The global oil industry faces a “crisis of perception” since the industry is viewed as a one that has no future, said Saudi Arabia’s state oil company. It however cautioned that such an attitude could jeopardise global energy security.
Because of the growth in the number of people using products such as electric cars, the global oil sector only has a few years left, according to the suggestions of financiers at the World Economic Forum in Davos given to him last month, said Amin Nasser, the chief executive of Saudi Aramco.
He said that the belief that oil and gas firms have little or no future is rampant among policymakers, regulators, investors and NGOs.
“My encounters in Davos showed me that fewer and fewer of our stakeholders accept logic and facts, least of all from us. We are therefore facing what I would call a crisis of perception,” he told an industry audience in London.
“Because it [the crisis] threatens our industry’s very relevance, it puts our ability to supply ample, reliable and affordable energy to billions around the world at risk, which in turn risks their energy security,” he said.
Nasser called an exaggerated theory the claims of many most authorities that there would be peaking in the demand for oil within the next two decades.
Together with the US and Russia, Saudi Arabia is the amongst the largest producers of oil and the country now has wants to further enhance its output in the coming decade.
While not explicitly mentioning climate change, Nasser said understanding that the demand of the society from cleaner energy and reduction in emission of carbon dioxide is the answer to the sector’s image problem. The company would become a “global leader” in another fossil fuel – gas, he said when he was asked what Saudi Aramco thought of the Paris climate agreement.
Saudi Aramco would not yet be investing in solar power or the renewable energy segment because the Gulf kingdom has already made significant investments in solar power, he said but added that the company would certainly make more investments in petrochemicals.
There would be a shortfall in supply of oil in the world in the next five years of the company did not make investments now, Nasser said, which would result in higher prices for the fuel which would further create the image of more than necessary profits were being made by the industry. Saudi Aramco is reportedly the world’s most profitable company.
The comments of the Saudi Aramco head was echoed by Bob Dudley, the chief executive of BP. “The world is driven by myths and not facts,” he said.
“I think we have a particular challenge with [the perception of] energy. But I think business in general has a huge communications issue. I think we are seeing the effects of the financial crisis rolling through now, particularly in the western world, and everybody is looking for people to blame. Unfortunately I think the political system is starting to blame companies and business more,” Dudley said.
(Adapted from TheGuaredian.com)