The Middle East is home to many oil-producing countries and has been a key player in the global energy industry. However, socioeconomic and political events and pressures in the past several years, including an enormous increase in energy demand and the global pressure to reduce carbon emissions have forced the region to rethink its stance.
Since the start of the last decade, countries in the region have started to embrace renewable energy as an alternative source of energy. This is prevalent in the continuous investments that major countries have committed and implemented in the last few years. Policy pronouncements were made, such as in the following development plans of major oil producing countries: the Vision 2030 of the Kingdom of Saudi Arabia, National Climate Change Plan of the UAE 2017–2050, the Oman 2040, and the Kuwait Energy Outlook.
To give more information on the overall Energy Transition journey in the Middle East, we requested our partner for Oman Dr. Syham Bentouati to answer some key questions about this subject.
Dr. Syham is the Managing Director of NAFAS International LLC, a consulting company active in the MENA region covering various fields with special interest in sustainability, innovative technologies, business consultancy and In-Country Value. Prior to founding NAFAS International in 2015, she worked for Rolls-Royce for seven years and nine years at Petroleum Development Oman. She holds a PhD in Electrical Engineering from The University of Sheffield.
Read her insights below on the Energy Transition in the Middle East.
How does the global movement towards energy transition affect oil-producing countries in the Middle East?
So far, the global movement towards energy transition does not seem to affect oil producing countries that much. In fact, many of them are taking part in that transition. Some of the most ambitious targets and the biggest projects are from or in the region.
If I take Oman as an example, Oman’s Vision 2040 includes targets for percentage of renewable energy in the energy mix and right now the government is working on policies to support improving energy efficiency across the Sultanate. A large number of renewable energy projects are in the pipeline with some already commissioned or about to. The socio-economic impact is very clear to both the government and the general public.
There is also the fact that producing energy from renewable energy makes economic sense since it will free natural gas (cleaner than oil) for export or other usage.
What is the overall trend for energy companies/major oil producers in the region in terms of adapting to the global call for energy transition? How do you think they are positioning themselves in the new energy market?
Most energy companies/major oil and gas producers have great targets with respect to renewable energy and energy efficiency. For example, the main oil and gas producer Petroleum Development Oman will now become part of a bigger company called “Energy Development Oman”, which will include energy efficiency and renewable energy related development.
Another example is OQ, another big energy company that has a very large Renewables section. And that trend continues with other companies at differing levels depending on their sizes, strategies, etc.
So, it is fair to say that the energy companies/major producers see the energy transition as an opportunity rather than a threat
What is the role of technology and innovation in the region’s shift towards the new energy market?
Technology and innovation are key in the shift towards the new energy market. It might not be very known but energy companies have a long history of innovation and lately it included many related to renewable energy and sustainability. Maybe one of the most famous examples is Oman’s Miraah project which uses steam produced from solar energy for enhanced oil recovery instead of using steam produced by burning gas. This solar steam saved humongous amounts of gas and related CO2 emissions.
What are the opportunities for innovators/technology suppliers in the region’s energy transition journey? What technology domains are popular to the energy market given this shift to a new energy mix?
In addition to the usual applications related to producing electricity and improving energy efficiency, all technologies that can make the oil and gas sector more sustainable are most welcome. This can be related to water (source, treatment and disposal/re-use), managing flaring, improving operations (surface and sub-surface) through automation and artificial intelligence for example, among others.
There is already a lot happening and much more that can happen.