Saudi Aramco CEO Amin Nasser believes that peak oil and gas is unlikely to come anytime soon, and that investing in fossil fuels is still necessary. As the head of the world’s largest oil company, Nasser oversees the production of over 12 million barrels per day of oil and gas. Aramco’s massive output and profits far exceed those of other major oil companies like ExxonMobil and Chevron, making it a dominant player in the industry for years to come.
Despite the push towards renewable energy sources, the world’s reliance on carbon-spewing energy sources like oil, gas, and coal continues to increase. Renewable energy sources face challenges like scaling fast enough, high upfront costs, and convenience issues. Electric vehicles are becoming more popular, but global petroleum consumption continues to rise. As a result, oil demand remains high and is expected to continue growing as low-carbon alternatives are not yet competitive enough to meet the demand for transportation and industrial services.
Ironically, Saudi Aramco is already a big investor in the low-carbon transition, dedicating 10% of its annual capital spending to renewables and launching the Aramco New Energies division. They have completed solar projects and are in talks with Spanish oil giant Repsol for a stake in its renewables business. Aramco is also investing in CO2 capture and sequestration technologies to reduce emissions. One promising investment is in a New Mexico-based startup called Spiritus, which claims to have developed a passive CO2 capture technology using sorbent balls made of carbon-based graphene.
Saudi Aramco, with its strong financial position and ambitious growth plans, is also looking to diversify globally. They are investing in petrochemical plants in China, acquiring gas stations in Chile, and picking up stakes in LNG developers in Australia. Nasser is reportedly interested in potential deals, like acquiring BP, to help meet Aramco’s target of achieving net-zero carbon emissions by 2050. BP’s renewables arm, LightsourceBP, could be a valuable asset to help Saudi Aramco transition towards a more sustainable energy future.
Saudi Aramco’s financial performance remains strong, with high net income and revenue. The company plans to distribute significant dividends to shareholders, and its stock price is stable. With a strong balance sheet and a focus on growth, Aramco is pursuing new projects within and outside of Saudi Arabia. The company’s commitment to investing in renewables and sustainable technologies reflects a shifting landscape in the energy industry as global demand for low-carbon alternatives continues to grow.
