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Saudi Aramco’s chief executive Amin Nasser has called for what he dubbed a reset in the transition plans for developing countries, citing strong projected growth in oil demand for the Global South.
Developing economies are growing and living standards are rising, Nasser said today at the Singapore International Energy Week, as cited by Reuters. This growth is driving higher oil demand, he added, noting this demand growth would extend over a long time. Even when growth slows down and eventually stops, Nasser added, demand for oil will remain at a plateau for another extended period.
“If so, more than 100 million barrels per day would realistically still be required by 2050,” Aramco’s chief executive said, adding that “This is a stark contrast with those predicting that oil will, or must, fall to just 25 million barrels per day by then. Being short 75 million barrels every day would be devastating for energy security and affordability.”
Because of all this, developing countries should decide on the best energy mix for themselves, Nasser suggested, as well as on a transition pace that is right for them. “Our main focus should be on the levers available now,” the executive said.
Nasser’s comments come on the heels of a new transition cost estimate for the Asia Pacific by BloombergNEF, which said last week that the region needs to triple what it is already spending on the transition to $2.3 trillion by 2030 in order to stay on course for meeting the Paris Agreement targets.
According to Nasser, Asia and other developing nations may need investments of up to $6 trillion annually to advance the transition. Meanwhile, Asia relies on hydrocarbons for 84% of its energy demand, Nasser said in its comments today. New sources of energy are covering new demand rather than displacing conventional sources of energy, he noted.
