Saudis lead OPEC fears climate change talks may hurt oil revenues

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Saudi Arabia, OPEC’s largest crude oil producer, insisted it will make sure that this week’s climate talks in Durban won’t have an impact on the Kindgom’s and oil exporting cartel’s income.

Organisation of the Petroleum Exporting Countries (OPEC) members have come under renewed criticism over greenhouse-gas emissions and have been asked to bear the burden of cutting carbon footprint. Saudi envoy to the Durban Round said Riyadh and other members of the cartel have unfairly borne the brunt of the mounting pressure and would not be able to relent as their economies largely depend on revenues from oil and natural gas production and exports.

Climate change talks met an impasse when rich nations demanded developing nations to be part of the global deal that seeks to cut CO2 emissions. Emerging nations insist they should not be held hostage by a group of nations that has emitted most of the harmful gasses in the past. OPEC members have been asked to submit to targets that threaten global oil demand and can hit their main source of revenue.

Mohammed al-Sabban said in an interview that climate talks in Durban should be clear on how to minimise the impact of climate change policies on developing countries in general and oil-producing countries in particular. He also insisted that Saudi Arabia has not asked for any compensation for the loss of income from hydrocarbon exports as nations seek cleaner and renewable fuels.

It is very crucial to include provisions to this effect in any balanced comprehensive package we adopt in Durban, al-Sabban, who is also a senior economic adviser to the minister of petroleum, said in an interview.

He added that his government wants technological assistance and more direct investment from developed countries to help Saudi Arabia diversify its oil-based economy.

SUMMIT

Climate change negotiations begin Monday in South Africa and will continue for the next two weeks with an aim to drafting successor of the Kyoto Protocol. The climate treaty, signed in Japanese city of Kyoto back in 1997, and enforced since 2005, obliges developed countries to cut greenhouse gas emissions by 5 per cent to bring it to the 1990 levels by 2012.

Saudi Arabia thinks that a second commitment period for the Kyoto Protocol is a must, and without having unconditional emission reduction numbers from developed countries for the period beyond 2012, it will be impossible to have any agreement in Durban, the Saudi climate envoy explained.

He affirmed that Saudi Arabia, along with other developing nations, are not in favour to renegotiate the United Nations Framework Convention on Climate Change (UNFCCC).

The oil-rich kingdom insists on including carbon capture and storage (CCS) in the Clean Development Mechanism, the second biggest CO2 market set up under the Kyoto Protocol. The mechanism ensures that carbon dioxide emissions from refineries, power plants and factories is pumped back underground and stored permanently.

OPEC comprises of Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

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