Davos, May 24 (BNA) The president of Saudi Aramco told Reuters that the world is facing a major crisis in the oil supply, as most companies are afraid to invest in the sector as it faces pressures related to green energy, adding that it cannot expand production capacity faster. than promised.
Amin Nasser, head of the world’s largest oil producer, said on Monday he was committed to a goal of increasing production capacity to 13 million barrels per day from 12 million by 2027, despite calls to do so faster.
“The world is running at less than 2% of spare capacity. Before Covid, the aviation industry was consuming 2.5 million barrels per day more than today. If the aviation industry speeds up, it will face a big problem,” Nasser told Reuters. On the sidelines of the World Economic Forum in Davos.
“We were going through an energy crisis due to a lack of investment. It started to have an impact in the wake of the pandemic,” he added.
Nasser said that the Covid restrictions in China will not last long, and therefore global demand for oil will resume its growth.
Saudi Arabia currently produces 10.5 million barrels per day, or every tenth of the world’s, and is likely to raise production to 11 million barrels per day later this year when a broader agreement between OPEC and its allies expires.
Riyadh has faced calls from the West for faster production and faster capacity to help combat the energy crisis.
“If we could do it (capacity expansion) before 2027 we would have done it. That’s what we are telling policy makers. It takes time.”
Nasser also said that dialogue between the oil industry and policymakers about the transition from fossil fuels to zero-carbon energy has been problematic.
He said, referring to last year’s United Nations climate conference in Glasgow, Scotland.
He also said that last year’s message from the International Energy Agency that global oil demand was declining and that there was no need for new investments in fossil fuels had a profound impact.
“We need a more constructive dialogue. They say we don’t need you by 2030, so why go and build a project that takes 6-7 years. Your shareholder won’t let you do that.”
He said the energy transformation process has often proven chaotic and turbulent.
“There is no good plan,” he said. “When you don’t have Plan B ready, don’t demonize Plan A.” “The pressure and the rhetoric is — don’t invest, you’ll have stranded assets. It makes it difficult for CEOs to make investments.”
The so-called confined asset theory is the idea that large oil and gas reserves are left unused because they are needed for a longer period.
Nasir said slips during the global energy transition will only lead to increased coal use by many Asian countries.
“For policy makers in those countries, the priority is to put food on the table for their people. If coal can do that at half the price, they will do it with coal.”
He said Aramco, of which Saudi Arabia is a major shareholder, is different because it is investing in both fossil fuels and the energy transition.
“This is our difference from others. But what we add is not enough to achieve energy security in the world.”
MI