Role of oil in low carbon energy transition explored

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Global oil demand likely to increase by more than 20mbd between now and 2050

JEDDAH — More than 30 energy experts gathered in the King Abdullah Petroleum Studies and Research Center (KAPSARC) to discuss how oil producers can thrive through a low carbon energy transition last Monday.

The objective of the workshop was to develop effective strategies for mitigating the economic impacts on fossil fuel suppliers of decarbonization policies aimed at avoiding future climate change, KAPSARC’s VP of Research David Hobbs said.

He mentioned that the workshop will help decision makers to learn from previous global energy transitions and develop approaches to face the challenges they raise.

Speaking in the workshop, Dr Ibrahim Muhanna, Vice Chair of World Energy Council, said global oil demand is likely to increase by more than 20 MBD between now and 2050, to approximately 120mbd. Demand growth will slow after 2030 and plateau after 2040.

He described the future of oil and identified three factors that could impact the direction of petroleum markets. These are the risk of a major global economic crisis, lack of cooperation and coordination among major oil producing nations, and prices that distort investments by being too high or too low.

With the launch of Vision 2030 and the National Transformation Program (NTP) 2020, Saudi Arabia has tried to reduce the reliance on oil as a source of government income and expand its other sectors, such as tourism, services, advanced technology, and both heavy and light industries.

Participants included officials from the Saudi Ministry of Energy, Industry and Mineral Resources (MEIM), OPEC, Mubadala Energy, International Energy Forum (IEF), Arab Petroleum Investments Corporation (Apicorp), Columbia University, and McKinsey & Co.

KAPSARC is dedicated to research into energy economics, policy, technology and the environment, across all types of energy. The Center is focused on finding solutions for the most effective and productive use of energy, creating added value that contributes to the welfare of both energy exporting and consuming societies. — SG


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