ARKANSAS, Oct 25 (Future Headlines)- Saudi Energy Minister Prince Abdulaziz bin Salman emphasized the enduring importance of hydrocarbons and the recent multi-billion dollar acquisitions by U.S. oil majors, Exxon Mobil and Chevron, during his address at the Riyadh Future Investment Initiative (FII) conference. He contended that these acquisitions, Chevron’s $53 billion purchase of Hess and Exxon Mobil’s $59.5 billion acquisition of Pioneer Natural Resources, signify the continued significance of hydrocarbons and have been made at an opportune moment.

Prince Abdulaziz underscored that Exxon and Chevron did not engage in these acquisitions with the intention of having stranded assets, and the timing of these deals was propitious. These acquisitions have attracted criticism from environmentalists who view them as undermining climate goals.

The Saudi Energy Minister also expressed his belief that the energy transition will necessitate the continued use of hydrocarbons, including petrochemicals. This perspective contrasts with the International Energy Agency’s (IEA) recent announcement, which posited that global fossil fuel demand is on track to peak by 2030 due to the increasing prevalence of electric vehicles and China’s shift toward cleaner energy sources.

OPEC, the oil producer group, maintains a different outlook, asserting that oil demand will continue to rise well past 2030. They advocate for substantial investments in the oil sector, amounting to trillions of dollars. Saudi Arabia, the world’s leading oil exporter, is actively investing in expanding its oil production capacity by 1 million barrels per day (bpd), with a target of reaching 13 million bpd by 2027.

Prince Abdulaziz firmly stated that these investments are not intended to create stranded assets. Saudi Arabia’s decision to increase its production capacity reflects its confidence in the demand for additional production. This assertion highlights the kingdom’s commitment to meet global energy demands and aligns with their belief in the enduring role of hydrocarbons in the energy landscape.

Reporting by Sarah White