One of the world’s premier energy gatherings, Adipec is a pointer to what occupies the minds of top executives and decision makers.
What began as the Abu Dhabi International Petroleum Exhibition and Conference is now far more than an oil and gas show.
In line with numerous companies that have rebranded recently — TotalEnergies, Qatar Energy, Mubadala Energy and Occidental (formerly Occidental Petroleum) — it now covers energy broadly.
President Sheikh Mohamed visits Adipec 2022 — in pictures
Even if the World Future Energy Summit coming up at the same venue in January remains the leader for regional renewable energy, Adipec this year featured a “decarbonisation zone” along with high interest in hydrogen and in carbon capture, use and storage (CCUS).
This is a healthy development. Too often in western countries, the oil and gas industry is put in opposition to renewables. Transitioning European energy companies treat their petroleum assets as a wealthy disreputable uncle, who pays the bills but isn’t spoken about in polite society.
The approach from the UAE, the GCC and from many of the other attending countries — such as India, Indonesia, Nigeria, Uganda and others — was different. They wish to make responsible use of their hydrocarbon resources.
Adnoc, with its electrification of offshore platforms, use of low-carbon nuclear and solar power, and stake in Masdar’s renewables and hydrogen units, is pursuing the mantra of its chief executive, Dr Sultan Al Jaber: “Maximum energy, minimum emissions.”
This includes growing oil and gas output from the low-cost, low-carbon producers to meet global demand.
Reinvestment is required to make up for declines from mature producer; Dr Al Jaber, who is also Minister of Industry and Advanced Technology, Special Envoy for Climate Change and chairman of Masdar, estimated this at 5 million barrels per day each year.
Above this, high-carbon resources will progressively be squeezed out, while political factors eliminate a chunk of Russian supply that had been counted on in forecasts until February.
The high attendance at Adipec, a reported 40 global ministers and over 160,500 professionals from more than 160 countries, is a sign of a business that is doing well financially and attracting huge interest.
The mood was optimistic, but serious, not self-congratulatory. Delegates were clear that the energy industry needs to do more, and better, to address the trilemma facing its customers, essentially the global population: satisfying at once affordability, security, and environment.
The first two challenges can only be met by reversing the legacy of a decade of underinvestment.
This is the goal of “maximum energy”, of all types. Oil and gas prices were low since 2014 and exceptionally low in the pandemic year of 2020, so it’s not surprising spending has been limited.
But despite the rise in oil, and, especially, gas prices, activity in drilling and field development has not rebounded as it has historically following busts.
US energy envoy Amos Hochstein at Adipec — Business Extra
Energy transition spending in emerging economies is actually down since 2017.
Attendees debated keenly: some feel there is always money for good projects and the petroleum business itself is certainly generating plenty of cash flow.
Others believe that unclear or unfriendly government policies are deterring investment, with windfall taxes and bans on fossil-fuel projects by financial institutions.
Jeff Miller, chief executive of US oil services giant Halliburton, suggested return-focused investors meant the years of rapid growth in American oil output would never return.
And Opec’s latest World Oil Outlook, also launched at Adipec, suggested US output would reach a peak by 2030.
Such views were reflected by Suhail Al Mazrouei, Minister of Energy and Infrastructure, who, during an address to young UAE workers, said that oil was in long-term “decline mode” and that they should focus on all energy sources.
Nevertheless, he reiterated that the country would boost its supplies to world markets as long as they are needed.
It must be said that, although much petroleum-related business was done privately at Adipec, there were few major announcements about oil and gas investments or deals, other than those related to sustainability, local content and digitalisation.
The exception was Libya’s news of spending $6 billion to $8bn on offshore gas production, much needed by the power-starved country and its European customers.
Nigeria's oil minister expressed plans to recover past production levels of 2.2 million barrels per day, and Indonesia pointed to its efforts to get back to 1 million bpd.
Uganda is building a pipeline to bring its landlocked oil to the coast. Those targets will not be achieved without much more tangible work on and below the ground.
Instead, there was intense attention on the third part of the trilemma: minimum emissions.
Nearly every company seemed to be working on hydrogen, carbon capture, cutting methane releases, saving water, boosting efficiency or building renewable energy.
For instance, Adnoc and Siemens Energy will work on certifying low-carbon fuels via blockchain; Adnoc announced a target for methane leakage of no more than 0.15 per cent of production, the Middle East’s lowest; the UN Environment Programme launched a report on cutting methane emissions; and Microsoft said it would support energy companies’ environmental and operational efficiency.
The most notable deal of all, the partnership between the UAE and US to unlock $100bn of energy spending, ticks all the boxes: methane reductions, carbon capture and storage, development of key minerals for clean energy, hydrogen, civil nuclear power, low-carbon aviation and shipping fuels, and prioritising investments in developing countries.
The energy system has suffered two huge shocks in the past three years. This year’s Adipec was a sign the industry is regaining its footing.
The correct answer is sometimes hydrogen, but many energy questions can be solved by connecting diverse, vigorous and innovative people.
Robin M Mills is chief executive of Qamar Energy and author of 'The Myth of the Oil Crisis'