Saudi Aramco CEO ‘Fairly Bullish’ on China Oil Demand

 Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
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Saudi Aramco CEO ‘Fairly Bullish’ on China Oil Demand

 Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)
Saudi Aramco CEO Amin Nasser speaks at the Singapore International Energy Week (SIEW), Singapore October 21, 2024. (Reuters)

Saudi Aramco is "fairly bullish" on China's oil demand especially in light of the government's stimulus package which aims to boost growth, the head of the state-owned oil giant said on Monday.

"We see more demand for jet fuel and naphtha especially for liquid-to-chemical projects," Aramco CEO Amin Nasser said on the sidelines of the Singapore International Energy Week conference.

"A lot of it is happening in China mainly because of the growth in chemical needs. Especially for the transition, for the electric vehicles, for the solar panels, they need more chemicals. So that's huge growth there," Nasser said.

Meanwhile, progress in the energy transition in Asia is far slower, much less equitable and more complicated than many have expected, he told the conference, calling for a reset in policies for developing countries.

Even with the transition, as economies expand and living standards rise, the Global South is likely to see significant growth in oil demand for a long time, and while that growth will stop at some point, that is likely to be followed by a long plateau, Nasser said.

"If so, more than 100 million barrels per day would realistically still be required by 2050," he said in a speech at the Singapore International Energy Week conference.

"This is a stark contrast with those predicting that oil will, or must, fall to just 25 million barrels per day by then. Being short 75 million barrels every day would be devastating for energy security and affordability."

Countries should choose an energy mix that helps them meet their climate ambitions at a speed and manner that is right for them, Nasser said. "Our main focus should be on the levers available now."

These include encouraging investments in oil and gas that developing nations need and can afford, and prioritizing the reduction of carbon emissions associated with conventional sources by improving energy efficiency and developing carbon capture, utilization and storage (CCUS).

Despite trillions of dollars being invested in the global energy transition, oil and coal demand are at all-time highs, dealing a "hammer blow" to energy transition plans, he said.

Asia, which consumes over half of the world's energy supplies, still relies on conventional resources for 84% of its energy needs. Rather than displacing demand for conventional energy, alternatives are mostly meeting consumption growth, he said.

The shift to electric vehicles (EV) in Asia, Africa and Latin America is lagging that of China, the US and European Union as consumers struggle with affordability and infrastructure concerns, he said.

The progress of EVs has no bearing on the other 75% of global oil demand, Nasser said, as massive segments like heavy transportation and petrochemicals have few economically viable alternatives to oil and gas.

Developing countries may require almost $6 trillion each year to fund the energy transition, and Nasser called for them to have a greater say in climate policy-making.

"But Asia’s voice and priorities, like those of the broader Global South, are hard to see in current transition planning, and the whole world is feeling the consequences."



Saudi PIF Invests in Workers' Housing to Meet Demands of Megaprojects

Housing complexes for workers affiliated with the Royal Commission in Yanbu (SPA)
Housing complexes for workers affiliated with the Royal Commission in Yanbu (SPA)
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Saudi PIF Invests in Workers' Housing to Meet Demands of Megaprojects

Housing complexes for workers affiliated with the Royal Commission in Yanbu (SPA)
Housing complexes for workers affiliated with the Royal Commission in Yanbu (SPA)

The Public Investment Fund (PIF) has announced plans to invest in workers’ housing and develop more residential complexes for laborers involved in Saudi Arabia’s major construction and development projects. Experts say this move will increase the supply of housing solutions, especially in light of upcoming global events such as Expo 2030 and the 2034 FIFA World Cup, as well as the ongoing megaprojects in the Kingdom.
The PIF has launched the Smart Accommodation for Residential Complexes Co. (SARCC), a company focused on the development and operation of residential complexes for workers across key construction and development projects in the country. SARCC aims to meet the growing demand for worker housing solutions and provide services for both public and private projects nationwide.
Real estate experts believe this new company will help ease pressure on family housing by creating additional housing options for workers. This is expected to boost the overall supply of housing and, in turn, help reduce prices and contribute to the goal of increasing the homeownership rate for Saudi families to 70% by 2030.
Khaled Al-Mobid, CEO of Menassat Real Estate, highlighted that one of the biggest challenges for the Kingdom’s development is the rising demand for labor due to the ongoing megaprojects. He pointed out that these workers need suitable housing, but the market currently suffers from a shortage of available options, many of which are not suitable for workers.
Al-Mobid noted that the PIF’s decision to launch a real estate development company focused on worker housing is a timely and beneficial step that will address the issue of workers living in inadequate areas.
Ahmed Omar Basodan, another expert in real estate, said that establishing SARCC aligns with the scale of the ongoing megaprojects and upcoming global events like Expo 2030 and the 2034 FIFA World Cup, which will require a massive workforce. Basodan emphasized that the new company will help move workers out of family housing and into specialized residential complexes, increasing the supply of housing and supporting the goal of 70% homeownership by 2030.
He further noted that the PIF has already launched companies in the real estate sector, such as Roshn Group, Saudi Downtown Company, and New Murabba Development Company, recognizing the significant opportunities within Saudi Arabia’s real estate market.
According to the PIF’s statement, SARCC will play a key role in developing the housing sector by investing in and managing worker housing complexes. It will also enhance housing standards for workers by developing and operating projects that meet international standards set by the European Bank for Reconstruction and Development and the International Finance Corporation, which is part of the World Bank.