Investment in energy infrastructure remains a primary challenge despite the ongoing coronavirus pandemic, Saudi Arabia’s Deputy Minister for Policies and Strategic Planning at the Kingdom’s Ministry of Energy Dr Nayef al-Musehel said Sunday.
Al-Musehel was speaking during the second day of the Riyadh-held T20 Summit, a virtual event convened by Saudi Arabia as the Kingdom holds the presidency of the G20 for this year. Think20 (T20) is the research and policy advice network of the Group of 20 (G20), serving as a place to build ideas that the G20 can put into action.
“The primary challenge does remain [energy] investments are needed of course, infrastructure development will take time, not to mention economic sectors need to adapt to this economic and energy efficiency by looking to innovate, by looking to create additional sources of competitive advantage going forward,” al-Musehel said.
Investment into new oil and gas production has collapsed this year as oil and gas supermajors and national oil companies have dramatically slashed their budgets for new infrastructure investment, reflecting an unprecedented drop in demand for petroleum products in 2020 due to the coronavirus pandemic.
The collapse in infrastructure investment and capital expenditure projects has already led to experts warning of a looming energy crisis, with the global economy set to suffer as a result.
One important question that needs to be answered is, “How do we come back to the original trajectory of economic growth in 2019 through this pandemic and what measures need to be taken to ensure it is resilient and flexible enough?” al-Musehel commented.
Dr Majid al-Moneef, the chairman of King Abdullah Petroleum Studies and Research Center (KAPSARC) in Saudi Arabia noted this challenge earlier on Sunday at the T20 Summit.
“While the IMF forecast that the global economy will shrink by 4.4 percent, the middle east economies are expected to decelerate by 6.6 percent. Although the Middle East economies are expected to return to growth in 2021, this will not be enough to return to 2019 levels,” al-Moneef said.
KAPSARC is co-leading the T20 summit alongside the King Faisal Center for Research and Islamic Studies.
The two-day T20 Summit is the capstone event to the T20 summit season. The Summit will conclude on Sunday with T20 presenting its Communique to representatives of the G20. The document comprises of 32 policy proposals across seven categories for consideration by G20 leaders at the G20 Virtual Leaders’ Summit next month.