The Starting Point: The 7th International Energy Forum Meeting
The end of the 1990s was characterised by unusually high volatility of oil prices. Ministers identified the lack of transparent and reliable oil statistics as an aggravating factor in a volatility equation which also included political tension and economic shocks. Producers and consumers stepped up efforts to improve the availability and reliability of oil data and Ministers at the 7th International Energy Forum in Riyadh urged a global response to the challenge making clear their support for improved transparency and better data.
From the 7th to the 9th International Energy Forum: Exercise, Initiative and Database
Six international organisations– APEC, Eurostat, IEA, OLADE, OPEC and UNSD – took up the challenge, combined their efforts, involved their Member Countries and, in April 2001 launched the Joint Oil Data Exercise. The primary goal was not to build a database, but to raise the awareness of all oil market players to the need for more transparency in oil market data.
The first priority ofthe six organisations was to assess the oil data situation in their respective member countries in order to better qualify and quantify the perceived lack of transparency. The assessment included the collection of monthly oil statistics from each organisation's member countries by means of a harmonised questionnaire on 42 key oil data points.
Progress was immediate: Within six months, 55 countries had participated in the exercise. Six months later there were over 70 participating countries, representing 90 per cent of global oil supply and demand.
At the 8th International Energy Forum in Osaka in 2002, Ministers commended the work, reaffirmed their political support and urged the organisations to pursue their effort.
With this renewed political mandate the six organisations obtained agreement from their Member Countries to make the Exercise a permanent reporting mechanism; the Joint Oil Data Initiative (JODI) was born.
As the process gathered momentum, with more countries participating, the quality, timeliness and completeness of submissions all improved. As the scale of the initiative and global interest in it continued to grow it was clear that the information had to be made available in a compatible form: The JODI Oil World Database was born.
Participants in the 5th JODI Conference in October 2004 then strongly recommended that this joint global database should be made freely accessible to all – organisations, countries, industry, analysts and others.
From Concept to Launch
Transparency does not happen overnight and despite the significant progress achieved since its inception, the database is still far from perfection. The IEF Secretariat, which took over the co-ordination of JODI in January 2005, and the six other partner organisations are fully aware of the limits and limitations of the database at this stage of its development. However, since transparency is central to the initiative, the organisations have undertaken to respond positively to the request expressed at the 5th JODI Conference that the database be made accessible to the public.
As quality of data is a major concern to the organisations, and in order to further improve transparency, it was felt helpful to provide a guide to data quality. This was not an easy matter, due to initial differences in methodology and a lack of comparable sources of information in some countries.
When assessing the data, priority was given to the Top 30 oil producer and consumer countries accounting for around 90 percent of world production and consumption, although data from all 92 participating countries are included.
The organisations agreed to open the JODI Oil World Database to the public on the occasion of the inauguration of the IEF Secretariat premises by the Custodian of the Two Holy Mosques, King Abdullah Bin Abdulaziz Al-Saud on 19 November 2005. This decision was taken with the full knowledge that users might be disappointed, as not all the data for all the flows, products and countries are always available.
The Way Forward
Many challenges remain. The database is still a work in progress, but already for many countries, especially for the Top 30 producers and consumers, timeliness, coverage and reliability are of reasonable levels.
The challenge for the organisations now is to increase the coverage to other countries, to reduce the delay in data submissions and to further enhance the data quality. However, the organisations are not solely responsible for the database, all countries, oil companies and analysts are encouraged to participate and to help improve the information.
The JODI Oil organisations are very committed to this objective but they cannot do it alone. They need full co-operation from countries and the oil industry. They also need comments and suggestions from users. Praise, suggestions and constructive criticism are all welcome.
The Achievements Beyond the Data
JODI has played an important role in raising political awareness of the difficulties encountered in improving data reliability and timeliness. The statistical systems have been improved in many countries. Attitude towards confidentiality and reliability have evolved. Contacts across and between oil companies, countries and organisations have multiplied and improved. All these elements have led to a better understanding of others' problems and to a worldwide network of statisticians paving the way for the global harmonization of energy statistics. JODI has also strengthened producer-consumer dialogue by demonstrating that dialogue is not only a concept, but that it can also lead to concrete actions.
What is Next
The opening of the JODI Oil World database to the public is not the final goal of this initiative. The database will evolve continuously. The quality of the data will be assessed on a continuous basis too. However, transparency can only be achieved if all parties involved in the oil market fully participate.