DAVOS, Switzerland, Jan 29 (AFP) - High energy prices are as much the result of risk, geopolitical factors and information highways as a real lack of supply, sector leaders told the World Economic Forum.
"There can be no doubt that because of the impacts of globalization, 911 (the September 11 terror attacks against the US), Iraq and other factors, the risks have become higher," Nigerian Finance Minister Ngozi Okonjo-Iweala said.
"But I question whether this is more perception than real, and am surprised when one dollar or three dollars is added to the price because of a minor incident somewhere, for example a kidnapping or a pipeline broken into in the Niger Delta."
She spoke at a forum on energy prices held two days before the Organisation of Petroleum Exporting Countries (OPEC) was to meet in Vienna, and a day ahead of scheduled elections in Iraq, which holds the world's second largest known reserves of crude oil.
According to Armen Sarkissian, head of the non-profit business relations group Eurasia House International, some of the heightened sense of risk is due to hyper-fast information transfers encouraging so-called knee-jerk reactions, and the pace of geopolitical and economic change that heightened uncertainty.
He also said that 10 percent of oil prices reflected speculative trading that took advantage of volatile markets.
Continuing tightness of spare production capacity was the main reason oil markets remained nervous, suggested Thierry Demarest, chairman of the French oil group Total.
Prices would be maintained by growing demand from China, India and other fast-growing economies, he added.
Natural gas would play a more important part in the energy mix, Demarest forecast, saying he expected "an improvement in gas supply security over the next few years".
His counterpart at the Anglo-Russian group TNK-BP, Robert Dudley, took a different view on prices, however, saying "I really am not convinced we are in a new paradigm of higher prices yet."
Although prices would likely remain high for a couple and years, they would eventually ease as new capacity came on stream, he explained.
Abdullah Jumah, president of Saudi Aramco, repeated the Saudi position that there was more than adequate spare capacity.
"Theres no real shortage of oil," he said. "If there is a real problem it exists outside the oil industry, and results from the globalization of misinformation."
01/29/2005 18:13 GMT - AFP