The CEO of Saudi Aramco, Amin Al-Nasser, confirmed that the complete energy transformation of the $ 100 trillion global economy in just a quarter of a century is a “fictional” idea.
In a speech delivered today, Monday, June 26, at the Asia Energy Conference hosted by the Malaysian oil company Petronas, he stressed that the growth in renewable energy sources has not kept pace with the increase in energy consumption.
The Aramco chief said that the equivalent energy cost of green hydrogen ranges between $200 and $400 per barrel against the current oil price of $75 per barrel, warning against putting all the “transitional eggs in the new energy basket.”
He urged Nasser to accept the “multi-speed transformation model” in Asia and to provide financial support to developing countries, Reuters reported.
energy needs in Asia
The President of Saudi Aramco called on those concerned with energy affairs in the continent of Asia to express their priorities and needs in a more effective way, so that they are reflected in a clearer manner in global discussions of energy transitions, and thus contribute to creating a more balanced and comprehensive global opinion, which is taken into account in the formulation of global plans.
Al-Nasser encouraged Asian countries to adopt an approach that reflects their priorities in this field, stressing Saudi Aramco’s ambition to help balance the growing demand for energy with more sustainable solutions, according to a statement seen by the specialized energy platform.
Al-Nasser said, “When it comes to energy transition, I do not think that the interests of this vital social and economic region are sufficiently reflected in the course of global energy transitions, nor in the current transformation policies as well.”
He added, “Although the existing transformation policies aim to achieve environmental sustainability, and this is a very important thing, the importance and priority of other issues affecting the lives of individuals, societies and the economy related to energy security and the ability to provide energy at reasonable costs have not been confirmed.”
He stressed that this represents a great opportunity for Asia to speak louder and more clearly about its priorities in transformation, as the voice of its transformation must be commensurate with its great economic weight and global influence.
Aramco strategy
Al-Nasser said about Saudi Aramco’s strategy in Asia: “We are redoubling our efforts to meet the growing demand for energy in Asia, which includes chemicals, advanced materials, lubricants, and new energy with more low carbon supported by advanced technologies, and double the needs as the ‘comprehensive source’ for Asia.” , which also aims to achieve a balance between energy security and the ability to provide it at reasonable costs, with great concern for environmental sustainability.
“If we can use our combined strength to influence a new approach to the energy transition that is logical, balanced and reflects Asia’s priorities, then we can achieve the energy future that its economies and people deserve,” Al-Nasser added.
The Aramco chairman expected the fundamentals of the global oil market to remain intact for the rest of the year, supported by strong demand in developing countries, particularly in China and India.
“Overall, we believe that the fundamentals of the oil market remain intact for the rest of the year,” he said in his speech to the Asia Energy Conference hosted by Malaysian oil company Petronas.
“Despite the risks of recession in many OECD countries, the economies of developing countries – particularly China and India – are driving healthy oil demand growth of more than 2 million barrels per day this year,” the Aramco president added.
Chinese demand for oil
Al-Nasser said that although China is facing some economic headwinds, the transportation and petrochemical sectors are still showing signs of demand growth.
Brent crude futures have fallen by about 14% since the beginning of the year, as rising interest rates affected investor appetite, while a promising economic recovery in China stalled after several months of lower-than-expected data on consumption, production and the real estate market.
The activities of the Asia Energy Conference this year focus on the theme of “Crafting Paths for a Sustainable Asia”, and emphasize the diversity of developed, developing and emerging economies in Asia, which make the region a key to global growth, and the establishment of a system of cooperation during the energy transition process.
On the other hand, the head of the largest independent oil trading company in the world said today, Monday, that it is difficult to try to predict market balances this year due to uncertainty about Russian supplies and Chinese demand.
Vitol CEO Russell Hardy told the Asia Energy Conference hosted by Malaysian oil company Petronas that the market was slightly oversupplied, with Russia exceeding previous expectations of supply losses due to Western sanctions on its exports.
He added that while there were signs in the first quarter of an imminent recovery in oil demand in China, it has been stalled by economic headwinds.
The role of hydrocarbons
On the other hand, Malaysian Prime Minister Anwar Ibrahim and industry executives stressed that hydrocarbons will be an important part of the energy mix in Asia, as affordability and energy security remain a major concern for the region.
In the opening speech of the energy conference, which is being hosted by Petronas, Anwar said that achieving carbon-neutral goals should not come “at the expense of economic growth or vice versa.”
“Instead, Asia should seize every opportunity for further dialogue and action on how we can plan responsibly to enable every country to realize its right to development and lower carbon aspirations,” he added.
Asia is home to some of the world’s largest greenhouse gas emitters, and countries have made various commitments to phase out fossil fuels and accelerate the energy transition, while also demanding adequate financial support from advanced emitters.
Anwar said that natural gas will play an important role in the energy mix for Malaysia, which is among the top 5 LNG exporters in the world.
The Organization of the Petroleum Exporting Countries (OPEC) expects global oil demand to rise to 110 million barrels per day by 2045, representing 29% of energy supply as the global economy doubles, with a population of 9.5 billion, said the Secretary-General of the Organization of the Exporting Countries. Oil (OPEC), Haitham Al-Ghais.
To achieve its transition goals, Anwar said, the Malaysian government will release two roadmaps in the second half of the year, detailing the country’s potential to develop hydrogen fuel and carbon capture and storage technology.
He added that Malaysia is also committed to joining a global pledge to reduce methane emissions by 30 percent by 2030, against 2020 levels.
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