ADIPEC 2023: lack of investment emerging as a ‘serious issue’ as energy demand shoots up

With everyone talking about US $100 per barrel oil, one person who won’t be drawn on price is His Excellency Suhail Mohamed Faraj Al Mazrouei, UAE Minister of Energy and Infrastructure. “We gave up looking at the price as a one target, so that's why I keep saying we will never target a certain price range,” HE Al Mazrouei said during a fireside chat on day 1 of ADIPEC in Abu Dhabi. “What we target is dealing with a bigger issue and a bigger problem.”

One area of concern is lack of investment, with OPEC+ countries sitting on 80 percent of the resources, but only producing 40 percent of the oil. Collectively the group has lost four billion barrels of oil production per day over three years, due to lack of investment from international oil countries (IOCs) and other sectors. And that doesn’t seem to be improving. “What we have been worrying about for a long time, we still see it as an issue, is attracting investors and IOCs to come and invest,” the minister said. “And we would like a ramp up in the transition.”

His worry is not an undersupplied market in the short-term, but in the medium and long-term. It’s too risky if everyone produces at their maximum capacity now, and there is wisdom holding back resources for an uncertain future. When it comes to China and the slowdown in growth everyone seems to be talking about, HE Al Mazrouei said he had more confidence in OPEC+ data than analysts’ forecast. “Last year, that was the claim, and we ended up with the highest increase in demand that we have ever seen in history,” he said.

Speaking about the UAE’s sustainability record ahead of COP28, Al Mazrouei harkened all the way back to 2006 and the establishment of Masdar, the Abu Dhabi Renewable Energy Company, which embedded in a range of projects here and around the world. That includes a UAE-US Partnership for Accelerating Clean Energy (PACE), which aims to deploy 100 new gigawatts of clean energy by 2035.

The UAE is a believer in the need to act and to act quickly, which is why COP28 is happening, said Al Mazrouei. At the same time, it’s essential to make sure consumers aren’t hit with energy prices they won’t be able to handle. “Transition is happening,” he concluded. “If we want the pace to be right, we need to thank those who are investing in providing resources during the transition.”