The world will lose 5 million barrels per day of oil each year from current supplies if spending comes to a halt, Dr Sultan Al Jaber, managing director and group chief executive of Adnoc, has said.
“This would make the shocks we have experienced this year feel like a minor tremor,” he said. “If this year has taught us anything, it taught us that energy security is the foundation of all progress — economic, social and climate progress.”
Dr Al Jaber, who is also Minister of Industry and Advanced Technology, was speaking at the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) on Monday, where he called for “maximum” energy with “minimum” emissions to ensure global energy security.
“Our world is on its way to being home to 9.7 billion people by 2050. To meet their needs, the world will have to produce 30 per cent more energy than today,” he said.
“And as we meet that need, we will be helping to bring electricity to almost 800 million people who don’t have it today.
“The world needs all the solutions it can get. It is not oil and gas or solar, not wind or nuclear, or hydrogen. It is oil and gas and solar, and wind and nuclear, and hydrogen. It is all of the above, plus the clean energies yet to be discovered, commercialised and deployed.”
Adipec, which will run from October 31 to November 3, comes at a time when global oil and gas spending is expected to shrink this year, even as crude prices hover around $95 a barrel.
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Despite windfall profits, some global oil companies have been reluctant to plough money into new drilling activity as they face pressure from investors and regulators.
Oil and gas upstream investment needs to increase and be sustained near the pre-coronavirus levels of $525 billion through 2030 to ensure market balance, according to the International Energy Forum (IEF).
Upstream investment in 2021 was depressed for a second consecutive year at $341bn — about 25 per cent below 2019 levels.
Dr Al Jaber, who is also the chairman of the Abu Dhabi Future Energy Company, better known as Masdar, and Special Envoy for Climate Change, noted that “energy is everybody’s top priority” as the global energy sector goes through what he described as “a perfect storm”.
Now is not the time to point out that the long-term underinvestment in oil and gas has made a difficult situation even worse as “the data is clear”, he said.
“At Adnoc, we have connected our operations to zero-carbon nuclear and solar power. We are electrifying our offshore operations to cut their carbon footprint in half,” Dr Al Jaber said.
“And we are pressing down harder and harder on our methane intensity, even though we already have one of the lowest levels in the world.
“We need to hold back emissions, not progress. The world is looking for solutions and I believe the energy industry can unite a divided world in finding them. I believe that the future is forged by those who make the first move.”
Earlier this month, the 23-member Opec+ alliance agreed to slash its output by 2 million bpd, its biggest production cut since the start of the pandemic in 2020, on expectations of an economic slowdown.
Brent, the international benchmark under which two thirds of the world's crude is traded, gained about $14 after the move. It is currently down about 1 per cent at $94.74 a barrel.
The UAE and the Opec+ are “keen on” meeting global energy requirements, Minister of Energy and Infrastructure Suhail Al Mazrouei said on Monday.
“At the same, time we are not the only producers in the world … there are others who need to do their part in investing and encouraging investments is needed more than ever,” he said.
The UAE, Opec’s third-largest producer, will do “everything it can” to supply the world while focusing on diversifying its energy sources, he said.
Adnoc plans to significantly increase its investment in hydrocarbons and raise its output capacity to 5 million bpd by 2030.
The UAE is investing Dh600 billion ($163.5bn) in clean and renewable energy projects over the next three decades as it aims to achieve net zero emissions by 2050.
The UAE and top crude exporter Saudi Arabia will be “exemplary” hydrocarbon producers while also achieving all their sustainability goals, Saudi Energy Minister Prince Abdulaziz bin Salman said.
Both countries are boosting crude oil output and refining, and also working on clean hydrogen plans, he said.
Hydrogen is expected to account for 12 per cent of global energy use and 10 per cent of carbon emission reductions by 2050, driven by the urgency of climate change and countries’ net zero commitments, according to the International Renewable Energy Agency.
It comes in various forms, including blue, green and grey. Blue and grey hydrogen are derived from natural gas while green is produced using renewable sources.