"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 barrels of oil per day. In fact, by our estimates, oil demand fell below 90 million barrels of oil per day for only 12 weeks. So, we know the world still needs oil and gas. That is a fact," Dr. Al Jaber said.
He 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 barrels per 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," Dr. Al Jaber said.
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 G42, we’ve formed AIQ – a company specially formed to develop efficient AI solutions for the energy industry." There are also opportunities to maximise value in this tough environment and ADNOC is taking advantage of the UAE and Abu Dhabi’s status as a trusted, business-friendly environment to complete several landmark transactions, Dr. Al Jaber said. 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 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," Dr. Al Jaber 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 March 29, 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." Another area ADNOC is focusing on unlocking value from is in the downstream as it delivers on its downstream expansion strategy it launched in 2018. Dr. Al Jaber said ADNOC’s approach is to invest today to strengthen its position tomorrow by enhancing the UAE’s industrial base and increasing in-country value to the country, adding that ADNOC’s downstream expansion presents great opportunities for partners.
"Our joint venture with the Abu Dhabi holding company – ADQ – is an essential piece to this puzzle. This JV is an investment vehicle for partners to join us in accelerating the development of our petrochemicals and derivatives industry here in Abu Dhabi.
"We have the oil and we have the natural gas. We have the infrastructure and we have the logistics.
Everything you need and everything in one place. And all in the perfect geographic location. Together with ADQ, I invite you to join us on the ground floor of a great opportunity for you, as well as for ADNOC," Dr. Al Jaber said.
Concluding his remarks, 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 Dr. Al Jaber.
"In the next ten years, we will reduce our greenhouse gas intensity by a further 25 percent. 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," Dr. Al Jaber said Following Dr. Al Jaber’s speech, a special ministerial panel discussion took place virtually featuring Suhail Mohamed Al Mazrouei, UAE Minister of Energy and Infrastructure; Prince Abdulaziz bin Salman Al-Saud, Minister of Energy of the Kingdom of Saudi Arabia; Pavel Sorokin, Deputy Minister of Energy of the Russian Federation; and Mohammad Barkindo, Secretary-General of the Organisation of Petroleum Exporting Countries, OPEC.
ADIPEC is taking place virtually from November 9-12. Hosting over 70 ministers, CEOs, and global oil and gas business leaders as speakers, ADIPEC has convened the companies, decision, and policymakers who shape the future of the oil and gas industry for four days of focused business, dialogue and knowledge-transfer that addresses today’s energy challenges and defines tomorrow’s hydrocarbon landscape.
© Copyright Emirates News Agency (WAM) 2020.