The United Arab Emirates is working with OPEC+ to ensure the stability of the global energy market, while pursuing an energy strategy based on the pillars of supply security, affordability and sustainability to produce the lowest carbon barrel in the world, UAE Energy Minister Suhail Al Mazrouei said on Monday.
The UAE is doing the best it can to help with the current energy situation and has invested to raise its oil production capacity by 5 million barrels, Al Mazrouei said at an event in Dubai. At the same time, the country was firmly in tandem with the global oil grouping to bring stability to a turbulent oil market, the minister said. “We will work with OPEC+ to ensure that the market is stable,” he said.
Energy markets have been volatile for the past month due to Russia’s invasion of Ukraine and China’s lockdown due to COVID-19. Oil prices were on calmer territories at the start of the week on Monday, but benchmark Brent crude surged more than 11 percent last week on concerns that sanctions on Russia over the Ukraine crisis would impact its exports.
Terming the current geopolitical situation as very tense, Al Mazrouei said the ongoing situation is not impacting the oil and gas sector but every aspect of people’s lives: from food security to the rare minerals needed for the energy transition, said the minister.
“We are at a situation [in the energy industry] which we probably never thought we would be at a few years ago,” Al Mazrouei said. “Year after year we have been saying that we need more investments in oil and gas, we need more resources and more diversity. Whether it’s geopolitics or using net-zero as an excuse, additional investments in the oil and gas industry have been ignored. As a result, we are in an environment where everyone is today saying raise your production and bring more resources, but if you go to financial institutions, they are hesitant to finance many important oil & gas projects,” Al Mazrouei said.
According to Al Mazrouei, the underlying message to the oil and gas industry was that they needed to increase production for only a few years, and after that it will be closed down, “as if oil production is a tap that can just be opened and shut.”
Noting that OPEC+ has already lost more than a million barrels of oil production capacity, Al Mazrouei said: “We cannot say that we are going to abandon certain types of energy production. This is not the right time. If that happens, it will make energy resources unaffordable to many countries and halt their progress and create hurdles for basic necessities such as bringing food to the table. We need to make energy more affordable, but we cannot do it while we are being asked to just invest and increase production for a temporary period.”
The UAE is working to expand its production capacity from 4 million bpd today to 5 million bpd before 2030, while making major investments in renewable and clean energy.
Despite pursuing an elevated production, Al Mazrouei said the UAE was committed to not producing hydrocarbons in the old way. “We are aiming to produce the lowest carbon barrel in the world, and we are continuously investing to do so. From bringing electricity to the oil fields from renewable or clean sources such as nuclear power, to participating in every opportunity to reduce emissions and GHG, to promoting renewable energy in more than 40 countries, we are securing clean energy investments across many sectors.”
At the same time, he said, the UAE’s focus on hydrogen currently involves around blue because it is available and affordable. “We cannot just bring the most expensive form of hydrogen and push it on the industry. And we continue investing in technology for green hydrogen, which is going to be the future,” he said.