Sultan Ahmed Al Jaber, Group Managing Director and Chief Executive Officer of the Abu Dhabi National Oil company (Adnoc), has indicated that the global oil and gas industry requires over US$600 billion worth of investments annually to keep up with the growing energy demand.
This call comes after the end of the COP26 Summit in Glasgow, Scotland during the opening ceremony of the Abu Dhabi International Petroleum Exhibition and Conference (Adipec) in Abu Dhabi.
Al Jaber said that “after almost a decade of underinvestment in our industry, the world has sleepwalked into a supply crunch. It is time to wake up.”
Meanwhile, among the agreements from the COP26 summit is the call “to accelerate the energy transition, [which] is still heavily reliant on oil and gas”.
According to Al Jaber, economies cannot afford to “flip a switch” from fossil fuels amid ongoing efforts to transition the world economy to renewable energies.
This is evident by the fact that, “as economies bounce back from the Covid-19 pandemic, at the fastest rate in two years, demand has outpaced supply.”
The Adnoc Chief noted that “transitions take time… We must invest in energies the world needs today to prepare for the energy the world needs tomorrow.”
It is clear that, “renewable energy is the fastest growing segment of the energy mix, [but] oil and gas is still the biggest”, and will dominate for decades.
UAE Energy Minister Suhail Mohamed Al Mazrouei said the UAE 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 to Pump Billions of Dollars into Oil and Gas Production
In line with its investment plans, the State Oil Producer seeks to pump billions of dollars to ramp up its oil and gas production capacity to 5 million barrels per day by 2030.
“We were the first company to bring carbon capture and storage to the region, and we are expanding our capacity from 800 thousand tonnes of carbon dioxide per year to 5 million.”Ahmed Al Jaber, CEO of Adnoc
At the COP26 summit, the UAE announced plans to reach net zero by 2050. The country will also become the first Gulf Arab nation to host the COP summit in 2023.
Following its initiative to decarbonise, the UAE plans to invest $160 billion in clean and renewable energy sources in the next three decades.
Al Jaber said the company is “constantly innovating to further reduce its carbon intensity”.
While the Adnoc chief executive highlighted the company’s intent to go ahead with key oil and gas developments, he said the company would “prioritise investment toward the most cost and carbon-efficient barrels”.
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.