Switzerland: Mr. Amin Nasser, CEO of Saudi Arabian oil firm Aramco has warned about a lack of investment in the hydrocarbon sector, saying that taxing oil companies and paying energy bills is not a long-term solution to the global energy crisis.
Even if the conflict in Ukraine ends today, the energy crisis will not end. The real cause of energy insecurity is low investment in oil and gas
Mr. Nasser told a forum in Switzerland
The Aramco CEO however, noted that capping energy bills might help consumers in the short term.
According to Mr. Nasser, global oil demand is still healthy today, despite strong economic headwinds. “As the global economy recovers, we can expect demand to rise again, eliminating the small oil production capacity there,” Mr. Nasser added.
Governments across Europe have put in hundreds of billions of euros into tax cuts, transfers and subsidies to combat an energy crisis that has fueled inflation, forced industries to halt production and raise bills ahead of winter.
Aramco is investing to increase the country’s oil capacity to 13 million barrels per day (bpd) by 2027, but global investment in hydrocarbons is still “too little, too late, too short-term,” Mr. Nasser warned. The underinvestment comes at a time when spare capacity is thin and demand is “quite healthy” despite a strong economic crisis.
“When the global economy recovers, we can expect demand to rebound further, eliminating the little spare oil production capacity out there. Aramco is seeking to reduce its upstream carbon intensity, gas flaring and methane intensity, while ramping up efforts to develop carbon capture technologies. The best help that policy makers and every stakeholder can offer is to unite the world around a much more credible new transition plan.” Mr. Nasser said.