Oil industry needs $11t in new investments

Abu Dhabi: Investments totalling $11 trillion will be needed by the oil and gas industry to keep up with rising energy demands, according to UAE Minister of State and Adnoc CEO Sultan Ahmad Al Jaber.

“Population growth and the historic rise of the middle-class leading to greater spending power are key [factors],” he said while delivering the keynote at World Energy Congress in Abu Dhabi. “And as a result over three times the amount of energy currently consumed by all of Europe will be added to the global energy demand in the next two decades.”

But for the short-term, “global economic uncertainties are creating market volatility and impacting the energy demand. But, in the long term the outlook is very positive and, in fact, robust.”

Al Jaber stressed the need for diversifying energy sources to include renewables as well as nuclear power, highlighting the UAE’s own commitment to such policies, in the form of the Barakah Nuclear Power Plant and construction of the world’s two largest solar power plants.

Still dominant

The minister, however, pointed out that oil and gas would still be among the top energy sources in the long run. “We know the world will still rely on oil and gas as the majority source of energy for many decades to come – in fact about $11 trillion of investment is needed just to keep up with the current projected demand.

“At Adnoc, we are on track to achieving our production capacity goals of 4 million barrels of oil per day by 2020 and 5 million bpd by 2030. In parallel, by tapping into gas caps, undeveloped reservoirs and unconventional resources, we are unlocking vast reserves of natural gas.”

UAE’s energy agenda

Mapping out the UAE’s energy strategy, Suhail Al Mazrouei, UAE Minister of Energy and Industry, said the country was aiming to reduce its carbon footprint by 70 per cent by 2050. “We have a strategy to share with the rest of the world – the UAE has delivered the first long-term energy strategy in the region and, I would say, in the world. That includes a huge contribution from clean forms of energy.

“We will continue our efforts as a reliable supplier of hydrocarbons to the world… in a way that protects the environment, in a way where we together with our national oil company and the rest of the stakeholders reduce carbon footprint by 70 per cent by 2050.”

Al Mazrouei also spoke on the role of Opec+ producers, who will be meeting on Thursday in Abu Dhabi to discuss latest updates to production cuts. He said the group was there for the long term, and that the relationship between Opec and non-Opec producers such as Russia was deepening with both sides seeing the positives of working together.

Al Mazrouei said it would be unlikely to expect any new decisions or recommendations to come out of their meeting on Thursday.

BOX

As one of the world’s leading energy providers, the UAE is committed to ensuring its energy production was in sync with environmental protection.

“We produce among the least carbon-intensive barrels in the world,” said Sultan Ahmad Al Jaber, UAE Minister of State and Adnoc CEO. “We lead the industry with the lowest methane intensity, and we are investing in technology that captures significant amounts of carbon dioxide from industrial sources.

“We launched the region’s first commercial-scale carbon capture utilization and storage facility in 2016 and over the next decade, we will expand this programme six times.”