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Aramco CEO urges prudence in use of oil and gas resources

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With the world population projected to increase by two billion to nine billion people by 2050, and the global economy expected to be three or even four times larger, energy consumption would consequently rise.

Against this backdrop, Saudi Aramco President and CEO Khalid A. Al-Falih said all sources of energy, with oil and gas at the core, will be needed to meet the rapid increase in world energy demand by 2050.

In his opening keynote address at the 22nd World Energy Congress (WEC) 2013 in Daegu, Aramco CEO also urged prudence in the use of oil and gas resources, which “are the crown jewels of current and future energy supplies”, and called on the industry to improve their efficiency and environmental performance, and extend their use by combining them appropriately into the energy mix with other sources.

Helping to meet the future supply challenge will be the abundant availability of oil and gas, which, Al-Falih emphasized, will remain the core source of energy to the world.

Saudi Aramco is working on increasing conventional oil recoveries to 70 percent, which is more than double the current world average, and discovering large, untapped oil and gas resources, both onshore and offshore, and both conventional and unconventional, he further said.

“In fact, I’m delighted to announce that two years after launching our unconventional gas program in northern Saudi Arabia, we are ready to develop a 1,000-megawatt power plant, which will feed a massive phosphate mining and manufacturing center and drive that region’s development and the prosperity of its people.”

In line with the WEC theme “Securing Tomorrow’s Energy Today”, Al-Falih said the energy industry is healthier and more dynamic than before, but still faced a historic challenge to provide ready access to clean energy, particularly for billions of people around the world trapped in energy poverty.

“We need all energy sources, all industry players, all governments, all academic and research institutions, and all energy bodies, working together in the global energy village,” Al-Falih said. “And 9 billion people will have the energy they need and so well deserved to prosper,” he added.

Even with advanced energy management and efficiency programs that could lower consumption, demand is expected to be substantially higher by 2050 with the world’s rising population empowered by prosperity, he said.

Moreover, Al-Falih said that while nuclear, coal, alternatives and renewables have their challenges and limitations, these energy sources will unquestionably have a role to play in meeting the world’s future energy supply challenge.

He said the Kingdom is embarking on a vision to become a global hub of solar energy, and urged the energy industry to come together and unleash the full potential of alternatives and renewables.

Ultimately, the appropriate energy mix should be left for the market and technology to determine, Al-Falih said. But with the projected increase in the world population and ensuing demand, Al-Falih said there is room for everyone in the energy industry to prosper “under one roof”. He outlined four prerequisites for success: pragmatic global energy policies; long-term industry investment; R&D and technology; collaboration.

A stable economic environment and market certainty is critical to ensure long term investment by the industry, he said adding that Saudi Aramco has made massive investments to create and maintain the world’s largest spare oil production capacity of more than 2 million barrels per day.

“In the past two years alone, we have swung our production by more than 1.5 million barrels a day in order to meet market supply imbalances and retain that vital market stability the world needs,” Al-Falih said.

Pointing to the future, Al-Falih said “providing adequate, affordable, and acceptable energy to 9 billion people will be the challenge of our lives, and of those who will follow in our footsteps. But it also presents us all with the most inspirational opportunity.”

This article was first published in the Saudi Gazette.