Speaking at the World Petroleum Congress in Istanbul, Turkey, the president and ceo of oil giant Saudi Aramco, Amin H. Nasser, said the role of oil as a vital source of energy is expected to continue in the long term, despite the growth of alternatives.
He reiterated in a keynote address to heads of state, government ministers, and executives that new investments are crucial to ensuring global energy security.
Nasser predicted a doubling in size of the world economy over the next 25 years, plus an additional two billion energy consumers. This will result in a lengthy energy transition that alternative sources such as renewables cannot adequately support.
“There’s a growing belief that the world can prematurely disengage from proven, reliable energy sources like oil and gas, on the assumption that alternatives will rapidly deploy,” Nasser said. “About USD1 tn in investments has been lost in the current downturn, concurrent to growing oil demand and the natural decline of developed fields. Conservative estimates suggest we need about 20 mn [additional] barrels per day (bpd) over the next five years to counter these effects.”
The volume of conventional oil discovered around the world halved over the past four years, compared to the previous four. This discovery shortfall could be the start of a cycle that may inhibit a future energy transition.
Nasser identified three areas that can build resilience and discipline for the transition: available supplies; cost structure and portfolio integration; and emissions reduction.
“Saudi Aramco plans to invest more than USD300 bn over the coming decade to reinforce our preeminent position in oil, maintain our spare oil production capacity and pursue a large exploration and production programme centered on conventional and unconventional gas resources,” he added.
The company has identified refining and chemicals, among other areas, as key drivers of long-term value and growth. Furthermore: “We aim to double our natural gas production to 23 bn standard cu ft over the coming decade, and raise the share of gas in the Kingdom’s utilities to about 70 percent, the highest of any G20 nation,” Nasser said. “We have collaborated with many oil and gas companies to promote low-emission solutions, to include our commitment to the Oil and Gas Climate Initiative’s USD1 bn investment fund to develop and rapidly deploy those technologies.”
Source: Saudi Aramco