Oil company of Saudi Arabia is not afraid of electric vehicles.
As it arranges to sell a stake in the company to investors, the CEO encouraged a Houston audience that the requirement for petroleum is not going away any time soon.
Amin Nasser, CEO of Saudi Aramco stated at the CERAWeek by IHS Markit conference in Houston on Tuesday, “I am not losing any sleep over ‘peak oil demand’ or ‘stranded resources.”
“We must push back on the idea that the world can do without proven and reliable sources” of energy, he said to the gathering. He also mentioned that, “Oil and gas will continue to play a major role in a world where all energy sources will be required for the foreseeable future.”
Aramco, with approximate 260 billion barrels of oil reserves, is the highlight of Saudi Arabia’s mission to re-invent itself as a expanded economic powerhouse. The intention of government this year is to vend about 5 percent of the company, known officially as Saudi Arabian Oil Co, in what could be a record public offering.
A developing body of research is painting a bearish picture for oil beyond the next 20 years as more environmentally friendly vehicles hit roads throughout the globe. Quick adoption of electric vehicles would mean oil demand increases by the 2030s, according to Bank of America and BP, a hope that is likely to worry institutional investors in the energy industry.
But Nasser criticized “irrational hopes of rapid switching” and stated that the electric vehicles won’t deliver fast and cheap depletion in carbon emissions until the power that fuels them is clean. Future transportation will not be a matter of “either/or” between internal combustion engines or electric vehicles, he stated, pointing to different options that include hydrogen-fueled cars and plug-in hybrids.
The challenges for large-scale utilization of transportation options are affordability and infrastructure, he mentioned. Spectators are glossing over the strain governments will have financing huge fleets of electric vehicles, according to Nasser.
He called on the industry to enlarge exploration, push to offset natural declines in producing fields and spend more than $20 trillion dollars in the next 25 years to encounter increasing demand.
He said, “Battery electric vehicles will grow and have a welcome role to play in global mobility. But given the competition and complexity of the transition, their impact on the 20 percent oil demand should not be exaggerated.”
He also noted the growing demand for oil outside of transportation, which makes up 20 percent of consumption, including its use in petrochemicals and air transport.
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