SINGAPORE – The chief executive of the world’s largest oil company, Aramco, on Oct 21 said the transition away from fossil fuels for developing countries was “unrealistic” and “too expensive”, adding that fossil fuels will continue to play a role for these growing economies.

       Giving a keynote address at an energy conference in Singapore where decarbonisation was a key focus, the president and chief executive of Saudi Arabia’s state-owned company, Mr Amin Nasser, told several hundred attendees that conventional fossil-based energy cannot be replaced by cleaner sources.

       Instead, it is about ensuring that new energy sources coming online are met by alternatives, such as renewables, he said.

       “So rather than an energy transition, we are really talking about energy addition, where just the growth is mostly met by alternatives, instead of replacing conventional energy in any meaningful way. Yet, the current transition plan continues to ignore this reality,” he added.

       The burning of fossil fuels causes the release of planet-warming emissions that drive climate change.

       Confronted with increasingly severe extreme weather events and changing weather patterns, countries are growing more aware of the urgency in reducing fossil fuels to tackle climate change.

       But in his keynote speech, Mr Nasser said the world needs to be “pragmatic” and avoid a “one-size-fits-all” approach, and allow countries to decarbonise at a pace that they deem suitable.

       Investments should go into improving the state of conventional oil and gas technologies that developing nations need and can afford, while prioritising the reduction of greenhouse gas emissions from those energy sources, he added.

       “We should not ask to stop using oil and gas while the other alternatives are not ready... and the cost (of renewables) is high compared with fossil fuels,” said Mr Nasser.

       Mr Nasser was speaking on Oct 21 at the opening of the annual Singapore International Energy Week (Siew) conference at the Marina Bay Sands Expo and Convention Centre, held from Oct 21 to 25.

       The theme of the conference in 2024 is centred on “A Connected and Sustainable Energy World”, connecting policymakers, industry leaders and experts to further discussions on “advancing sustainability amid the global energy transition”.

       Siew organisers said in early October that the event aimed to “realise the vision for a more sustainable and interconnected global energy landscape”.

       The Straits Times found that Aramco is a key sponsor for the 2024 event, with its name printed larger compared with the rest of the corporate sponsors, which include fossil fuel companies like ExxonMobil, Chevron and generation companies such as Sembcorp and Keppel.

       On the conference website, Aramco is named as a Siew Diamond Sponsor, which appears to be the event’s highest sponsorship tier. The fossil fuel giant had a significant presence at the event, with a walk-through exhibit.

       ST has asked the Energy Market Authority, the conference organiser, why it chose Aramco as a key sponsor, and how much the conglomerate paid to sponsor the five-day conference.

       Progress has been “way off pace” for renewables, Mr Nasser said, with wind and solar combined supplying only 4 per cent of total world energy generation; likewise, only 4 per cent of the 1.5 billion vehicles on the road are electric vehicles.

       These cleaner vehicles, which replace that of diesel-powered ones, have only been rolled out in the US, China and other richer countries in the European Union, Mr Nasser noted.

       Saying the global energy transition “has failed”, Mr Nasser said countries have not been able to provide energy that is affordable, with electricity prices in Europe rising as much as three- to fivefold despite the shift to renewables.

       This is because of the high costs of electricity generation, when these intermittent sources are “hooked to” the electricity grid, requiring the need for expensive battery storage solutions, he claimed.

       But in September, the Financial Times reported that Europe’s energy prices dipped below zero in 2024 for a record number of 7,814 hours, owing to excess supply due to the rapid development of wind and solar power generation.

       In 2022, it faced a spike in electricity prices amid an oil and gas crunch due to the Russia-Ukraine war.

       Noting that the energy transition is “expensive for everyone”, and estimated to cost US$100 trillion (S$131.3 trillion) to US$200 trillion globally by 2050, Mr Nasser noted that developing countries will require a “staggering amount of front-end capital” to drive the transition.

       The progress of getting countries to transition away from fossil fuels is “far slower, far less equitable, and far more complicated than many expected”, he added.

       “The Global South cannot afford massive investments in new energy, especially when many countries are only at the start of their development journey, and trying to force an unworkable and unaffordable transition plan on them will only threaten their economic progress,” said Mr Nasser.

       The Global South, which refers to developing and less developed countries, is seeing increasing demand for oil and gas, with the demand for both fossil fuels being at an “all-time high” despite there being billions of dollars invested in the global energy transition, he said.

       Investments over the long term must therefore reduce the cost of renewables and new energies like hydrogen, to ensure that electricity for the masses remains secure and affordable, he added.

       This is not the first time that Mr Nasser has called for fossil fuels to remain a key part of the world’s energy mix.

       At a separate energy conference in Houston in March, he said the energy transition is “visibly failing” on most fronts and lamented how the oil industry has been painted as an archenemy.

       Countries that produce oil and gas have long maintained that fossil fuels will still need to be part of the global economy, even amid calls for countries to wean themselves off fossil fuels to avert catastrophic climate change.

       At the UN COP28 climate conference held in Dubai in December 2023, Saudi Arabia and other oil-rich Arab states were reportedly the strongest opponents of stronger language against fossil fuels.

       Instead of the “phase out” of coal, oil and natural gas, countries agreed to “transition away” from fossil fuels instead.

       The New York Times reported in 2022 that Saudi Arabia has been working to keep fossil fuels at the centre of the world economy by lobbying and funding research and using its diplomatic muscle to obstruct climate action. Simultaneously, it is actively decarbonising its own economy, by having renewables power 50 per cent of the energy sector by 2030.