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Amin H. Nasser, the CEO of Saudi Aramco, the world’s leading oil firm, shared his insights on the current state of the energy industry, the impact of geopolitical events, and the ongoing energy transition during a conversation with the Energy Intelligence Forum. Nasser emphasized the need for constructive dialogue to address the challenges and opportunities facing the sector. Here are the key highlights from the interview:

Impact of Ukraine Crisis and European Energy Crisis:

  • The crisis between Russia and Ukraine has intensified the tightness in the global energy market, but the market was already under strain before the crisis.
  • While the crisis will impact crude oil flows, the more significant concern is in the gas and LNG market due to limited spare capacity and long-term contracts.

Aramco’s Operations and Market Strategy:

  • Aramco’s main market is in Asia, and the company intends to grow its investments in the region.
  • Despite Russian discounts, Aramco maintains its market position due to its long-term contracts and strong customer relationships.
  • The focus in Europe will be on gas and LNG, which could face significant challenges due to limited spare capacity.

Aramco’s Approach to Energy Transition:

  • Aramco is expanding its gas production and is committed to reducing emissions. The company plans to export blue hydrogen and considers other alternative fuels.
  • Aramco issued a sustainability report with a roadmap to achieve net-zero Scope 1 and 2 emissions by 2050, including carbon capture and sequestration (CCS) projects and renewable energy initiatives.
  • The company believes in working in parallel to develop oil and gas resources while pursuing alternative energies.

Underinvestment and Return of Investment:

  • There is a lack of investment in long-term projects that can sustain production levels over decades. Companies face pressure from regulators, policymakers, and shareholders, leading to a focus on short-cycle projects.
  • Aramco is working on expanding its capacity to 13 million barrels per day (bpd) by 2027, with significant progress in constructing Marjan, Berri, Zuluf, and Safaniyah projects.

Demand Outlook:

  • Aramco believes that demand for oil will continue to grow beyond 2030, despite efforts to develop alternative energy sources.
  • The company is committed to reducing emissions and enhancing efficiency while addressing energy demand.

Need for Constructive Dialogue in Energy Transition:

  • Nasser emphasized the importance of constructive dialogue among stakeholders in the energy industry to address the energy transition effectively.
  • The industry needs to work together to ensure a steady supply of energy with lower emissions while avoiding over-dependence on coal.

Aramco’s Net-Zero Target:

  • Aramco has a net-zero Scope 1 and 2 emissions target by 2050, and the company is progressing well towards achieving it through various initiatives, including CCS, renewables, and nature-based solutions.

Nasser’s Call for Collaboration:

  • The energy industry has the capabilities and expertise to lead the energy transition, but there is a lack of constructive dialogue and collaboration.
  • Nasser believes that open and meaningful discussions are essential for finding solutions and successfully transitioning to a more sustainable energy future.