Saudi Arabia’s oil company isn’t afraid of electric vehicles. As it prepares to sell a stake in the company to investors, the CEO reassured a Houston audience that the need for petroleum isn’t going away any time soon.
“I am not losing any sleep over ‘peak oil demand’ or ‘stranded resources,”’ Saudi Aramco chief executive officer Amin Nasser said at the CERAWeek by IHS Markit conference on Tuesday. “We must push back on the idea that the world can do without proven and reliable sources” of energy, he told the gathering. “Oil and gas will continue to play a major role in a world where all energy sources will be required for the foreseeable future.”
Aramco, with an estimated 260bn barrels of oil reserves, is the centrepiece of Saudi Arabia’s mission to re-invent itself as a diversified economic powerhouse. The government plans this year to sell about 5% of the company, known officially as Saudi Arabian Oil Co, in what could be a record public offering.
Nasser largely avoided talking about the IPO, saying only that it would happen “where and when” the Saudi government decides. Unlike in prior speeches, where he’s repeatedly said the IPO would happen by the end of 2018, Nasser gave no time frame.
Khalid al-Falih, the Saudi oil minister, has softened his language on timing, saying in January that “he hoped” that 2018 would be a right time for the IPO. In the past, al-Falih has said the IPO was “on track, on time” for 2018.
Nasser and Aramco officials later declined to answer questions about the IPO’s timing.
Meanwhile, a growing body of research is painting a bearish picture for oil beyond the next 20 years as more environmentally friendly vehicles hit roads across the globe. Rapid adoption of electric vehicles could mean oil demand peaks by the 2030s, according to Bank of America Corp and BP, a prospect that’s likely to worry institutional investors in the energy industry. But Nasser criticised “irrational hopes of rapid switching” and said electric vehicles won’t deliver quick and cheap reductions in carbon emissions until the power that fuels them is clean. Future transportation will not be a matter of “either/or” between internal combustion engines or electric vehicles, he said, pointing to alternatives that include hydrogen-fuelled cars and plug-in hybrids.
The challenges for large-scale use of transportation alternatives are affordability and infrastructure, he said. Observers are glossing over the difficulty governments will have subsidising huge fleets of electric vehicles, according to Nasser.
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