In an interview given to Lubna Bouza from Sky News Arabia, Dr Carole Nakhle, CEO of Crystol Energy, discussed the strategies adopted by oil companies to embrace the energy transition and greening their portfolio.
Dr Nakhle stated that oil companies are trying to rebrand themselves as energy companies, covering a wider spectrum of the energy sector. However, their core business is still oil and gas. According to the International Energy Agency (IEA), between 2015 and 2019, less than 1% of the major oil companies’ capital expenditures were targeted towards renewable energy investments. A diversion between European and American oil companies can be clearly identified, with the former showing greater enthusiasm towards green energy projects.
Dr Nakhle added that oil and gas companies support a carbon tax, which is yet to gain a wider appeal given its potential impact on consumers.
Commenting on the IEA’s recommendation to halt exploration of oil and gas beyond 2021, Dr Nakhle pointed to the departure of the IEA’s from its vocal stance over the last few years whereby the agency had warned of investment gap in the oil and gas industry. However, the latest recommendation is one of many ambitious measures for the world to achieve net zero target by 2050.
In the long term, energy demand growth will be driven by developing countries, particularly Asia (China and India). Demand for renewable energy will definitely continue to grow but this may not necessarily be at the expense of fossil fuels. Between 1985 and 2019, the fossil fuels’ share in the world’s electricity mix is almost unchanged, so we should not expect miracles to happen overnight.