The oil and gas industry is committed to offering low-carbon energy solutions

The oil and gas industry has the discipline, technology, and capital necessary to provide solutions to energy challenges, and it is committed to driving change, affirmed top industry leaders during a panel discussion on the first day of ADIPEC.

“We are in the midst of a massive transformation, especially in this part of the world. The leadership of the countries of the GCC is strongly committed to ensuring that decarbonisation happens at a very fast pace in our countries,” said Khalid M. Nouh, CEO of TAQA (Industrialisation & Energy Services Company).

“I think the industry has what it takes to provide the discipline and the solutions needed for our energy needs. The solutions do lie within the industry,” said Matthew Harwood, Chief Strategy Officer at Climate Investment.

The oil and gas industry has been central to discussions around a decarbonised future. Major O&G firms in the region have committed to net zero targets and investments of about $10 billion in carbon capture and storage during COP27 in Egypt last year. “I truly believe that the industry today is very well committed, and our leadership that leads this change is very serious about this issue,” Nouh stated during the panel discussion on ‘Driving down value chain emissions in the energy sector’.

According to the International Energy Agency, global investment in clean energy is on track to rise to $1.7 trillion in 2023, with solar set to eclipse oil production for the first time. However, investments alone will not be enough to pave the way toward a greener future. The global oil and gas industry needs standardized regulations and incentives to turn climate change ambition into action.

“We need both regulations and incentives. If regulations are introduced without incentives, it could create geographical disparities. Europe is trying to take a lead on this conversation with regulations. And while it does so, regulators need to ensure they do not disincentivise investments coming into the continent. Therefore, incentives and regulations should go hand in hand,” said Christina Verchere, CEO of OMV Petrom.

Talking about value chain emissions and how the industry can become more effective at addressing carbon emissions, Dr Katharina Beumelburg, Chief Strategy and Sustainability Officer at SLB, called for standard reporting practices and regulations. “Oil and gas companies work with thousands of suppliers to create transparency in their supply chains. This is an enormous effort and requires a lot of transparency. But this is what the industry needs. If we want to gain the integrity to be a real partner in the solution, and if we want to earn a seat at the table, we have to work with upstream and downstream suppliers on one hand, and reduce emissions for our customers on the other hand.”

According to Nouh, companies might find it quite difficult to quantify emissions, particularly Scope Three, right now. “At our end, we have started incentivising our partners to share information. We are putting systems in place so that vital information is captured by all partners in a standard format. If we can measure it, we can manage it,” he said.

Some of the challenges for the industry include scaling technology and speed. Experts on the panel largely agreed that the oil and gas industry has the potential to lead the change and offer solutions for a decarbonised world.

The Middle East accounts for almost a third of global oil production. Successive COP events in the Middle East have helped raise awareness and urgency on an accelerated path to climate action. “MENA governments that are part of COP28 will be meeting in Riyadh next week to discuss the promises made to the United Nations and how they're progressing so that they create a consensus document ready for the event. The COP28 meeting in the UAE this year provides an opportunity to accelerate business change in the region,” said Russell Hardy, CEO of Vitol.