His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Group CEO of the Abu Dhabi National Oil Company (ADNOC), discussed energy industry dynamics with the leading energy economist and Pulitzer-Prize winning author Dr. Daniel Yergin, Vice Chairman of IHS Markit, during a virtual CERA conversation.
Speaking during the series which has featured Ben van Beurden, CEO of Royal Dutch Shell, Amin Nasser, President and CEO of Saudi Aramco, and Michael Wirth, Chairman and CEO of Chevron, H.E. Dr. Al Jaber explained how ADNOC has remained resilient as it navigates this period of uncertainty and noted the company is realizing the benefits of its transformation which it started four years ago at the direction of the UAE leadership.
“In fact, these unprecedented times have highlighted just how forward-thinking our leadership’s guidance was in driving a comprehensive transformation at ADNOC. We have concentrated on improving our performance, strengthening our agility, while continually reinforcing efficiency throughout our business.
“Most importantly, we have focused on what we can control, our costs, and regardless of the situation, this focus on costs won’t change. As a result, we’ve managed to remain resilient through this downturn, while also still delivering against our strategic priorities,” H.E. Dr. Al Jaber said.
H.E. Dr. Al Jaber highlighted how ADNOC has drawn on its strong Health, Safety, and Environment (HSE) culture to mitigate the risks presented by COVID-19 and ensure business continuity. He stressed ADNOC’s number one focus has been the health and safety of its employees and detailed how this approach closely aligns with the wise measures put in place by the UAE leadership to protect everyone living in the country.
“In fact, one of the reasons we have come through this period in relatively good shape is our well-established focus on what at ADNOC we call ‘100 percent HSE’. This safety-first approach is very much in line with the UAE’s overall response to COVID-19, which has prioritized the health and safety of everyone living here. Basically, we have deployed a ‘test early and test often’ approach to managing the pandemic,” H.E. Dr. Al Jaber said.
H.E. Dr. Al Jaber went on to explain how despite the impact of COVID-19 on global economies, the UAE’s trusted business environment continues to attract world-class investment opportunities, following ADNOC’s $20.7 billion (AED 76 billion) energy infrastructure deal announced in June. ADNOC is leveraging this stable environment to create attractive investment opportunities and is open to new partnerships that make economic sense, H.E. Dr. Al Jaber said.
A recent example of this is ADNOC’s new shipping joint venture (JV) with China’s Wanhua Chemical Group that will transport LPG to growth markets.
“Our investment strategy remains the same. It is focused on unlocking value, making smarter use of our capital, and more proactively managing our assets. And we see some of the biggest opportunities right here at home, where we are making smart investments to expand our operations, especially in the downstream, to drive the UAE’s industrial growth and increase in-country value. A prime example of this is our recently announced JV with one of the largest Abu Dhabi holding companies, ADQ.
“The opportunity here is huge – to capitalize on our existing world-class infrastructure, high-quality, competitive feedstock, and excellent geographic location to drive sustainable growth. And of course, we will continue to develop a robust pipeline of investment and partnership opportunities. In fact, I would like to extend an open invitation to existing and new partners to explore the potential for attractive growth opportunities across ADNOC’s value chain,” H.E. Dr. Al Jaber said.
Responding to a question on the role of the new Ministry of Industry and Advanced Technology which he leads, H.E. Dr. Al Jaber took the opportunity to share insights on the UAE leadership’s vision for the ministry. He explained that the ministry was established to help support the national agenda by empowering and enabling industrial development in order to drive economic growth, diversification, and value retention.
“It will focus on industries of strategic importance to our national economy and will promote in-country value with a focus on industrial development. At the core of our mandate is 4IR (the fourth industrial revolution) and specifically the synergies between industry and technology, including machine learning, the internet of things, automation and digitization. Similar to ADNOC, the Ministry will extend an open invitation to all those who would like to partner with the UAE,” H.E. Dr. Al Jaber said.
He highlighted that ADNOC’s strategy as approved by Abu Dhabi’s Supreme Petroleum Council (SPC) enables the company to support the new ministry’s mandate to strengthen the UAE’s industrial base, leverage technology in the 4th Industrial Age, and promote in-country value.
“We have been enabling the industrial development of the UAE by going further downstream and prioritizing in-country value creation across all our contracts and projects while adopting advanced technology and digitizing our value chain,” H.E. Dr. Al Jaber said.
During the session, H.E. Dr. Al Jaber also commented on the importance of technology in enabling sustainable economic progress in the post-COVID era. He said the COVID experience has accelerated the UAE’s transition to a digital economy.
“The UAE not only understands the critical impact of this transition but is in fact directing investment in that space. For example, we have created the world’s first AI (artificial intelligence) institute right here in Abu Dhabi – the Mohamed bin Zayed University for Artificial Intelligence which will enroll its first intake of students this January,” H.E. Dr. Al Jaber said.
There is significant potential for AI-inspired technology to help push the frontiers of progress across multiple sectors, particularly in the oil and gas industry, H.E. Dr. Al Jaber added. “At ADNOC, we are embedding the latest technologies across our value chain to enhance our efficiency and maximize our performance.”
H.E. Dr. Al Jaber shared his perspective on oil markets and noted that the market has clearly tightened in the last two months, as economies continue to reopen in Asia, Europe, and the US, while OPEC’s leadership has also helped build confidence in the market. He said the industry will have to remain cautious and nimble as it adjusts to the multiple structural macro-economic changes taking place.
The wide-ranging session touched on several topics including the energy transition. H.E. Dr. Al Jaber pointed to the fact that the UAE has been a longstanding supporter of a diversified energy mix and the country believes it makes economic sense to invest in all forms of energy.
“We were the region’s first mover in promoting and investing in advanced energy. We are already home to two of the world’s largest solar projects – Noor Abu Dhabi and the Mohamed bin Rashid Al Maktoum Solar Park in Dubai. And we just announced plans to create the world’s largest solar project in Abu Dhabi – a 2 gigawatts facility that will be almost double the capacity of our two previously largest projects,” H.E. Dr. Al Jaber said.
As the UAE diversifies into clean energy, it is also investing in the responsible production of oil and gas which will still provide over half of the world’s energy, even in the most fast-paced scenarios, H.E. Dr. Al Jaber said.
“This presents us with the key challenge of how to produce more energy with fewer emissions. This challenge plays to one of ADNOC’s strategic advantages, because we are not only one of the lowest-cost producers, but also among the lowest carbon producers in the oil and gas industry. This combination of low cost and low carbon gives us a distinct competitive edge,” H.E. Dr. Al Jaber said.