AN ITP MEDIA GROUP PUBLICATION NOVEMBER 2023 • VOL. 19, ISSUE 11 STRATEGISING ENERGY DIVERSIFICATION Petrofac’s new Group Chief Executive, Tareq Kawash discusses the company’s role in the energy transition EXCLUSIVE INSIGHT BY DR ABDULLAH BELHAIF AL NUAIMI ON NET-ZERO5L L LMS &WPOJLTJOOPWBUJWFQSPEVDUTBOETPMVUJPOTQBWFUIFXBZ UPHSFBUFSSFTPVSDFFGGJDJFODZBOETVTUBJOBCJMJUZ0VS QSPEVDUTBSFDPOUJOVPVTMZEFWFMPQFEBOEBEBQUFEUPUIF OFFETPGUIFDVTUPNFST*OPSHBOJDNBUFSJBMTXJUI TVQFSJPSQSPQFSUJFTTVDIBTTJMJDB TJMBOFT QFSPYJEFTBOE TQFDJBMUZDBUBMZTUT BOEIJHIUFDIQPMZNFSTBTXFMMBT DPNQPVOET DPNQPTJUFTBOENFNCSBOFTBSFKVTUBGFX PGPVSNBOZJOOPWBUJWFPGGFSJOHT8FDPOUJOVFUP DPOUSJCVUFUPBHSFFOFSFDPOPNZ CZUIJOLJOHCFZPOE DIFNJTUSZ UPEBZBOEUPNPSSPX XXXNFBFWPOJLDPNNOVEMBER 2023 / Volume 19 / Issue 11 16 Cover Story: Strategising Energy Diversification 30 Interview: Tech Trailblazer Eman Kawas 12 Hydrogen as a Carbon Enabler 6 Opinion: Decoding Net- Zero Highlights in this issue: 16 COVER STORY 3 IN THIS ISSUE oilandgasmiddleeast.comNovember 20234 IN THIS ISSUE oilandgasmiddleeast.comNovember 2023 Scan the QR code and subscribe for full access to our website, monthly issues, and magazine archive. Also inside: Subscribe now 50 10 /Flaring CC Energy’s pioneering flare- to- power in Oman 22 / OPEC and Africa OPEC Chief calls for equitable action for Africa to eliminate energy poverty 22 / Carbon Capture UAE leads MENA region in energy transition 26/ Energy Transition An indepth look at how Middle East natural gas is powering the green revolution 30/ Green Power Algeria’s SONATRACH looks to trees as a solution to net-zero 38/ Circular Economy How circularity and energy diversification can work together in the transition 50 / Quote-worthy What leaders are saying about the oil and gas industry 40 / Project Focus Saudi Aramco - Zuluf Oilfield Expansion 6 8 22 30 Last month KEEP UP-TO-DATE For all the latest news, check out www. oilandgasmiddleeast .com5 EDITOR’S LETTER oilandgasmiddleeast.comNovember 2023 Dean Mikkelsen Editor To subscribe to Oil & Gas Middle East, or other ITP Business titles, go to: www.itp.com/subscriptions. P O Box 500024, Dubai, UAE Tel: 00 971 4 444 3000 Web: www.itp.com Offices in Abu Dhabi, Dubai, London, Mumbai, Riyadh & Geneva ITP Media Group CEO: Ali Akawi Managing Director: Alex Reeve Editorial Group Editor: Kate-Lynne Wolmarans Tel: 00 971 4 444 3541 | Email: kate.wolmarans@itp.com Editor: Dean Mikkelsen Tel: 00 971 4 444 3248 | Email: dean.mikkelsen@itp.com Commercial Editor: Angitha Pradeep Tel: 00 971 4 444 3278 | Email: angitha.pradeep@itp.com Art Art Director: Amjad Ayche Designer: Tofiq Memon Advertising Group Commercial Director: Anup Nagpurkar Tel: 00 971 4 444 3573 | Email: anup.nagpurkar@itp.com Commercial Manager: Andrea Mocay Tel: 009 71 52 329 3301 | Email: andrea.mocay@itp.com Photography Chief Photographer: Rajesh Raghav Videographer: Muhammad Kaleem Video Editor: Liju Cheruvathur Multimedia Content Creator & Presenter: Mina Vucic Social Media & Production Manager: Andy Ruedas Production Production Manager: Denny Kollannoor Production Coordinator: Manoj Mahadevan Senior Image Editor: Emmalyn Robles Distribution Circulation Executive: Rajesh Pillai Distribution Coordinator: Avinash Pereira Marketing Director of Awards & Marketing: Daniel Fewtrell ITP Group CEO: Ali Akawi CFO: Toby Jay Spencer-Davies The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be repro- duced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. Published by and © 2023 ITP MEDIA Group FZ-LLC. SUBSCRIBE S tep into the world of COP28, the most anticipated issue of Oil and Gas Middle East. Dubai is buzzing with anticipation as it prepares to host a groundbreaking conference and debate on the pressing topics of climate change and the energy transition. Within the pages of this edition, we delve deep into how the industry is playing a pivotal role in propelling the world towards a net-zero environment. Discover the innovative technology unveiled by Petrofac, paving the way for a sustainable future. Explore Algeria’s return to nature’s own solution for combating climate change. The solution put forward is trees as a natural carbon capture method. Intriguingly, we shed light on the dire warnings sounded by the head of OPEC for Africa, highlighting the challenges faced by many nations on this vast continent that lack even basic access to fuel, let alone power, while the world looks to the global South for decarbonization solutions. Furthermore, this issue boasts an exclusive contribution from Dr. Abdullah Belhaif Al Nuaimi, the former Minister of Climate Change and the Environment in the United Arab Emirates, who played a pivotal role in bringing COP28 to Dubai. Get ready to embark on an enlightening journey through the pages of this COP28 edition, where we explore the crucial intersections of energy, climate, and progress. Happy reading! The Future of Energy and Climate Change6 OPINION oilandgasmiddleeast.comNovember 2023 T he Paris Agreement of 2015 was a landmark achievement in the global fight against climate change, as 197 countries under the UNFCCC agreed to limit global warming to well below 2°C, preferably 1.5°C, compared to pre-industrial levels. However, the original text of the agreement did not use the terms “net-zero”, “carbon neutrality”, or “climate neutrality”, which are often employed interchangeably in climate discourse. While these terms share a common goal of reducing greenhouse gas emissions, they bear nuanced distinctions in meaning and scope. Net-zero encompasses the attainment of equilibrium between greenhouse gas emissions generated and those removed from the atmosphere, encompassing all greenhouse gases, not just carbon dioxide (CO2). It mandates an exhaustive reduction of emissions at their source, coupled with the extraction of any residual emissions via natural or technological means. Such an approach aligns with the ambitions of the Paris Agreement, rendering it a compelling goal for corporate climate endeavours. In contrast, carbon neutrality centers on offsetting CO2 emissions produced by an entity, product, or service by securing equivalent CO2 reductions or removals elsewhere. It exclusively addresses CO2 emissions, omitting other greenhouse gases, and does not necessarily require the reduction of emissions at their source. Carbon neutrality can be accomplished through investments in carbon sinks such as forests or oceans or through carbon credits, including renewable energy projects or emission reduction programs. Businesses often embrace this approach to showcase their environmental commitment, although it may fall short of effectively limiting global warming to 1.5°C or 2°C. Conversely, climate neutrality parallels carbon neutrality but extends its purview to encompass all types of greenhouse gases, not restricted to CO2. Achieving climate neutrality signifies that an entity exerts no net influence on the climate system, either by diminishing emissions to zero or by offsetting emissions through removals or reductions elsewhere. Low- carbon technologies, such as renewable energy or electric vehicles, and support for climate initiatives, including adaptation and resilience projects or climate justice campaigns, are paths to realising climate neutrality. Governments and organisations frequently invoke this concept to exemplify their dedication and leadership in combating climate change. In the prelude to the Paris Agreement, the IPCC’s fifth assessment report in 2014 delineated the permissible amount of CO2 emissions compatible with limiting global warming to specified levels. While this landmark agreement urged nations to “achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century”, it “DECODING NET-ZERO, CARBON NEUTRALITY, AND CLIMATE NEUTRALITY IN CLIMATE ACTION” How do these terms differ in meaning and scope, and what do they imply for achieving the Paris Agreement’s goals?7 OPINION oilandgasmiddleeast.comNovember 2023 voiced their intent to attain net-zero emissions by 2050 or earlier, with more than 3,000 non- state actors, constituting over 15% of the global economy, joining this campaign. Nevertheless, a chasm persists between prevailing actions and commitments and the requisite level of ambition to curtail global warming within the stipulated limits. Despite the potential advantages of net- zero policies, encompassing improvements in public health, bolstered energy security, and the creation of novel economic prospects, these policies have thus far fallen short of actualising the Paris Agreement’s aspirations. Net-zero is built upon the premise of balancing emissions by removing an equivalent quantity from the atmosphere. Unlike the Kyoto Protocol’s concept of carbon neutrality, which introduced binding emissions reduction targets and mechanisms like emission trading and carbon offsetting for developed nations, net-zero lacks binding measures. Numerous nations have announced intentions to attain net-zero emissions but have yet to delineate comprehensive implementation plans. Some have enacted laws mandating net-zero emissions without specifying the execution strategy. The path to net-zero remains murky, necessitating many nations to adjust their targets, as exemplified by the recent announcement from the UK Prime Minister, extending the 2030 target for zero- emission vehicle (ZEV) sales to 2035. Regrettably, extant net-zero policies harbour multiple shortcomings. While net-zero furnishes a compelling slogan and goal, its actualisation demands an intricate, unpredictable, interdependent, and transformative shift that may remain elusive without a coordinated transition plan, underpinned by research, investments, policies, and regulations. The repercussions of net-zero policies may be asymmetric, confronting technical, economic, and social hurdles. Achieving net-zero emissions will necessitate widespread deployment of low- carbon technologies, all of which contend with obstacles like mineral scarcity and exorbitant costs. Moreover, realising net-zero emissions mandates substantial changes in behaviour, institutions, and governance at every tier, an arduous feat within the constrained timeframe, marked by resistance from entrenched interests, inertia, and insufficient awareness. Net-zero policies, as such, aren’t a panacea for addressing neglected to explicitly specify the quantity of CO2 equivalents that should be removed. This mirrors the principles of net-zero emissions and carbon neutrality, although the exact terminology wasn’t employed. The term “net-zero” amalgamates an array of commitments and initiatives geared toward achieving net-zero emissions by 2050, aligning with the Paris Agreement’s objective to limit global warming to 1.5°C or 2°C. It hinges on sustaining a balance between greenhouse gas emissions and their removal from the atmosphere via natural or technological means, such as afforestation, reforestation, or carbon capture and storage. Prior to the 26th UN Climate Change Conference of Parties (COP26) held in Glasgow, UK, in November 2021, the United Nations orchestrated the “race for net zero” campaign, soliciting support and leadership from diverse sectors, including businesses, cities, regions, investors, and educational institutions. As of September 2021, over 120 countries had the climate crisis, necessitating meticulous design and execution to ensure effectiveness, credibility, fairness, and feasibility. They must complement other policies and measures that address the root causes and consequences of climate change, recognising the limitations of existing knowledge and emerging greenhouse gas sources. The MIT Global Change Forum convened experts from diverse sectors and disciplines in October 2021, broaching subjects such as carbon budgets, decarbonising energy and industry, nature-based solutions, climate and health, negative emission technologies, and policy design. The forum’s conclusion underscored the urgency of in-depth modeling of intricate interactions between human and natural systems, emphasising collaboration and innovation across all stakeholders, encompassing governments and international institutions. The experts called for unprecedented and immediate action from all quarters to transform net-zero from aspiration to reality. The reality however is that the Earth has already warmed by about 1°C compared to the pre-industrial era. Also, the current NetZero policies are not enough to prevent further warming, and they need to be supported by more actions and measures. Predicting the future emissions and temperatures is very uncertain and unreliable, because the atmosphere has been affected by the past emissions for a long time. Therefore, stopping global warming is almost impossible. Dr Abdullah Belhaif Al Nuaimi - Fomer UAE Minister of Climate Change and Environment8 RENEWABLES BEAR MARKET oilandgasmiddleeast.comNovember 2023 I n a surprising turn of events, renewable energy stocks have taken a beating in recent months, facing significant setbacks in comparison to their fossil fuel counterparts, primarily attributed to surging interest rates. The S&P Global Clean Energy Index, comprising 100 leading companies in the solar, wind power, and other renewables sectors, has endured a staggering 20.2% decline over the past two months, as reported by the Financial Times. This sharp dip marks the index’s most substantial decline since 2013, raising concerns among investors and industry experts. Conversely, the S&P 500 Energy Index, dominated by oil and gas companies, has seen a 6% upturn during the same period. Despite governments worldwide offering billions in tax credits and subsidies to bolster renewable energy adoption, the sector is facing an uphill battle. The primary culprit behind this renewable energy downturn is the relentless rise in interest rates. These soaring rates have imposed significant challenges on companies’ ability to manage long-term contracts and higher operational costs. Furthermore, borrowing costs have surged, making servicing debt a more expensive endeavour for these firms. Adding to the complexity of the situation, the International Energy Agency (IEA) has projected a substantial increase in global power capacity, set to surge by over a third this year. The IEA’s forecast attributes this growth to a combination of factors, including policy momentum, escalating fossil fuel prices, and mounting energy security concerns. As the renewable energy sector grapples with these unexpected challenges, industry leaders and policymakers are now closely monitoring the situation. Governments and stakeholders worldwide may need to reassess their strategies and consider additional measures to ensure the continued growth and sustainability of clean energy sources in the face of fluctuating economic conditions. RENEWABLE ENERGY STOCKS PLUMMET 20% WHILE FOSSIL FUELS SOAR Renewable energy stocks suffer a 20.2% drop in 2 months due to rising interest rates, while fossil fuel stocks rise 6%. By: Dean Mikkelsen7578 77a78U U7578 ) #. &JU /U " #JU ˉʼˆʼˇʶˇˀʶˊʸʵˆʼˇʸ ˅ʸʺʼˆˇʸ˅ʼˁʶˇˀʶ ˂˅ʺʴˁʼˍʸ˅ˊʸʵˆʼˇʸ ˇʻʸʹʼ˅ˆˇ ʶˈˆˇ˂ʷˌˇ˅ʴˁˆʹʸ˅ʙ ˀʸˇʸ˅ʼˁʺʶ˂ˁʹʸ˅ʸˁʶʸʼˁ ˇʻʸˀʼʷʷʿʸʸʴˆˇʔ U ʶʴʿʿʼˁʺʴʿʿʼˁʷˈˆˇ˅ˌ˃ʼ˂ˁʸʸ˅ˆʔ ˆ˛ˢ˪˖˔˦˘ˬˢ˨˥˜ˡˡˢ˩˔˧˜ˢˡ˦ʟ˚˔˜ˡ˜ˡ˦˜˚˛˧˦ʟ ˔ˡ˗˙ˢ˦˧˘˥˖ˢ˟˟˔˕ˢ˥˔˧˜ˢˡ˦˔˧ʖʶˇˀʶʥʣʥʦʡ ʼˁʹ˂ʳʶˇˀʶʡˇʸʶʻNext >