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Zalmay Khalilzad, Gryphon Partners
Zalmay Khalilzad, Former U.S. Ambassador to the UN, Iraq and Afghanistan, President, GRYPHON PARTNERS talks to The Energy Exchange about North Africa and his expectations for the future.
The Energy Exchange: From your experience in Afghanistan and Iraq what are the next steps that North African countries need to take to attract investment in their oil and gas sector?
Zalmay Khalilzad: Perhaps the most difficult challenge facing the development of the Iraqi oil and gas sector has been the lack of a unified hydrocarbon policy for regulating the sector. North African countries that have undergone major transformations, like Libya, need to review their legacy laws and regulations and, if necessary, make amendments or write new ones. The laws and regulations should provide a reliable and consistent legal framework for investment that protects national interests and increase transparency, which was often lacking under authoritarian regimes. At the same time, it is important that governments try to create a sense of continuity in the oil and gas sector, remove uncertainty, and reassure international companies that their interests, too, will be protected. In addition, ensuring security, repairing and expanding basic infrastructure, and cutting red tape associated with the movement of personnel and equipment are also important.
The Energy Exchange: What is the role of Arab states in resolving the Libyan conflict?
Zalmay Khalilzad: The best way for other Arab states to help the Libyan people is to recognize and accept the new government, and refrain from supporting groups that do not share the democratic aspirations of the vast majority of the Libyan people. Aiding and/or harboring remnants of the Qaddafi regime is not the sign of good friend or neighbor. Rather, Arab countries should start dialogue with the new government and identify ways to work together to ensure democracy, stability, and prosperity throughout the region.
The Energy Exchange: Is there a risk of oil majors downsizing in the region and changing their focus towards more stable investment opportunities? What needs to be done to prevent that from happening?
Zalmay Khalilzad: If the global economy avoids another downturn, then I do not believe there is a major risk of the oil majors downsizing in the region. If economies like India and China continue to push consumption upward then the industry must maximize utilization of available undeveloped or underdeveloped reserves in order for supply capacity to keep up with demand. The low cost of production in the Middle East and North Africa gives the region special importance in this regard, particularly if there is no breakthrough in finding cheap alternatives to oil in the near future. The scarcity of other sizable resource deposits elsewhere in the world does not leave the industry with many options. An increase in the reliance on natural gas would not undermine the significance of North Africa because countries like Algeria, Libya and Egypt are very rich in gas too. I think the industry must stay engaged with the Middle East and North Africa for the foreseeable future.
The Energy Exchange: From your experience in Afghanistan and Iraq what are the next steps that North African countries need to take to attract investment in their oil and gas sector?
Zalmay Khalilzad: Perhaps the most difficult challenge facing the development of the Iraqi oil and gas sector has been the lack of a unified hydrocarbon policy for regulating the sector. North African countries that have undergone major transformations, like Libya, need to review their legacy laws and regulations and, if necessary, make amendments or write new ones. The laws and regulations should provide a reliable and consistent legal framework for investment that protects national interests and increase transparency, which was often lacking under authoritarian regimes. At the same time, it is important that governments try to create a sense of continuity in the oil and gas sector, remove uncertainty, and reassure international companies that their interests, too, will be protected. In addition, ensuring security, repairing and expanding basic infrastructure, and cutting red tape associated with the movement of personnel and equipment are also important.
The Energy Exchange: What is the role of Arab states in resolving the Libyan conflict?
Zalmay Khalilzad: The best way for other Arab states to help the Libyan people is to recognize and accept the new government, and refrain from supporting groups that do not share the democratic aspirations of the vast majority of the Libyan people. Aiding and/or harboring remnants of the Qaddafi regime is not the sign of good friend or neighbor. Rather, Arab countries should start dialogue with the new government and identify ways to work together to ensure democracy, stability, and prosperity throughout the region.
The Energy Exchange: Is there a risk of oil majors downsizing in the region and changing their focus towards more stable investment opportunities? What needs to be done to prevent that from happening?
Zalmay Khalilzad: If the global economy avoids another downturn, then I do not believe there is a major risk of the oil majors downsizing in the region. If economies like India and China continue to push consumption upward then the industry must maximize utilization of available undeveloped or underdeveloped reserves in order for supply capacity to keep up with demand. The low cost of production in the Middle East and North Africa gives the region special importance in this regard, particularly if there is no breakthrough in finding cheap alternatives to oil in the near future. The scarcity of other sizable resource deposits elsewhere in the world does not leave the industry with many options. An increase in the reliance on natural gas would not undermine the significance of North Africa because countries like Algeria, Libya and Egypt are very rich in gas too. I think the industry must stay engaged with the Middle East and North Africa for the foreseeable future.
The Energy Exchange: From your experience in Afghanistan and Iraq what are the next steps that North African countries need to take to attract investment in their oil and gas sector?
Zalmay Khalilzad: Perhaps the most difficult challenge facing the development of the Iraqi oil and gas sector has been the lack of a unified hydrocarbon policy for regulating the sector. North African countries that have undergone major transformations, like Libya, need to review their legacy laws and regulations and, if necessary, make amendments or write new ones. The laws and regulations should provide a reliable and consistent legal framework for investment that protects national interests and increase transparency, which was often lacking under authoritarian regimes. At the same time, it is important that governments try to create a sense of continuity in the oil and gas sector, remove uncertainty, and reassure international companies that their interests, too, will be protected. In addition, ensuring security, repairing and expanding basic infrastructure, and cutting red tape associated with the movement of personnel and equipment are also important.
The Energy Exchange: What is the role of Arab states in resolving the Libyan conflict?
Zalmay Khalilzad: The best way for other Arab states to help the Libyan people is to recognize and accept the new government, and refrain from supporting groups that do not share the democratic aspirations of the vast majority of the Libyan people. Aiding and/or harboring remnants of the Qaddafi regime is not the sign of good friend or neighbor. Rather, Arab countries should start dialogue with the new government and identify ways to work together to ensure democracy, stability, and prosperity throughout the region.
The Energy Exchange: Is there a risk of oil majors downsizing in the region and changing their focus towards more stable investment opportunities? What needs to be done to prevent that from happening?
Zalmay Khalilzad: If the global economy avoids another downturn, then I do not believe there is a major risk of the oil majors downsizing in the region. If economies like India and China continue to push consumption upward then the industry must maximize utilization of available undeveloped or underdeveloped reserves in order for supply capacity to keep up with demand. The low cost of production in the Middle East and North Africa gives the region special importance in this regard, particularly if there is no breakthrough in finding cheap alternatives to oil in the near future. The scarcity of other sizable resource deposits elsewhere in the world does not leave the industry with many options. An increase in the reliance on natural gas would not undermine the significance of North Africa because countries like Algeria, Libya and Egypt are very rich in gas too. I think the industry must stay engaged with the Middle East and North Africa for the foreseeable future.
The Energy Exchange: From your experience in Afghanistan and Iraq what are the next steps that North African countries need to take to attract investment in their oil and gas sector?
Zalmay Khalilzad: Perhaps the most difficult challenge facing the development of the Iraqi oil and gas sector has been the lack of a unified hydrocarbon policy for regulating the sector. North African countries that have undergone major transformations, like Libya, need to review their legacy laws and regulations and, if necessary, make amendments or write new ones. The laws and regulations should provide a reliable and consistent legal framework for investment that protects national interests and increase transparency, which was often lacking under authoritarian regimes. At the same time, it is important that governments try to create a sense of continuity in the oil and gas sector, remove uncertainty, and reassure international companies that their interests, too, will be protected. In addition, ensuring security, repairing and expanding basic infrastructure, and cutting red tape associated with the movement of personnel and equipment are also important.
The Energy Exchange: What is the role of Arab states in resolving the Libyan conflict?
Zalmay Khalilzad: The best way for other Arab states to help the Libyan people is to recognize and accept the new government, and refrain from supporting groups that do not share the democratic aspirations of the vast majority of the Libyan people. Aiding and/or harboring remnants of the Qaddafi regime is not the sign of good friend or neighbor. Rather, Arab countries should start dialogue with the new government and identify ways to work together to ensure democracy, stability, and prosperity throughout the region.
The Energy Exchange: Is there a risk of oil majors downsizing in the region and changing their focus towards more stable investment opportunities? What needs to be done to prevent that from happening?
Zalmay Khalilzad: If the global economy avoids another downturn, then I do not believe there is a major risk of the oil majors downsizing in the region. If economies like India and China continue to push consumption upward then the industry must maximize utilization of available undeveloped or underdeveloped reserves in order for supply capacity to keep up with demand. The low cost of production in the Middle East and North Africa gives the region special importance in this regard, particularly if there is no breakthrough in finding cheap alternatives to oil in the near future. The scarcity of other sizable resource deposits elsewhere in the world does not leave the industry with many options. An increase in the reliance on natural gas would not undermine the significance of North Africa because countries like Algeria, Libya and Egypt are very rich in gas too. I think the industry must stay engaged with the Middle East and North Africa for the foreseeable future.
