Leading the world to its final energy destination entails transformational improvements, primarily in the energy industry. The successful introduction of alternative energy sources at scale depend on the response of various stakeholders to the prevailing market environment and to the manifold challenges facing the energy industry today.
Saudi Aramco enjoys the enviable reputation of being one of the world’s leading integrated energy and chemical company. Millions of people, businesses and industries around the globe rely on the products and services it offers – including crude oil, natural gas, refined products, and chemicals – to succeed in their operations and achieve their production goals. Saudi Aramco recognizes its essential role in providing energy to the world, and this drives its men and women to ensure that its products and services reach the stakeholders that depend on them.
Saudi Aramco’s operations and aspirations are guided by the immense belief that ‘energy is opportunity’ – that its products and services form the cornerstone of global economic growth and prosperity. This same principle is now inspiring the company’s long-term and flexible approach, as it navigates through a market of shifting preferences and challenging industry conditions. This same conviction is now lighting the way ahead of the company, as it finds itself at a crossroads, confronted with crucial choices that have the potential to shape the entire world’s energy future.
A New Energy Era
The global oil and gas industry has been shaken by the drastic fall in oil prices, which resulted in collapsed earnings, job losses, operational shutdowns and project cancellations. The good news is that the market has started to recover, and that the industry is gradually entering its next growth cycle.
This fact bodes well for the global energy security, as oil & gas remains to be the world’s foremost source of energy, even as the world progressively moves towards alternatives.
The world’s primary energy demand today is approximately 280 million barrels per day of oil equivalent. An estimated 80% of it is supplied by fossil fuels, and around a third is met by oil. By 2040 the primary global energy demand will rise to 360 million, some 75% of it will still be satisfied by fossil fuels.
Although the share of fossil fuels in the global energy mix diminishes by 2040, their demand in absolute terms still grows, rising from 230 million barrels per day of oil equivalent to 270 million. For oil specifically, it is expected to increase from over 96 million barrels per day to an estimated 104 million.
Even as the role of oil & gas in the global energy mix remains significant for decades to come, however, the industry cannot afford to be complacent and stay stagnant in the face of imminent change.
In his opening keynote speech on Day 2 of the 2016 World Energy Congress in Istanbul, Amin Nasser, President and CEO of Saudi Aramco, calls on the energy and oil & gas players to take up the cause of developing and embracing innovative ways of doing business as the industry crosses over the next phase.
“Low oil prices do not change the fact that the current oil and gas resources, as well as new discoveries, are more challenging and more expensive to develop. Equally, today’s oil and gas fields are becoming increasingly mature and complex to operate. And although alternatives and renewables face hurdles, their role will steadily grow, as the world moves towards a new energy era driven by the Paris Agreement on climate change.”
“Navigating the transition period will require a new road map, a real and holistic Energy 2.0, if you will.”
Sustained investment in the supply of oil & gas
Nasser says that one of the integral components of the new age of energy is the timely and adequate investment towards a secure supply of oil & gas.
Saudi Aramco exemplifies this in its continued, albeit prudent, investment in its core oil & gas projects, and in the downstream and chemicals, amidst challenging times. “We continue to maintain our spare production capacity to help respond to unforeseen events, and help minimize their potential impact on the global economy,” says Nasser. “By doing so, we at Saudi Aramco are playing our part in enhancing the energy security of our global consumers.”
“Our investments,” adds Nasser, “continue to be driven by our long-term focus.” He further reveals that Saudi Aramco plans to invest more than USD 300 billion over the coming decade to reinforce its pre-eminent position in oil, maintain its spare production capacity, and pursue a large exploration and production program focusing on conventional and non-conventional gas resources.
In addition, Saudi Aramco continuously grows its refining capacity to more than five million barrels per day currently, and to 8-10 million barrels by 2030. It also plans to ramp up its share of chemical production capacity across its global operations, from 12 million metric tons per year to over 34 million over the same period.
Saudi Aramco’s sustained investment in its operations tie in well with its citizenship initiatives, which aim to create opportunities that help people add value to their communities, their families and their own lives. In ensuring the constant development of its oil & gas resources and the reliable and timely delivery of its products, Saudi Aramco encourages companies in Saudi Arabia and elsewhere to invest in projects that grow their business and, hence, create career opportunities for citizens. By building additional integrated refining and chemical facilities and conversion parks, the company contributes to the diversification of the various economies and to the creation of additional business prospects for allied suppliers.
Sufficient investment in research, innovation and technology
The passage to the new era will prompt energy and oil & gas companies to make smarter choices on how they produce, utilize and capitalize on vital energy resources. Research and investment in new technologies can help in delivering greater levels of operational efficiency, enhanced performance and environmental benefits. Thus, in recognition of this, Saudi Aramco operates on the leading edge of science and creativity, bringing to life ideas and concepts that make energy more beneficial and sustainable.
“At Saudi Aramco,” says Nasser, “our goal is to become the world leader in cutting-edge energy, chemical and clean fuel technologies that boost efficiency, reduce cost and minimize emissions.” In order to achieve this, the company leverages its talent pool and expertise, forge strategic alliances, and invest venture capital in solving some of the world’s most difficult, but exciting, energy challenges.
In line with the company’s global goals are its efforts at home. Saudi Aramco champions educational programs and initiatives, especially in Science, Technology, Engineering and Maths (STEM), as it believes that they foster creativity and innovation among Saudi’s youth. It is also opening doors to local breakthrough technologies by enhancing the Kingdom’s research and development capabilities, and promoting the localization of Saudi Arabia’s energy services sector. It continues to provide financial support to trailblazing energy start-ups, which fosters a local culture of innovation and technological entrepreneurship.
Among Saudi Aramco’s focus areas are providing reliable access to more affordable energy, reducing carbon dioxide emissions, realizing more fuel-efficient vehicles, creating next-generation materials that make lighter and stronger consumer products, and conserving water resources.
“Technological advances will help us raise the aggregate recovery factor of our major producing reservoirs to 70%, and increase our oil resources by 100 billion barrels to reach 900 billion,” says Nasser, and adds that the company is focused on solutions across the entire spectrum of carbon issues. “Our work ranges from collaborative research with automotive manufacturers on integrated fuel systems of the future and carbon capture and storage, to our pioneering work on turning CO2 to sustainable polymers and chemicals.”
In addition, Saudi Aramco is spearheading its crude-to-chemicals initiative, which aims to eliminate the entire refining step of the process.
“We believe,” says Nasser, “that when it comes to shaping the future energy landscape in a greenhouse gas-constrained world, our approach must be industry-led, technology-driven and commercially viable.”
Paving the Way for Alternative Energy
The world’s transition to alternative sources of energy is inevitable. But until the contours and substance of the alternative energy future are assured, says Nasser, retaining the insurance of proven energy sources is the smart play.
He advocates continuous technology investments to overcome technical and economic hurdles facing alternatives, which will lead to groundbreaking enhancements. Moreover, he espouses a prudent deployment of alternative energy technologies to allow them to gradually but steadily assume a greater share of the global energy burden, without causing disruption and economic hardship.
Amidst the fleeting and challenging environment, Saudi Aramco strives to remain committed to its avowed responsibility of bringing energy to world and true to its core belief that energy enables opportunities. Playing an essential role in leading the world to its final energy destination, Saudi Aramco continues to pursue new frontiers that it must ultimately embrace. Catalyzing the transformation that the energy industry needs in the face of the looming transition, Saudi Aramco continues to redefine the way it operates to deliver the secure, equitable, and sustainable energy future the world needs.
Amin Nasser: President and Chief Executive Officer of Saudi Aramco
Amin Nasser is the President and Chief Executive Officer, and a member of the Board of Directors of the Saudi Arabian Oil Company (Saudi Aramco), the world’s leading integrated energy and chemical company, and the largest provider of crude oil to global markets.
In his more than three decades of industry experience, Nasser has performed several key functions at Saudi Aramco, including being the company’s Senior Vice President for Upstream, where he took the helm of the company’s largest capital investment program in its integrated oil and gas portfolio.
As the company’s Chief Executive Officer, Nasser is leading Saudi Aramco to its planned public listing in 2018, and is spearheading the company’s efforts to produce cleaner energy and products through vital investments in entrepreneurial start-ups, renewable energy sources, oil-to-chemicals processes, and carbon capture utilization and storage technologies. He is also playing an essential role in the company’s In-Kingdom Total Value Add Initiative (IKTVA), which aims to increase the level of locally produced materials and services the company procures to 70% by 2021.
Nasser is committed to the advancement of people through education and training, and to the progress of Saudi Aramco’s innovation and technology strategy. He is a champion of Saudi youth advancement and development, and a staunch supporter of the company’s Young Leader’s Advisory Board, which has been implemented to connect Saudi Aramco’s leadership with its young professionals.
Nasser is a member of the International Advisory Board of the King Fahd University of Petroleum and Minerals, of the Board of Directors of the Dhahran Techno Valley Company, and of the Board of Trustees of the King Abdullah University of Science and Technology. He is also part of the World Economic Forum’s International Business Council, of the MIT Presidential CEO Advisory Board, and of the JP Morgan International Council.
He is a long-time member of the Society of Petroleum Engineers, where he has served in the Industry Advisory Council since 2008. In 2015, he received the Society’s Charles F. Rand Memorial Gold Medal as a recognition of his distinguished achievement in mining administration, including metallurgy and petroleum.
He holds a Bachelor’s Degree in Petroleum Engineering from the King Fahd University of Petroleum and Minerals in Dhahran. He completed the Saudi Aramco Management Development Seminar in Washington, D.C., in 1999; the Saudi Aramco Global Business Program in 2000; and the Senior Executive Program at Columbia University in 2002.