Oil resources should not be reason for prejudice

Prejudice is plenty even in the oil industry despite its long international history and outlook.

I was discussing oil resources around the world with a friend of mine when he said jokingly "wherever there is Allah, there is oil", meaning that the Muslims have a lot of oil or more oil than the rest of humankind. I told my friend that the Muslims believe that Allah is everywhere and therefore, they may not buy his assertion.

This suddenly reminded me of a very cold evening in Vienna in the winter of 1992 when I was invited by a close Austrian friend to visit the exploration and development manager of a European oil company. We inadvertently ventured to discuss the oil resources of Iraq when the whole thing turned serious after I found an oil map of Iraq and neighbouring countries on the wall.

After I finished my "presentation", our host's first comment was, "God is so unfair."

I immediately understood where he was heading but asked, "Why do you think so?"

Our host said, "How could he gives so many resources to one country?"

"We are ready to exchange all these resources for your rain and snow," I replied.

Our host realised that I was angry and apologised for his attitude by saying that he did not mean it the way it sounded.

But is it true that the Muslims have more oil? And why oil alone? What about other energy resources?

Going back to my references, I wanted to use the famous BP Statistical Review of energy to find an answer. I used the 2001 figures for this.

It is true that 74 per cent out of 143 billion tonnes of conventional oil reserves in the world are in Muslim and specifically Arab countries which makes them open to much envy. If we look at gas reserves, which are almost equal to oil's, the disparity is less. Out of 142 billion tonnes of oil equivalent (btoe) gas reserves in the world, 49 per cent are in Muslim countries, compared with 31 per cent in the Russian Federation alone.

The story is completely different if we consider that other important resource coal. Reserves of coal in the world stand at 493 btoe, and a meagre 5 per cent of that is in Muslim countries.

Therefore, in total, only 25 per cent of fossil energy reserves (oil, gas and coal) are in Muslim countries. Thus, the disparity disappears.

You might say that oil and gas are not comparable to coal simply because the majority of us do not like the stuff very much. However, in energy terms and in the long run, there is really no difference. Today, coal is a very important source of energy as we shall see later and it is convertible to gas or liquid fuel if needed. There is no doubt that when we run out of oil, as we certainly will, coal will become a viable source of liquid fuel.

There are of course unconventional oil resources such as tar sands and bitumen where the greater majority is found in Canada and Venezuela. When these are developed, as they certainly will, Muslim and Arab oil reserves will look modest.

To complete the reserves review, I would like to look at the consumption of nuclear power and hydroelectricity in the world as a proxy for their "reserves". Nuclear energy contributed 601 million tonnes of oil equivalent (mtoe) in 2001, and only 1 mtoe was generated in Muslim countries, a fraction of a percentage point. Hydroelectricity contributed 595 mtoe worldwide, and only 21 mtoe or 4 per cent was the share of Muslim countries.

In production, the Muslim countries' share of world oil production is 43 per cent out of a total production of about 3.6 billion tonnes in 2001 far less than their reserves share. The share in gas production is 25 per cent out of a world production of about 2.2 btoe again very much less than their reserves share.

Coal production in the Muslim world is small and very much in line with their reserves. It stands at 5 per cent of world coal production of 2.3 btoe. In total fossil fuel energy production, the share of the Muslim world is 27 per cent of 8.1 btoe, very close to their reserves share.

Consumption is a different story. The Muslim world's shares of oil, gas and coal consumption are 11 per cent, 18 per cent and 3 per cent respectively. This makes the Muslim world the major exporter of energy worldwide. Oil, gas and coal exports are, in mtoe, 1351, 173 and 36 respectively.

I maintain that the Muslim and Arab world are not hoarding their reserves but actually making them available to the world market for their own advantage to finance their development.

This is the only way a mutual benefit is struck and it becomes less important to own the reserves if, in a world of cooperation, one can get the production at reasonable prices.

Confrontation, official or personal, is not helpful, and resentment breeds an equal amount of the same.

It is far better for the West to thank Allah for what they have and cooperate to get what they don't, rather than as it appears try to control resources around the world despite their owners.

One must always remember "Allah is everywhere."

Saadalla Al Fat'hi is the former head of the Energy Studies Department at the Opec Secretariat and is working as an adviser