Saudi energy behemoth Aramco is investing "big time" in renewables and cleantech but wants the world to ditch the fantasy economics of phasing out oil and gas, according to its President and chief executive officer Amin Nasser.
Speaking at global energy conference CERAWeek organized by S&P Global in Houston, Texas, U.S., on Monday (March 18, 2024), Nasser, boss of the world's largest traditional energy company, said: "Peak oil demand [scenarios] are unlikely for some time to come, let alone 2030. However, the current discourse on energy transition ignores this reality. The world should abandon the fantasy of phasing out and gas."
He added that the world's aspiration should be about reducing carbon emissions as part of a multidimensional energy complex with multiple sources and not the madness of eliminating entire industries.
Nasser said governments around the world were not being open and forthright about the true costs of the energy transition with their consumers and the choices in front of them when subsidies are not available. "For instance, without subsidies electric vehicles are up to 50% more expensive than internal combustion engine vehicles."
He also slammed a needless campaign to paint the oil and gas industry as the "enemy" of energy transition, and it could not be further from the truth.
"We are investing big time in low [to zero] carbon technologies. We have incrementally invested in wind, solar and carbon capture and storage projects and are doing our part.
"These investments are currently under the Aramco [corporate] umbrella but will ultimately be spun off as a separate subsidiary/business of ours. We have also earmarked $7.5 billion for venture capital investments in cleantech."
Aramco is also expanding its liquefied natural gas business, including reportedly hunting for investments in LNG export projects in the U.S. The move may materialize via minority equity stakes in LNG projects or long-term sale and purchase agreements.
Elsewhere in his address to CERAWeek, Nasser said the global oil market was looking strong in 2024. In recent days, Brent oil futures have risen to four-month highs of above $85 per barrel.
At 11:13 am EST on Monday, the Brent front-month futures contract was up 0.86% or $0.73 to $86.05 per barrel, while the West Texas Intermediate futures contract was trading at $81.79 per barrel, up 0.93% or $0.75.
Nasser's comments also follow OPEC's latest oil demand growth forecast for 2024 which was maintained last week at 2.25 million barrels per day (pbd). The oil producers' group, which counts Saudi Arabia among its leading members and key power-brokers, cited "additional upside potential" for global economic growth over the course of the year.
Consumer think-tank International Energy Agency revised its own demand forecast for 2024 upward as well last week by 110,000 bpd to 1.3 million bpd. However, that is still some way short of OPEC's upbeat forecast.
Nasser also said attacks by Yemen's Iran-backed Houthi rebels on international shipping in the Red Sea have increased insurance premiums on oil cargoes to Europe, but it is a problem the wider industry is simply learning to live with.
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