Heads of oil and gas majors gathered at Adipec 2023 on Monday and pushed for a “multi-energy” transition as well as boosting spending on technologies intended to reduce emissions from fossil-fuel production.
Oil companies have come under criticism for not moving fast enough on climate targets even as chronic underinvestment in the oil and gas sector adds to crude market volatility.
Brent crude, the benchmark for two thirds of the world’s oil, gained about 22 per cent in the third quarter as Opec+ supply cuts tighten crude supplies.
There has been a “significant uptick” in investment in low-carbon energy as well as conventional energy, but its “nowhere close to where we need to be”, Wael Sawan, chief executive of Shell said during a panel session.
“We need all of it, not some parts of the energy value chain. We need all of that to come together,” Mr Sawan said.
Shell, which reported record profits last year on the back of higher energy prices, will continue to focus on “scalable” and “profitable” business models, he said.
The industry will need to take “multiple pathways” when it comes to the energy transition, Tengku Taufik, chief executive of Malaysia’s Petronas said.
"For a company like us where there's a mandate to not only provide for energy security, we've got to step up to the plate and prepare for the decarbonised systems in the future," he said
“The debate that has always been posed here is: can you keep everyone happy?”
Global energy heads have been urging governments to invest more in oil and gas projects amid an energy crisis, which has been exacerbated by the Ukraine war.
Oil and gas upstream capital expenditure rose by 39 per cent to $499 billion last year, the highest level since 2014, the International Energy Forum said.
However, annual upstream spending needs to increase to $640 billion by 2030 to ensure adequate supplies, the IEF has said.
More oil
“Oil and gas is very much needed in the world and can continue to be produced, if you are producing in a way that’s better,” said Vicki Hollub, the chief executive of Occidental Petroleum (Oxy).
The US-based company is looking to produce more oil from existing reservoirs while reducing emissions, Ms Hollub said.
“We're also doing it in a way that provides energy security, mitigates climate change and provides value for our shareholders,” she said.
In August, Adnoc and Oxy signed an agreement to evaluate investment opportunities in carbon capture and storage (CCS) in the UAE and the US.
The agreement was part of the US-UAE Partnership for Accelerating Clean Energy (Pace), a $100 billion partnership between the two countries announced last year.
BP’s interim head Murray Auchincloss on Monday said further investments in oil and gas would be hampered by supply chain bottlenecks.
“The supply chains are constrained right now. If you tried to do too much, I think you'd go backwards in efficiency,” Mr Auchincloss said.
Speculation grew about BP’s future energy strategy after Bernard Looney, who had been the company’s chief executive since 2020, stepped down last month.
Mr Looney aimed to cut oil and gas production to reduce emissions while investing in clean energy technology such as wind power, hydrogen and electric vehicle charging.
“The strategy is not the embodiment of a single individual. It is the embodiment of a management team and board … and we remain firmly committed to it,” Mr Auchincloss said.
-
Sheikh Mansour bin Zayed, Vice President, Deputy Prime Minister and Chairman of the Presidential Court, opened the 39th edition of Adipec on October 2. Dr Sultan Al Jaber, Cop28 President-designate, Sheikh Nahyan bin Mubarak, Minister of Tolerance and Coexistence, and Suhail Al Mazrouei, Minister of Energy and Infrastructure, were also present. All photos: Wam -
Sheikh Mansour opened the event under the patronage of President Sheikh Mohamed -
Sheikh Mansour with Dr Al Jaber, who is also Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc -
Sheikh Mansour hailed the huge efforts of Sheikh Mohamed to enhance the UAE's leading strategic position on energy -
The UAE is playing a pioneering global role in reducing emissions, Sheikh Mansour said -
Sheikh Mansour at Adipec with Dr Al Jaber -
Sheikh Mansour urged the conference to achieve global strategic goals, enhance the energy system and support innovation and technology -
This, in addition to constructive co-operation, can contribute to radically reducing carbon emissions, Sheikh Mansour said -
Sheikh Mansour met several global leaders in the energy sector at the conference -
He also attended a key ministerial session under the theme of the conference, 'Decarbonising. Faster. Together'
