Low investment in oil could cause massive economic disruption: ADIPEC
Just days head of the upcoming COP27 climate change talks, officials from the two oil-rich countries affirm that low investment in oil production could cause massive disruptions in global markets.
During the ADIPEC conference on energy held in Abu Dhabi on Monday, the Minister of Energy of Saudi Arabia Prince Abdulaziz bin Salman and the head of the UAE's Abu Dhabi National Oil Company (ADNOC), Sultan Al-Jaber, stressed that investing in oil production is vital to the global economy.
The remarks come ahead of the upcoming COP27 talks on climate change that will be held in Egypt in November.
During a panel on future prospects for global oil demand, Al-Jaber told attendees that under-investment in oil production would trigger shocks to the global economy that would make recent market disruptions appear as a "minor tremor".
Prince Abdulaziz bin Salman said that both the UAE and Saudi Arabia were increasing production capacity.
"We and the UAE are increasing our production capacity. We and the UAE are increasing our refining," Prince Abdulaziz said.
"We and the UAE are going to be the exemplary producer: hydrocarbon producer, but also achieve all the sustainability goals," he added.
The 2022 OPEC World Oil Outlook (WOO) was launched today at ADIPEC during a strategic session, featuring contributions from across @OPECSecretariat, as well as Alfred Stern, CEO, @OMV and UAE’s Minister of Energy and Infrastructure, Suhail bin Mohammed Al Mazrouei. pic.twitter.com/RVyiJcFXhY— ADIPEC (@ADIPECOfficial) October 31, 2022
Al-Jaber said that by 2050, the world will need 30% more energy, adding that "The world needs all the solutions it can get. It is not oil and gas, or solar, not wind or nuclear, or hydrogen... it is all of the above."
While both stressed that oil remains an important resource for the supply of energy, they affirmed commitments to lower emissions and increase production from renewable or less-polluting sources.
They, likewise, added that OPEC+'s decision to cut oil production by two million barrels a day announced earlier this month was unwelcomed by Washington due to it affecting the US and the EU's long-term energy needs.
"If we zero out hydrocarbon investment, due to natural decline, we would lose five million barrels per day of oil each year from current supplies," Al Jaber said.
"This would make the shocks we have experienced this year feel like a minor tremor. If this year has taught us anything, it taught us that energy security is the foundation of all progress."
The opening day of ADIPEC 2022 saw the biggest gathering of energy industry professionals in the world as dialogue between high-level industry stakeholders got underway to accelerate realistic solutions for a pro-climate and pro-growth energy transition. pic.twitter.com/autqgiAyNZ— ADIPEC (@ADIPECOfficial) October 31, 2022
Earlier today, it was reported that Saudi Arabia and the UAE reaffirmed their support to OPEC and its partners' decision to limit oil production, even as the US envoy warned of "economic uncertainty" looming over the world.
US legislators have already jeopardized arms deals with the Kingdom, accusing it of backing Russian President Vladimir Putin in his conflict with Ukraine.
Saudi Energy Minister Prince Abdulaziz bin Salman hinted at just that in brief remarks at the event. "We don’t owe it to anybody but us,” the Prince said, noting that the upcoming UN climate change summits will be held in Egypt and the United Arab Emirates. “It was done for us, by us, for our future, and we need to commit ourselves to that."