Sultan Ahmed Al Jaber, chief executive of the Abu Dhabi National Oil Company (Adnoc), has called for massive investments in the global oil and gas sector if it is to keep pace with increasing energy demand.
Al Jaber, speaking at the opening ceremony of the ADIPEC conference in Abu Dhabi, said “the oil and gas industry will have to invest over $600 billion every year until 2030, just to keep up with expected [global] demand".
He called the recently concluded COP26 summit a “success”, but added that “current energy dynamics have revealed a basic dilemma", that needs to be addressed.
Al Jaber said that “while the world has agreed to accelerate the energy transition, it is still heavily reliant on oil and gas".
“As economies bounce back from the Covid-19 pandemic, at the fastest rate in 50 years, demand has outpaced supply,” he added.
The Adnoc chief executive noted that even as “renewable energy is the fastest growing segment of the energy mix, oil and gas is still the biggest", and will remain so for decades to come.
Al Jaber said the world must progress with pragmatism when it comes to the energy transition.
“If we are to successfully transition to the energy system of tomorrow, we cannot simply unplug from the energy system of today,” he said.
“Transitions take time… we must invest in energies the world needs today to prepare for the energy world needs tomorrow,” he added.
Al Jaber said that after almost a decade of underinvestment in the oil and gas industry, “the world has sleepwalked into a supply crunch", from which it is time to wake up.
Striking a balance
UAE Energy Minister Suhail Mohamed Al Mazrouei said the nation is striking a balance when it comes to energy transition but remains committed to the environment.
“We have to be pragmatic for the need for the supply to the transition,” he said.
Adnoc is spending billions of dollars to ramp up its oil and gas production capacity to 5 million barrels per day by 2030, and Al Jaber reiterated the emirate’s commitment to expanding its oil production capacity.
While the Adnoc chief executive highlighted its intent to press ahead with key oil and gas developments, he said the company would “prioritise investment toward the most cost and carbon-efficient barrels".
Reducing carbon intensity
Al Jaber said the company is “constantly innovating to further reduce its carbon intensity".
“We were the first company to bring carbon capture and storage to the region, and we are expanding our capacity from 800,000 tonnes of CO2 per year to 5 million,” he noted.
The Adnoc chief executive, who is also the UAE’s special climate envoy, said that from January 2022 up to 100% of the company’s grid power would come from clean sources such as nuclear and solar.
“In one move, this will significantly reduce Adnoc’s operational emissions. It brings us more than one-third of the way towards our 2030 carbon intensity target,” Al Jaber said.
The UAE is poised to host the COP28 climate summit in November 2023 and the nation recently became the first Middle East oil and gas producing country to commit to net-zero emissions by 2050.
“We will make this forum a catalyst for practical, commercial, sustainable energy solutions,” Al Jaber noted.