Energy security and green transition not mutually exclusive, Dubai forum hears

Energy security and green transition not mutually exclusive, Dubai forum hears
The panel discussed ways in which countries can shift their energy priorities to meet these challenges. (Atlantic Council)
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Updated 31 March 2022

Energy security and green transition not mutually exclusive, Dubai forum hears

Energy security and green transition not mutually exclusive, Dubai forum hears
  • Panelists say path to decarbonization must be realistic, efficient, and complemented by affordable technologies
  • Experts caution that starving oil and gas of investment may actually hinder long-term transition to renewables

DUBAI: Energy security and the green transition must go hand in hand if the world is to address the climate crisis, experts participating in a panel discussion at the World Government Summit in Dubai said on Monday.

As Western governments respond to Russia’s invasion of Ukraine by imposing a raft of stringent sanctions on Moscow’s financial infrastructure and vast hydrocarbon economy, European nations have been left casting around for alternative sources of energy.

At the same time, governments urgently need short-term solutions to meet domestic energy demands until renewables like wind and solar can be scaled up. The result is a dual-crisis of energy security and creeping climate catastrophe.

During a summit session titled “Meeting the 2022 challenge: Will energy security derail the energy transition?” organized as part of the Atlantic Council Global Energy Forum, the panel discussed ways in which countries can shift their energy priorities to meet these challenges.

Claudio Descalzi, CEO of Emirates National Investment, who was on Monday’s panel, said African energy producers could offer European nations the energy security solutions they need as the continent weans itself off Russian oil and gas.

“We don’t have our own energy so we never thought about a strategy on energy security,” said Descalzi. “When you don’t have something like that to think about, (how) can you cope with the future? Africa is a good opportunity because they need development, we need gas, and that is a good combination.”

Indeed, buying from a region of the world in dire need of investment to assist its development has an obvious social value, but arguably does little to further the transition away from fossil fuels.

For his part, Majid Jafar, CEO of Crescent Petroleum, contended that energy security and energy transition do not need to be as mutually exclusive as they are so often depicted.

In fact, there can be no energy transition without energy security and affordability, he told the panel. In that context, the focus has been too much on starving supply and investment in oil and gas in an attempt to solve the climate crisis, while demand keeps soaring.

“It’s as ridiculous as trying to solve obesity by starving funding to sugar and wheat farmers, and not making any changes in diets or policies on how food is consumed,” said Jafar. “Climate change is fundamentally a consumption issue.”

Starving the developing world’s oil and gas industry of investment may actually be hindering the long-term transition to renewables, said Jafar, and “platitudes and prescriptions” from Western governments doled out to Africa and Asia do little to address their actual needs.

Indeed, almost 1 billion people worldwide still do not have access to electricity — a figure made worse over the course of the COVID-19 pandemic. Meanwhile, some 3 billion people do not have access to clean cooking solutions, forcing them to rely on dangerous and polluting sources of heat.

As an indication of the inequality around responsibility for carbon emission, around 80 percent of the global population is yet to board a plane.

“It’s like saying: ‘You don’t need stable grid power like we have, and you can make do with a solar panel on a battery,’” said Jafar.

In search of cheaper energy solutions, many developing countries have been forced to reach for even more damaging fuel sources.

“What has happened is there has been more burning of coal, so you have more emissions and higher energy prices,” said Jafar. “So this issue of underinvestment has been key and it cannot just be that we need more oil and gas in the short-term.”

The oil and gas industry is a long-term business, which requires hundreds of billions of dollars of investment in order to make production cleaner, said Jafar. He also believes these hydrocarbon products will be used differently in future.

“Gas is a fundamental enabler of renewables because it backs it up and it’s the path to future technologies like hydrogen, and oil is used for solar panels and wind turbines,” he said.

“That message of the ongoing need for oil and gas hasn’t been understood, especially in Western markets.”

Indeed, hydrogen is being widely touted as the missing link in the green energy transition. Speaking on Monday’s panel, Anna Shpitsberg, deputy assistant secretary for energy transformation at the US State Department, described hydrogen as a game-changing technology that speaks to a variety of different sources thanks to its ability to underpin nuclear, gas and renewables.

“That’s why we are putting billions of dollars into hydrogen research and development,” she said.

“It cannot always be about putting new infrastructure. We often talk about energy access and how countries sometimes need to build infrastructure, but they also have underutilized infrastructure, and we don’t want them to have debt when they are not even using what they have.”

The path to decarbonization needs to be realistic, efficient, and complemented by the development of new technologies to help bring down the cost of renewables, she added.

In the meantime, the world’s biggest oil and gas producers are committed to maintaining energy market stability. Saudi Arabia, the UAE, and Kuwait have all set aside spare capacity worth an estimated $500 billion, according to Fahad Al-Ajlan, president of the King Abdullah Petroleum Studies and Research Center in Saudi Arabia.

“They had the long-term vision of saying that if there is a disruption in demand or a hiccup in the global oil supply, then there is a way of compensating for that,” Al-Ajlan told the panel. “But if we can talk about energy security, it’s not new.”

Al-Ajlan highlighted the recent missile and drone attacks on Saudi Arabia and the UAE’s hydrocarbon infrastructure by Yemen’s Houthis and the need to pay special attention to energy security. All the while, cutting carbon emissions must remain a top priority.

“We are not achieving our climate goals tomorrow or in the next two years, yet our policy looks like it is,” he said. “We should be very focused on emissions and how to reduce them.”


OPEC+ begins policy debate as capacity constraints loom

OPEC+ begins policy debate as capacity constraints loom
Updated 12 sec ago

OPEC+ begins policy debate as capacity constraints loom

OPEC+ begins policy debate as capacity constraints loom

LONDON: The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, begin a series of two-day meetings on Wednesday with sources saying chances of a big policy change look unlikely this month, according to Reuters.

At its last meeting in early June OPEC+ decided to speed up production cuts and to raise output each month by 648,000 barrels per day in July and August, up from earlier increases of 432,000 bpd.

OPEC+ consists of OPEC and allies such as Russia.

Washington welcomed OPEC’s decision, which came after months of pressure from the West on OPEC+ to raise production to help cool off oil prices, which soared as a result of sanctions on Russia for the invasion of Ukraine.

However, prices kept rising due to tight supply and worries that OPEC is coming close to running out of spare capacity to raise output any further.

French President Emmanuel Macron told US President Joe Biden this week that he has been told that Saudi Arabia and the United Arab Emirates can barely increase oil production.

Biden will travel to the Middle East including Saudi Arabia next month and is widely expected to further press Riyadh to raise production.

At least five OPEC+ delegates said the meeting this week will focus on confirming August output policies while not discussing September.

Two other delegates said the issue of production post August could emerge but it was not clear what steps could be taken.


Luxury hotel brand JW Marriott makes Saudi debut with Riyad Capital   

Luxury hotel brand JW Marriott makes Saudi debut with Riyad Capital   
Updated 12 min 15 sec ago

Luxury hotel brand JW Marriott makes Saudi debut with Riyad Capital   

Luxury hotel brand JW Marriott makes Saudi debut with Riyad Capital   

RIYADH: International hotel brand JW Marriott will debut in Saudi Arabia with the rebranding of Burj Rafal hotel in Riyadh, the project owner Riyad Capital said. 

In a bourse filing, the Saudi fund manager revealed that the hotel's development has achieved the first phase to deliver a luxury corporate destination in King Abdullah Financial District’s new business center.

The first phase of the improvement plan includes enhancements to arrival experiences, as well as new food and beverage outlets, it added.

Riyad Capital said the remaining phases of the project will be implemented according to the strategy set forth earlier.


TASI begins in red as investor awaits oil price stability: Opening bell

TASI begins in red as investor awaits oil price stability: Opening bell
Updated 16 min 16 sec ago

TASI begins in red as investor awaits oil price stability: Opening bell

TASI begins in red as investor awaits oil price stability: Opening bell

RIYADH: Saudi stocks opened Wednesday's session in red as investors awaited possible stabilization of oil prices.

The main index, TASI, fell 0.19 percent to 11,648, while the parallel market, Nomu, added 1.02 percent to 20,565 as of 10:09 a.m. Saudi time.

Abdullah Saad Mohammed Abo Moati for Bookstores Co. led the gainers with 3.93 percent gain, after it posted SR15 million ($4 million) in profit for its fiscal year ending March 31, 2022, an increase of 183.3 percent.

Leading the fallers was Tihama Advertising and Public Relations Co., down 2.67 percent.

Saudi Aramco, the largest player on the Saudi oil market, started today’s trading down 0.77 percent.

In the financial sector, the Kingdom’s largest valued bank Al Rajhi dropped 0.59 percent, while Bank Aljazira fell 0.09 percent.

Al Moammar Information Systems Co. edged down 0.50 percent, following an agreement with US-based Cloudera to host and distribute its services in the Kingdom.

SABIC Agri-Nutrients Co. gained 0.84 percent, following the announcement that it will pay dividends of SR4 a share in the first half of the year.

Saudia Dairy and Foodstuff Co. fell 0.47 percent, following shareholders approval of SR0.50 per share for dividends in 2021.

Dar Alarkan Real Estate Development Co. decreased 1.25 percent, following the appointment of Yousuf Al Shelash as chairman and Majed Abdul Rahman Al Qasim as vice chairman.

Retal Urban Development Co. lost 1.81 percent, following the acquisition of SR339 million in residential land in the Sedra Masterplan Community.

In energy trading, Brent crude settled at $117.10 a barrel and US West Texas Intermediate reached $111.20 a barrel, as of 10:06 a.m. Saudi time.

 


Here’s what you need to know before Tadawul trading on Wednesday

Here’s what you need to know before Tadawul trading on Wednesday
Updated 9 min 59 sec ago

Here’s what you need to know before Tadawul trading on Wednesday

Here’s what you need to know before Tadawul trading on Wednesday

RIYADH: Saudi stocks regained some momentum on Tuesday, mirroring a rise in oil prices after China eased lockdown restrictions.

TASI surged 2.1 percent to 11,671, buoyed by a 3.3 percent rise in oil giant Aramco and a 3.4 percent leap in the Kingdom’s biggest lender Saudi National Bank.

The parallel market, known as NOMU, also recorded a 0.6 percent gain to end the day at 20,358 points.

With Saudi Arabia leading the gainers in the Gulf, stock exchanges of Abu Dhabi, Dubai, and Qatar added 1.9, 1.1, and 1.1 percent, respectively.

This was followed by marginal gains amounting up to 0.3 percent in the Omani and Kuwaiti indexes, while Bahrain’s BAX bucked the trend to close 0.3 percent lower.

Elsewhere in the Middle East, Egypt’s benchmark index EGX30 extended losses as it slipped 0.8 percent.

In energy trading, Brent crude reached $117.44 a barrel by 9:09 a.m. Saudi time on Wednesday, while US West Texas Intermediate traded at $111.44 a barrel.

Stock news

  • The Saudi Investment Bank, known as SAIB, completed the issuance of SR2 billion ($533 million) worth of Riyal-denominated Sukuk
  • Saudi Telecom Co., better known as stc, received its board’s approval to repurchase up to 15 million shares at SR453 million for an employee incentive plan
  • Derayah REIT fund received the board of directors’ approval to restructure its financing, which stood at SR748 million by 2021 end
  • Ayyan Investment Co. almost completed construction works at Al Salam Hospital and expects to obtain the required licenses to begin trial operations by the third quarter of 2022
  • Hail Cement Co.’s shareholders approved buying back 4.9 million shares and keeping them as treasury shares
  • Saudia Dairy and Foodstuff Co.'s shareholders approved a dividend distribution of SR3 per share for the second half of its financial year ended March 31, 2022
  • Naseej for Communication and Information Technology Co. was awarded a deal valued at SR14.5 million to implement a project in the field of e-education and training
  • Shareholders of the Red Sea International Co. will vote on a capital reduction of 50 percent to SR302 million in the next general assembly meeting
  • Saudi Advanced Industries Co. appointed Youssef Al-Qafari as board chairman instead of Abdullah Al-Juraish, who retains his membership in the board of directors
  • Abdullah Saad Mohammed Abo Moati for Bookstores Co. posted a 183 percent profit surge to SR15.1 million for its fiscal year ending March 31, 2022
  • Dar Al Arkan Real Estate Development Co. named Yousuf Al Shelash chairman of the board and Majed Abdul Rahman Al Qasim vice-chairman
  • Retal Urban Development Co. bought SR339 million worth of residential lands within the Sedra Masterplan Community
  • Shareholders of Saudi Arabia Refineries Co. approved a dividend payout of SR0.5 per share for 2021
  •  SABIC Agri-Nutrients Co. will distribute SR4 per share in dividends for the first half of the current year

Calendar

  • June 30, 2022

End of the Wafrah for Industry and Development Co.’s subscription to new shares

End of Petro Rabigh’s subscription to new shares

  • July 4, 2022

Launch of single-stock futures trading on Tadawul

  • July 7, 2022

Saudi Exchange will close for Eid Al Adha holidays and resume trading on July 13


Saudi IT firm MIS to offer US big data giant Cloudera’s services in Kingdom 

Saudi IT firm MIS to offer US big data giant Cloudera’s services in Kingdom 
Updated 52 min 4 sec ago

Saudi IT firm MIS to offer US big data giant Cloudera’s services in Kingdom 

Saudi IT firm MIS to offer US big data giant Cloudera’s services in Kingdom 

RIYADH: Al Moammar Information Systems Co. has entered into an initial agreement with US-based big data giant Cloudera Inc. to host and distribute its services in Saudi Arabia.

The Saudi-based IT firm is seeking to launch a platform to host Cloudera’s solutions on its cloud and resell it in the Kingdom as the first of its kind in the Middle East, it said in a bourse filing.

Cloudera will be providing support to MIS’ clients through the new platform in addition to managing and securing data across clouds in Saudi Arabia.

According to the filing, the two parties are looking to launch the platform within the next six months.