His Excellency Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company (ADNOC), called on the oil and gas industry to unite in driving the post-COVID recovery during his opening keynote address of the 36th edition of the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), which has seen almost 20,000 participants register for the online event.
H.E. Dr Al Jaber emphasized the importance of the oil and gas industry in enabling economic development in the post-COVID recovery by ensuring a steady and reliable supply of energy to power growth. He highlighted the resilience of oil demand and stressed the need for the industry to balance caution with optimism, ensure business continuity and not lose sight of the long-term as we face the realities of a world turned inside out by the pandemic.
“For a start, we know the world will still need oil and gas when all of this is done. Even at the height of the lockdowns of March and April, the world still consumed 75 million bbl/day. In fact, by our estimates, oil demand fell below 90 million bbl/day for only 12 weeks. So, we know the world still needs oil and gas. That is a fact.”
H.E. Dr Al Jaber added that the months ahead will be challenging, and oil demand may fluctuate, but the long-term fundamentals of the industry remain intact.
“We expect that oil demand will grow to over 105 million bbl/day by 2030, and continue to supply over half the world’s energy needs for many decades to come. At the same time, the petrochemicals sector will continue to grow at a healthy pace through and beyond 2050, in line with a steadily expanding global middle class. These are long-term positive trends and they highlight the central role that our industry can and should play in a post-COVID recovery,” he said.
H.E. Dr Al Jaber added that, despite the current challenges, there is an opportunity for the industry to examine how it can be more agile and reduce costs. He referenced the transformation ADNOC started four years ago, which is centered on driving down costs and unlocking value across its portfolio and said he sees an opportunity to accelerate the progress by leveraging technology.
“For example, take the way we have doubled down on embedding the latest digital technologies throughout our operations. We have saved over $1 billion in the last four years by leveraging big data through our Panorama command center. We have captured an additional $2 billion by adopting digital drilling. And, together with the artificial intelligence specialists Group 42, we’ve formed AIQ – a company specially formed to develop efficient AI solutions for the energy industry.”
H.E. Dr Al Jaber said there are also opportunities to maximize value in this tough environment, and ADNOC is taking advantage of the United Arab Emirates (UAE) and Abu Dhabi’s status as a trusted, business-friendly environment to complete several landmark transactions. ADNOC’s multi-billion-dollar deals completed this year prove “the enduring, underlying value of our industry.”
The oil and gas industry has brighter days ahead and there is even more value to be captured, according to H.E. Dr Al Jaber. He explained how ADNOC’s move into trading will capture more value from every barrel it produces.
“At ADNOC, we are discovering this truth as we move into active trading. In September, we completed our first derivatives trade. Next month, we will begin trading our portfolio of refined products,” he said, referring to the planned start of trading by ADNOC Global Trading (AGT), a joint venture with Eni and OMV.
He continued by explaining the significance of Ice Futures Abu Dhabi (IFAD), following the recent announcement by Intercontinental Exchange (ICE) that it aims to begin trading operations on 29 March 2021. “IFAD will be the first exchange to include futures contracts based on Abu Dhabi’s popular Murban grade. This trading platform will operate at the heart of growth markets and offer great value for producers and customers alike.”
Concluding his remarks, H.E. Dr Al Jaber pointed out there is an opportunity for the oil and gas industry to mitigate climate change and ensure the industry’s resilience by increasing carbon efficiency. He stressed every player has a role to play in enabling this goal. While ADNOC is already one of the least carbon-intensive producers in the industry, it is not resting on this position, according to H.E. Dr Al Jaber.
“In the next ten years, we will reduce our greenhouse gas intensity by a further 25%. We will expand our carbon capture program so that it stores 5 million tonnes of CO2 every single year. And importantly, we will explore the potential of new fuels, such as hydrogen. We will do all of this because there is one more thing we know for sure. We know that when the COVID pandemic fades into memory, the world will still need oil and gas and will want that oil and gas to be as low carbon as possible,” H.E. Dr Al Jaber said.