Page 8 - MEOG Week 47

MEOG POLICY MEOG

Riyadh to maintain focus

on oil despite transition

SAUDI ARABIA SAUDI Arabia intends to maintain oil produc- blue hydrogen from the oil and gas residues,
tion and exports for “decades to come” while capture and utilise the resultant CO2 and export
countries around the world ramp up their efforts hydrogen in the form of blue ammonia to Japan.
to embrace the energy transition. Al-Falih noted: “At the same time, maybe we
It is perhaps unsurprising that while the most will be exporting the same level of energy that is
progressive and least oil-dependent Arab states generated from renewables and exported in dif-
have latched on to the renewables energy band- ferent forms. One of them will be blue and green
wagon, the world’s largest oil producer is tem- ammonia. This is part of an alignment we have
pering expectations. The kingdom is investing with Japan over a number of years that we are
in renewables, but given the importance of oil going to work with them.”
exports to its budget, Saudi Arabia was never He explained: “Capturing energy in Saudi
likely to plunge into alternative forms of energy. Arabia from renewable sources as well as fossil
Speaking during last week’s G20 Summit fuels, dealing with the carbon through CCS, cap-
in Riyadh, the country’s investment minister, turing the carbon, maybe storing it in reservoirs
Khalid al-Falih, said: “The kingdom believes or maybe converting it to marketable products,
that [in] the energy transition that the world is then converting hydrogen to ammonia and ship-
going to need all energy sources, and that the ping it to faraway locations like Japan, Korea,
transition from fossil to all-non-fossil fuels is Europe, is part of this energy transition that is
a multi-decade, perhaps a multi-generational, enfolding.”
journey that we have to take deliberately and Green initiatives include the Sakaka solar
carefully and make sure it does not disrupt and project and NEOM, the kingdom’s $500bn smart
break the global economy.” city currently under construction on the Red Sea
Al-Falih was previously Saudi Arabia’s energy coast where a world-scale hydrogen facility is
minister and the chairman of state-owned Saudi being created at a cost of $5bn, with US firm Air
Aramco before that. Products having agreed to be the sole offtaker.
He added: “I wouldn’t be surprised if we con- The comments came as data was published
tinue to export at the level we are exporting for by the Joint Organizations Data Initiative (JODI)
decades to come, in terms of oil and gas, because showing that Saudi crude exports had increased
the world needs it.” during September to 6.066mn barrels per day,
However, al-Falih did allude to efforts to an increase of more than 1mn bpd compared to
reduce carbon emissions associated with oil and June.
gas, which have been highlighted by Aramco’s Saudi Arabia is not the only Gulf state to be
inclusion of carbon intensity data in its corporate taking a cautious approach to the transition, with
reporting and the joint pilot project with Japan’s Kuwait so far yet to make any renewable energy
Institute of Energy Economics (IEEJ) to produce investments.™

P8 www. NEWSBASE .com Week 47 25•November•2020