, he too often blamed for fluctuations in prices. Pro- despite the addition of new capacity in the Mid-
said. ducers have become “a favourite scapegoat for the dle East, China, Africa and India, and it occurred
current market conditions,” he remarked. because refining capacity actually dropped
This focus on upstream operations over- among member states of the Organisation for
looks the constraints created in other parts of Economic Co-operation and Development
the value chain, he said. “[This] discounts the (OECD) for the third year in a row in 2021, he
current capacity challenges that also plague the explained.
downstream, especially with regard to trans- “Comparing the pre-pandemic year of 2019
portation of fuel,” he said. “Refinery closures in to 2021, OECD refining capacity fell by a sig-
recent years, coupled with a number of untimely nificant 1.5mn [bpd], or 3.3%,” he said. “Given
accidents at important regional refineries, have the global refining squeeze at the moment, the
curtailed supplies and helped create the energy construction of the Dangote Refinery in Lagos,
market volatility of recent months.” with its capacity of around 650,000 barrels per
Barkindo said he had referred to this point in day, is a huge step in the direction of addressing
his keynote speech at the Nigeria Oil & Gas Con- not only Nigeria’s longer-term demand but sig-
ference & Exhibition (NOG) on July 5. He also nificantly improving the capacity outlook of the
stressed that the constraint on the downstream global downstream sector.” ™

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