Arab News

RIYADH: The premature abandonment of traditional energy sources threatens energy security, leading to expenditure challenges, according to a top official of Saudi Arabian Oil Co.

Saudi Aramco Chairman Yasir Al-Rumayyan emphasized in an interview with Japan’s Nikkei on Thursday that the early phase-out of conventional sources has created cost-related challenges, as witnessed in the recent energy crisis. 

He said in the interview that bridging the gap between unrealistic goals through data will be necessary to drive the global economy toward carbon neutrality.

Al-Rumayyan explained that global demand for energy and petrochemicals is expected to continue rising in the long term, indicating the need for diverse forms of energy, both traditional and new, in the near future.

He pointed out that emerging economies, particularly China and India, continued to drive oil demand growth, considering that the fundamentals of the oil market remain generally sound throughout the rest of the year.

Discussing the oil industry and market indicators, Aramco’s chairman noted that the inhibition of investment in oil and gas has hindered the global energy transition instead of assisting it, making economies more vulnerable to shocks, as seen in recent years. 

He stated: “We have seen the world become less stable when issues related to energy security or the ability to bear its costs arise.”

Al-Rumayyan, who is also the governor of the Public Investment Fund, stressed that investing in traditional energy alongside ongoing efforts to enhance alternative resources and technologies is the most effective way to achieve an organized transition without compromising economic prosperity and energy security.

He also mentioned the support for energy transition coming from unrealistic global goals of energy mix and timelines, often attributed to impractical scenarios and assumptions.

Regarding Saudi Arabia’s Vision 2030 progress, the PIF governor reaffirmed that the transformational path launched in 2016 is evident in the comprehensive economic, political and social changes that have made Saudi Arabia a global business and tourism hub.

He stated: “The motivation for embarking on this transformative path was the importance of maintaining the flexibility and dynamism of our national economy.”

“Despite the challenges in recent years, we have tirelessly worked to support the Saudi private sector, diversify the economy, and invest in sectors where the Kingdom can compete globally,” he added.

Al-Rumayyan highlighted Saudi Aramco’s ambition to actively shape the Kingdom’s economic future and enhance its domestic and global competitiveness. 

For example, Saudi Aramco’s In-Kingdom Total Value Add program was designed to enhance the local manufacturing sector and improve the reliability of the supply chain through strategic partnerships and investments. 

The program facilitated the establishment of 31 new local factories last year, with the company entering into over 90 agreements to build long-term relationships with local suppliers valued at an estimated $17.3 billion.