Low carbon oil to play central role in energy transition

ADNOC CEO at CERAWeek 2021Low carbon oil will play a central role in the energy transition, according to Dr Sultan Ahmed Al Jaber, the UAE minister of industry and advanced technology and managing director and group CEO of the Abu Dhabi National Oil Company (ADNOC)

Speaking at CERAWeek alongside Vicki Hollub, CEO of Occidental, during a virtual panel session, Dr Al Jaber explained that the UAE is uniquely positioned to provide lower carbon oil and gas for as long as the world still relies on hydrocarbons energy.

“When it comes to low carbon oil and gas, the UAE has a dual advantage; a leadership that has always put environmental protection first, and a natural advantage, because our geology gives us some of the least carbon-intensive oil in the world,” Dr Al Jaber said as he went on to explain that the UAE has been preparing for the energy transition for over 15 years.

“Rather than shy away from it, we have always seen the energy transition as an opportunity to diversify and develop our economy. As the founding CEO of Masdar, I was closely involved in growing the UAE’s renewable investments, and today, the UAE has three of the largest and lowest-cost solar projects in the world with significant renewable energy projects in thirty countries globally.

“Having said that, we also understand that the world will still need oil and gas for many decades to come, so our mission at ADNOC is to provide that oil and gas as responsibly as possible.”

Responding to a question on climate change from the moderator of the session, the leading energy economist and Pulitzer-Prize winning author Dr Daniel Yergin, vice-chairman of IHS Markit, Dr Al Jaber stressed the UAE will continue its role as a regional leader and convener of progressive climate action, building on its record as the first country in the region to sign the Paris Accords.

He highlighted the importance of carbon capture utilisation and storage (CCUS) in the fight against climate change and said ADNOC saw the technology as a ‘game-changer’ when it introduced it in the region four years ago by building the region’s first and largest industrial-scale CCUS facility.

“The truth is, there is no credible way of reaching global climate goals without the widespread adoption of CCS and this goes beyond just the oil and gas industry. In fact, I see an important role for CCS across sectors that are hard to decarbonise and use the most energy such as heavy industry manufacturing and chemicals. And ADNOC is ready to partner with others within and outside our industry to enable wider CCS adoption,” Dr Al Jaber added.

ADNOC can capture 800,000 tonnes of carbon dioxide (CO2) annually through its Al Reyadah facility in Abu Dhabi and is expanding the capacity of this programme to capture five million tonnes every year by 2030.

Dual positive impact of vaccines and stimulus programmes from governments

“With vaccines rolling out around the world, 2021 is looking brighter. Here in the UAE, we have a very proactive vaccination programme. More than six million doses have been administered so far and we are closing in on 50 percent coverage across our entire population – the second-highest rate in the world.

Vaccination coverage is one of the keys to recovery. The other is economic activity. In response to the pandemic, governments have been quick to unleash stimulus like we have never seen before. There is likely more on the way, and while we should remain vigilant about potential inflationary risks, we should acknowledge leaders around the world for acting quickly decisively.

Stressing the need for the oil and gas industry to focus on ‘what we can control’ Dr Al Jaber explained how ADNOC adopted this approach as part of its transformation.

“Over this period, we have focused on improving our performance and enhancing efficiency throughout our operations. For ADNOC, we believe one of the essential enablers for increased efficiency is technology. For example, through technology upgrades to our drilling business, which is the largest in the region, we have driven efficiency gains of more than 35%, enabling substantial cost savings.

“At the same time, we remain focused on capital efficiency by proactively managing our asset and resource base, while attracting top tier global investors to the trusted, business-friendly environment of the UAE. In short, to remain competitive, you have to be a low-cost producer, and we continually focus on ways to enhance our position as one the lowest cost producers in the world,” Dr Al Jaber said.

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