The Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2020 Virtual opened yesterday, with a bullish forecast for the sector to emerge stronger from the COVID-19 pandemic with opportunities far outweighing challenges.
The forecast came from His Excellency Dr. Sultan Ahmed Al Jaber, the UAE’s Minister for Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company (ADNOC), which is hosting the virtual programme.
In his keynote address, at the opening of ADIPEC 2020 Virtual’s Strategic Conference programme, which runs until November 12 under the patronage of UAE President HH Sheikh Khalifa bin Zayed Al Nahyan, Al Jaber extended his congratulations to US President Elect, Joe Biden, and Vice President Elect Kamala Harris, before sharing an optimistic outlook for an oil and gas industry challenged by “strange times”.
While stressing that the oil and gas industry is facing “new questions every day”, with answers appearing “harder to find than ever before,” Al Jaber said the entire sector was unified in meeting the challenges of the pandemic, adding the industry would survive fortified.
“We are, all of us, in this together,” he said. “And together we can come through it… and emerge stronger…much stronger.”
The key, Al Jaber said, is the certainty of a post-COVID upswing in oil and gas demand and of sector resilience borne out of its talent base and capabilities.
“The months ahead will be challenging, and oil demand may fluctuate,” he cautioned: “but make no mistake… the long-term fundamentals of our industry remain intact.
“We expect 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,” he added. “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.”
Al Jaber said opportunities are on the horizon for the industry to become more agile and safe with a lower cost base. ADNOC, he said, would seize opportunities to accelerate its drive to control costs and unlock value across its portfolio. He disclosed that the UAE oil major has already saved over US $3 billion over the past four years by leveraging big data through its Panorama command centre and adopting digital drilling.
Al Jaber also said ADNOC would strengthen its active trading foothold, which saw it recently complete its first derivatives trade. “Next month, we will begin trading the full portfolio of our refined products and the first quarter of next year will see the launch of Ice Futures Abu Dhabi or ‘IFAD,’ he said. As the first exchange to include futures contracts based on Abu Dhabi’s popular Murban grade, IFAD is expected to offer great value for producers and customers alike.
Al Jaber also said ADNOC would expand its downstream operations by investing to enhance the UAE’s industrial base. “Our joint venture with the Abu Dhabi holding company – ADQ - 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, everything in one place and all in the perfect geographic location.”
Opportunity also lay in the industry’s need to do more for climate change, according to Al Jaber.
“ADNOC is already one of the least carbon intensive producers in the world but our aspirations are greater,” he said, adding that over the next decade, ADNOC would reduce its greenhouse gas intensity by a further 25 per cent.
“We are expanding our carbon capture programme 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.”
The ADNOC strategy, Al Jaber said, is based on the knowledge that post-COVID, the world will demand the lowest carbon oil and gas possible: “That is a market. That is an opportunity.”