Dr. Sultan Ahmed Al Jaber, UAE Minister of State and Group CEO of the Abu Dhabi National Oil Company (ADNOC) called on the oil and gas industry to modernise in response to disruptions on multiple levels and a fast-evolving energy landscape.
Delivering the opening keynote address at ADIPEC in Abu Dhabi, Al Jaber said the oil and gas industry is being disrupted by new technologies, new business models, new forms of energy, and a new geopolitical order.
“This era of disruption is just the beginning and will only gather pace over time," he said. "Yet, the oil and gas company of today can be a winner tomorrow, if it operates at a lower level of cost and a higher level of performance; if it brings digital into the core of its operations; if it embeds sustainability into its DNA; and if it rethinks how to leverage its partnerships, enable its people and re-center its customer relationships.
“This is the mission we defined together last year as Oil and Gas 4.0,” he continued. “By doubling down on this mission to modernise, the industry will remain an essential pillar of the future diversified energy mix."
He noted creative partnerships as a key enabler of responsible economic growth, which Al Jaber said would keep them "at the cutting edge of innovation and we will continue to drive growth and prosperity."
“The fact is by 2040, all the energy currently consumed in the United States, India, and Japan will be added to global energy demand. And in even the most fast-paced transition scenarios, oil and gas will provide the source for over half of it. These facts are undisputed and simply make a compelling business case to invest in the future of our industry,” he said.
Al Jaber went on to explain how ADNOC, in response to the shift of economic power from west to east, is deepening its partnerships globally and pivoting towards Asia where energy demand is growing fastest. He said ADNOC is on track to expand its oil production capacity to 4mn barrels per day (mmbpd) by the end of 2020 and is finding new reserves of natural gas as it gets closer to achieving gas self-sufficiency for the UAE.
“New discoveries this year include over 7bn barrels in oil reserves, 58trn cubic feet of conventional gas, and significantly over 160trn cubic feet of unconventional gas. And, as a result, the UAE has moved up from 7th to 6th place in the ranking of the largest oil and gas reserves in the world,” he said.
Referring to an earlier announcement by the Intercontinental Exchange (ICE) that it will set up a new futures exchange in Abu Dhabi to host the world’s first futures contract based on ADNOC’s Murban crude oil, Al Jaber said ADNOC will join major international oil companies as founding partners of the new exchange known as ICE Futures Abu Dhabi (IFAD).
“Leveraging the UAE’s position at the pivot point of growth economies, IFAD will be home to the Murban Futures Contract. Crucially, this contract will replace retroactive pricing with forward pricing. It will allow buyers to hedge their risk in the open market. And it will help capture more value from every barrel we produce,” Al Jaber said.
He added that ADNOC is leveraging the UAE’s geography as the company expands its downstream operations and creates a world-scale refining and petrochemicals complex.
Al Jaber stressed technology is also key to unlocking one of the central challenges facing the oil and gas industry: how to deliver more energy with fewer emissions.
“We are expanding the Middle East’s first commercial-scale carbon capture utilisation and storage facility to capture at least 4.3mn tonnes of CO2 annually by 2030. That equals the amount of CO2 captured annually by 5mn acres of trees or forest over twice the size of the UAE,” Al Jaber said.