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Thu, Nov 14, 2024 | Jumada al-Awwal 12, 1446 | DXB
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UAE calls for affordable energy prices
In an interview with CNN, Al Mazrouei said controlling oil price rise is imperative during the transition to clean and renewable energy sources and reiterated calls for technology investments that would target emissions
Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Infrastructure, stressed the need of accelerating new investments to meet rising energy demand as a number of Opec+ member countries cut oil production. — AP file photo
Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy and Infrastructure, has reiterated the nation’s commitment to transition into renewables but stressed the need to control the rise in oil prices during the transition process.
In an interview with CNN, Al Mazrouei said controlling oil price rise is imperative during the transition to clean and renewable energy sources and reiterated calls for technology investments that would target emissions.
“We need to fight the emissions, not the fuel,” he said.
On UAE's plans to increase production to five million barrels per day from the current just over three million, he said the target was brought forward to 2027 to provide the maximum support to this transition toward clean forms of energy.
“We thought bringing it forward will help stabilising the prices avoiding high volatile oil market. And we are trying to do it with the increase. We need to make the energy prices affordable during transition.”
“People are thinking about three things — security of supply, affordability, and sustainability — but they prioritize them differently. We need to work on the three of them not only pick one and say this is the most important and forget the other two.”
“We are transitioning. One thing that is not helping is high volatile commodity prices, whether it's oil. So, we're trying to avoid what happened in the gas by encouraging investments. We spoke with everyone and we encouraged everyone but saw a very slow response.”
The minister also stressed the need of accelerating new investments to meet rising energy demand as a number of Opec+ member countries cut oil production.
On whether boosting investment in oil and gas puts UAE in conflict with global climate goals, he said there is currently no base load that is available to consumers and countries that is a totally 100 per cent green, unless you're talking about nuclear.
"So being practical, we know that the highest contribution will come from renewable energy. That's why we believe in it, we're investing in it. But at the same time, someone needs to be investing in the base load; someone needs to be investing in hydrocarbon,” he said.
A model of 3D printed oil barrels is seen in front of displayed stock graph going down in this illustration. — Reuters
He said oil companies are reluctant to invest, because of their shareholders. “There is no clarity on who is going to invest and what is the demand in certain countries moving forward. You need to juggle with the three challenges, sustainability, security of supply, and affordability,” he said.
The minister said while China’s reopening will impact the oil market positively in the short term but demand from many countries is slowing due to the economic situation.
“We are also having a mild winter this year. It has helped also the demand side. There is an issue in supply. There is an issue that we've been always talking about, which is the lack of investments. And we are at a very important transition. And we need to have resources available.”
Last week in Abu Dhabi, on the sidelines of the Global Energy Forum, Al Mazrouei underlined the need of accelerating new investments to meet rising energy demand as a number of Opec+ member countries cut oil production and affirmed the UAE's commitment to providing the necessary support to ensure a balanced oil market in line with its plan to advance the five million barrels per day production target to 2027.
Abu Dhabi National Oil Company (Adnoc), which with a current production capacity of more than four million bpd, accounts for almost all the UAE’s oil production, recently announced plans to spend $150 billion on capital expenditure in the next five years the UAE prepares to advance its five million barrels per day of oil production capacity target to 2027 on the back of improved market fundamentals.
Adnoc’s accelerated production capacity target is underpinned by the UAE’s “robust hydrocarbon reserves”, which have increased by two billion barrels of oil and one trillion cubic feet of natural gas this year.
Al Mazrouei has also underscored the importance of accelerating investments in gas exploration and production as it is one of the major sources of energy today.
— issacjohn@khaleejtimes.com
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