Saudi Arabia Announces Comprehensive Electricity Sector Reforms

Minister of Energy Prince Abdulaziz bin Salman speaks during a news conference on Monday (Photo: Meshaal al-Qadir)
Minister of Energy Prince Abdulaziz bin Salman speaks during a news conference on Monday (Photo: Meshaal al-Qadir)
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Saudi Arabia Announces Comprehensive Electricity Sector Reforms

Minister of Energy Prince Abdulaziz bin Salman speaks during a news conference on Monday (Photo: Meshaal al-Qadir)
Minister of Energy Prince Abdulaziz bin Salman speaks during a news conference on Monday (Photo: Meshaal al-Qadir)

The Saudi Ministry of Energy revealed on Monday comprehensive reforms and restructuring plans of the electricity in the country as part of its efforts to enhance the efficiency, effectiveness and sustainability of the sector.

Minister of Energy Prince Abdulaziz bin Salman said that these reforms reflected the Kingdom’s transformation efforts in all fields, four years after the launch of Vision 2030 under the guidance and leadership of the Custodian of the Two Holy Mosques and the supervision and follow-up of the Crown Prince.

In a press conference to announce a royal decree on organizational, structural and financial reforms in the electricity sector, the minister said: “The Kingdom has moved from the stage of setting up plans to the practical application and implementation in many areas. The numbers and information provided by the Crown Prince about the accomplishments, in his recent speech, confirm that Saudi Arabia is steadily moving on the road to achieving the hopes and aspirations of its leadership and people.”

He noted that the new set of reforms would contribute to achieving sustainability and raising the efficiency of the electricity sector. They will positively affect the sector’s performance, he said, reduce the use of liquid fuels, increase the level of environmental commitment, and enhance the reliability of the electricity transmission network to enable electricity production from renewable energy sources.

The Minister of Energy pointed out that the Ministerial Committee for Restructuring the Electricity Sector would follow up the implementation of investments in priority projects, under the supervision of the Supreme Committee for Energy Mix Affairs.

For its part, the Electricity and Cogeneration Regulatory Authority (ECRA), in coordination with the relevant authorities, will periodically monitor performance indicators for efficiency and service improvement targets, through an approach that is consistent with the best international practices.

“We want to reform this sector and make it more responsive to the future,” the minister underlined.

Prince Abdulaziz bin Salman noted that the target was to achieve competitiveness between all renewable energy projects. He said the role of the Electricity Company in the generation sector would decrease, while competition would be strengthened through renewable energy production and some stations that would depend on gas.

“The majority of electricity production will depend on gas or renewable energy. We have an investment program to produce approximately 50 percent of electricity from renewable energy and the other 50 percent from gas by 2030, with rationalization in the existing stations,” he remarked.



BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
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BP Nears Deals for Oil Fields, Curbs on Gas Flaring in Iraq

British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)
British Prime Minster Keir Starmer (L) welcomes Prime Minister of Iraq Mohammed Shia al-Sudani to 10 Downing Street in London, Britain, 14 January 2025. (EPA)

Iraq and British oil giant BP are set to finalize a deal by early February to develop four oil fields in Kirkuk and curb gas flaring, Iraqi authorities announced Wednesday.

The mega-project in northern Iraq will include plans to recover flared gas to boost the country's electricity production, they said.

Gas flaring refers to the polluting practice of burning off excess gas during oil drilling. It is cheaper than capturing the associated gas.

The Iraqi government and BP signed a new memorandum of understanding in London late Tuesday, as Prime Minister Mohammed Shia al-Sudani and other senior ministers visit Britain to seal various trade and investment deals.

"The objective is to enhance production and achieve optimal targeted rates of oil and gas output," Sudani's office said in a statement.

Iraq's Oil Minister Hayan Abdel Ghani told AFP after the new accord was signed that the project would increase the four oil fields' production to up to 500,000 barrels per day from about 350,000 bpd.

"The agreement commits both parties to sign a contract in the first week of February," he said.

Ghani noted the project will also target gas flaring.

Iraq has the third highest global rate of gas flaring, after Russia and Iran, having flared about 18 billion cubic meters of gas in 2023, according to the World Bank.

The Iraqi government has made eliminating the practice one of its priorities, with plans to curb 80 percent of flared gas by 2026 and to eliminate releases by 2028.

"It's not just a question of investing and increasing oil production... but also gas exploitation. We can no longer tolerate gas flaring, whatever the quantity," Ghani added.

"We need this gas, which Iraq currently imports from neighboring Iran. The government is making serious efforts to put an end to these imports."

Iraq is ultra-dependent on Iranian gas, which covers almost a third of Iraq's energy needs.

However, Teheran regularly cuts off its supply, exacerbating the power shortages that punctuate the daily lives of 45 million Iraqis.

BP is one of the biggest foreign players in Iraq's oil sector, with a history of producing oil in the country dating back to the 1920s when it was still under British mandate.

According to the World Bank, Iraq has 145 billion barrels of proven oil reserves -- among the largest in the world -- amounting to 96 years' worth of production at the current rate.