Global leaders at Adipec urged greater collaboration between oil and gas producing nations and consumer countries to ensure business resilience in a post-Covid world and during the transition to lower carbon energy

Over 80,000 viewers from around the world tuned into Adipec’s strategic and technical sessions, with almost 40,000 viewers streaming the opening ceremony.

Adipec 2020 Virtual – the online version of the world’s largest annual oil and gas exhibition and associated conferences, ran over four days from November 9 under the patronage of UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan, and was hosted by Abu Dhabi National Oil Company (Adnoc).

Global leaders used the Adipec platform to urge greater collaboration between oil and gas producing nations and consumer-led countries to ensure business resilience in a post-Covid world and during the transition to lower carbon energy. Speakers included Suhail Mohamed Al Mazrouei, UAE Minister of Energy and Infrastructure, Prince Abdulaziz bin Salman Al-Saud, KSA Minister of Energy, Dr Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology and Adnoc Group CEO, Pavel Sorokin, Russian Deputy Minister Energy, and Mohammad Barkindo, Secretary General, Organisation of the Petroleum Exporting Countries (Opec) among others.

At the event, Adnoc made a series of strategic announcements that highlighted its drive to capture greater value across its portfolio and build long-term resilience as it pursues smart growth.

He signaled Adnoc’s keenness to accelerate the progress of the transformation it started four years ago, centered on driving down costs and unlocking value. One way the company is going about this is by leveraging state-of-the-art technologies and this was demonstrated by Adnoc’s tech-driven achievements and milestones at Adipec.

Adnoc said it had unlocked $2 billion in cost savings over the past five years by leveraging advanced technologies, digitisation and integrated drilling services (IDS) to enhance drilling operations.

Adnoc also revealed the completion of Phase 1 of its large-scale multi-year predictive maintenance project to maximise asset efficiency and integrity across its upstream and downstream operations. The predictive maintenance project is utilising artificial intelligence (AI) technologies such as machine learning and digital twins to deliver maintenance savings of up to 20 per cent.

Adnoc’s focus on harnessing technology to unlock solutions was also on display on the eve of Adipec when AIQ – Adnoc’s joint venture (JV) with Group 42 (G42) – signed a strategic framework to collaborate on the development of AI, machine learning and data solutions for the oil and gas industry.

As Adnoc looks to further unlock value through technology, it is driving growth by expanding its downstream business. At Adipec, Adnoc and ADQ unveiled Ta’ziz, their joint-venture established to drive the development of industrial projects within the planned Ruwais Derivatives Park and act as a catalyst for the UAE’s economic diversification and technology-led growth. Adnoc’s downstream expansion provides a great opportunity for partners to invest alongside Adnoc as it strengthens the UAE’s industrial base and increases in-country value.

In its upstream business, Adnoc announced a significant milestone in its objective of enabling gas self-sufficiency for the UAE with the first delivery of unconventional gas from the country, following Adnoc and Total’s achievement in unlocking gas from the Ruwais Diyab concession located 200 km west of Abu Dhabi city.

Earlier addressing the Adipec opening ceremony, Al Jaber said the world will keep needing oil and gas even after the pandemic is over and in fact demand will grow, with oil and gas continuing to supply over half of the world’s energy needs for decades to come.

He expected oil demand to grow to 105 mbpd by 2030 and continue to supply over half of the world’s energy needs for decades to come.

At the same time, he said, the petrochemical sector will continue to grow at a healthy pace through and beyond 2050 in line with a steadily expanding global middle class.

He said there are also opportunities to maximise value. "In the case of Adnoc, we have been able to use the UAE and Abu Dhabi’s status as a trusted, business-friendly environment to complete several landmark transactions. We inked a $20-billion pipeline deal and unlocked $5.5 billion in value from our real estate. These deals were struck in the most difficult year for the global economy in recent memory. And they prove the enduring and the underlying value of our industry."

Hoping for brighter days ahead for the industry, Al Jaber said there is even more value to be captured. "At Adnoc, we are discovering this truth as we move into active trading. In September, we completed our first derivatives trade. Next month we will begin trading the full portfolio of our refined products. And in the first quarter of next year, we will see the launch of Ice Futures Abu Dhabi (Ifad)."

Ifad will be the first exchange to include futures contracts based on Abu Dhabi’s popular Murban grade, and will offer great value for producers and customers alike

He said: "Adnoc is one of the least carbon intensive producers in the world, but our aspirations are greater. In the next 10 years, Adnoc will reduce its greenhouse gas intensity by a further 25 per cent. We are expanding our carbon capture programme so that it annually stores 5 million tons of CO2. More importantly, we will explore the potential of new fuels such as hydrogen."

GLOBAL LEADERS SPEAK

Dr Fatih Birol, Executive Director of the International Energy Agency (IEA), outlined the challenges faced by the industry and charted the evolving global energy map.

"In terms of global energy demand, we expect to see a decline this year of about 5 per cent. To put this into context, this year’s decline is 7 times larger than the decline following the 2008/9 financial crisis," Birol told a session dedicated to the geopolitics of the oil and gas industry,"

However, he said the IEA has identified increasing investment in clean energy technologies, which is on track to reach $40 billion this year and is changing the face of geopolitics in the energy sector. "The one that is critical for me is carbon capture, utilisation and storage, which provides a very good bridge between energy realities and climate imperatives."

Bahrain’s Minister of Oil Shaikh Mohamed bin Khalifa Al Khalifa said: "This year really saw the international oil and gas industry come together and try to curtail production to meet the decline in demand from Covid-19 and I think they’ve done an excellent job."

Separately, the UK Minister for Exports, Graham Stuart, stressing the world’s transition to clean power needs to speed up by four times its current rate, adding the UK will encourage our global partners to embrace and adopt new technologies in five critical areas that will be pivotal in the quest for clean growth - clean energy, green transport, nature-based technological solutions, climate adaptation and resilience, and green finance.

Stuart added that "with more than $15 trillion-worth of investment expected to be made in new power capacity globally by 2050, around $11 trillion of which will go into renewables, we are working to position the UK as the partner of choice for low carbon and renewable energy businesses worldwide".

Citing Masdar's investment of more than £3 billion pounds in UK offshore wind, Stuart said Innovative British green technology businesses are perfectly placed to work with Adnoc and other partners in the GCC and across the Middle East to fulfil their clean energy ambitions.

Stuart said the UK is "spending unprecedented sums in greening the British economy," pointing to a £2.5 billion investment in clean growth innovation by 2021 and a record increase in public R&D investment with a commitment to reaching £22 billion per year by 2025.

Ministers from Japan, India and Thailand were unanimous in their belief collaboration is the way forward in overcoming the energy sector’s challenges and to drive energy strategy transitions to facilitate carbon emission reductions.

Japan’s Minister of Economy, Trade and Industry, stressed his country would focus on decarbonisation to become carbon neutral by 2050. He said Japan would also lead concrete measures to achieve a hydrogen society, including the establishment of international supply chains that include oil-producing countries and a new focus on fuel ammonia.

Meanwhile, India’s Minister of Petroleum, Natural Gas & Steel, Sri Dharmendra Prabhan, said his country would be the key driver of global energy demand for decades to come, pointing out that the nation’s energy demand has already reverted to pre-Covid levels. He predicted India would account for 12 per cent of global energy demand by 2050.