Distinguished guests, ladies and gentlemen, good morning once again.
It is an honor to share this CEO Plenary Session with Chairman Wang, Patrick Pouyanné, and Peter Coleman.
As I said in my earlier remarks, our industry faces a crisis of perception with our stakeholders.
In this session, I want to explore how some of those misperceptions are playing out in China and in the wider Asia region; and what we are doing at Saudi Aramco to address them.
Obviously, one of the most important pillars of our industry’s relationship with China is our enthusiastic support for President Xi’s history-making Belt and Road Initiative.
Saudi Arabia has long seen this as a win-win, given our strategic location linking east with west; because infrastructure development and connectivity are at its heart; and because collaboration and integration are essential ingredients of success – just as they are with our own Vision 2030.
But in my view, the enormity of the energy equation has been underestimated by many stakeholders because of several misperceptions.
Let me highlight three.
First, the oil supply and demand theories of recent years have clouded the picture.
Just 10 years ago, the issue was peak oil supply. People were convinced that the world was running out of oil fast while demand remained robust. And we were confidently told that Saudi Aramco would have to produce 25 million barrels per day!
Today, that wild theory has been demolished, and in fact forgotten.
Now, some analysts see the opposite.
They see demand quickly collapsing while supply is abundant, which is why ‘stranded resources’ has become a fashionable term!
The truth is almost certainly somewhere in between. But misperception has put a veil around it, directly threatening an orderly transition, a sustainable energy future, and energy security.
We need to help our stakeholders (including here in China and the wider Asia region) realize that oil and gas will remain vital to world energy for decades to come.
And we need to reassure them with our own long-term investments that the safety belt we have always provided is one they can continue to rely on.
Second, we acknowledge that battery electric vehicles will play an increasing role in people’s mobility.
But it also needs to be acknowledged that we are simply moving emissions from the car to the chimney until the electricity fuel mix becomes sufficiently clean.
Even 25 years from now, coal is still projected to make up half of that mix in major economies like China and India.
The world cannot wait that long if addressing climate change truly is the priority.
Yet this clouded thinking is preventing clear action that could make a real impact right now.
So what should we do in the interim?
At Saudi Aramco, we are determined to clear away the fog.
We are determined to use innovation and technology to lighten the carbon footprint of our fuel products so they are acceptable to society in the 21st century.
That is why we are:
• building an international gas business;
• delivering a zero-flaring program, including the elimination of methane gas emissions;
• developing advanced engine and fuels technologies of the future;
• investigating hydrogen-rich cleaner synthetic fuels, derived from oil;
• doing pioneering work on CCUS;
• and turning more crude oil directly into chemicals.