Saudi Arabia’s state oil giant Saudi Aramco plans to invest more than US$300 billion in the next 10 years in oil and gas as it looks to counter the effects of investment decline and a potential energy shortage, its chief executive said.
“About $1 trillion in investments has been lost in the current downturn, concurrent to growing oil demand and the natural decline of developed fields. Conservative estimates suggest we need about 20 million [additional] barrels per day over the next five years to counter these effects,” chief executive Amin Nasser, said at the World Petroleum Congress in Istanbul according to a Saudi Aramco statement.
The volume of conventional oil discovered around the world halved over the past four years, compared to the previous four, according to Nasser, leading to an investment shortfall and the start of a cycle that may inhibit a future energy transition.
Saudi Aramco's investments over the next decade will reinforce its “preeminent position in oil, maintain… spare oil production capacity and pursue a large exploration and production program centered on conventional and unconventional gas resources,” Nasser said.
He predicted in the next 25 years, the world economy, would double, adding two billion energy consumers, resulting in a lengthy energy transition that alternative sources such as renewables cannot adequately support.
“There’s a growing belief that the world can prematurely disengage from proven, reliable energy sources like oil and gas, on the assumption that alternatives will rapidly deploy,” Nasser said.
The company has identified refining and chemicals, among other areas, as key drivers of long-term value and growth, while pushing for cleaner energy such as gas.
“We aim to double our natural gas production to 23 billion standard cubic feet per day (scf/d) over the coming decade, and raise the share of gas in the Kingdom’s utilities to about 70 percent, the highest of any G20 nation,” Nasser said.
“We have collaborated with many oil and gas companies to promote low-emission solutions, to include our commitment to the Oil and Gas Climate Initiative’s $1 billion investment fund to develop and rapidly deploy those technologies.”
Nasser also said that Saudi Aramco is prioritising the direct conversion of oil to petrochemicals as a major part of its long-term strategic focus.
The company is also investing in solar energy, having launched a phased program to build an initial renewable capacity of 9.5 GW by 2023.
Nasser said that while the industry can take pride in a history of significant economic contributions, it must adopt a future strategy calculated for the energy transformation.
“Industry leaders and policy makers must develop an aligned and compelling narrative to attract the level of investments we need,” he said.
“Part of that effort will be transforming our own business model to ensure that oil and gas are not just proven, reliable energy sources, but are as clean and affordable as possible, without compromising the world’s energy security,” he said.