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1 04/05/2023


The oil and gas industry worldwide is facing growing challenges that started at the beginning of the twenty-first century and intensified after the signing of the Paris Climate Change Agreement, which calls for a shift from fossil fuels to carbon-free energy by 2050. These challenges have led many investors to rethink taking any further steps and hindered them from moving forward in developing oil and gas projects, which will have serious repercussions on energy security in the future, according to the expectations of many specialized research centers.

In view of the ambiguity surrounding many of the issues of transition to a low-carbon energy system, such as those related to the development of future demand for petroleum products, and the legislative frameworks that governments will issue, it is certain that oil and gas will remain the most widely secure source among all other types of energy for many decades to come, and this transition, from our point of view, should be fair, smooth, and gradual.

 In the past few years, many countries around the world announced programs to convert its oil refineries into low-carbon refineries, and implement CCUS technologies. Most of these programs were concentrated in Western Europe and North America.

As for OAPEC member countries, the oil refining industry has witnessed in the past decade the execution of pioneering projects aimed at producing high-quality products with specifications compatible with the latest international standards, through the construction of advanced refineries such as the "Jazan" refinery in the Kingdom of Saudi Arabia with a refining capacity of 400 thousand b/d; the Karbala refinery in the Republic of Iraq with a capacity of 140 thousand b/d; and the clean fuel project in the State of Kuwait, which includes developing the existing “Mina Al Ahmadi” and “Mina Abdullah” refineries and constructing the new Al Zour refinery with a refining capacity of 615 thousand b/d, to replace the “Mina Al Shuaiba” refinery that was permanently closed due to its age. This is in addition to revamping and upgrading projects of existing refineries in many member countries, with the aim of improving their flexibility to process heavy and various types of crude oil, adjusting their products structure in line with future forecasts on changing demand in global oil markets, such as the project to develop the "Ruwais" refinery in the UAE, the Sitra refinery in the Kingdom of Bahrain, and the Middle East refinery, MIDOR, in the Arab Republic of Egypt.

These developments came along with the announcement of national strategic plans to cut carbon emissions in line with the international trend towards decarbonization and transition to the use of clean energy. At the forefront of these initiatives are the two initiatives launched by the Kingdom of Saudi Arabia in October 2021, namely the “Saudi Green Initiative” and the “Green Middle East Initiative”, to reach net-zero emissions by 2060, with investments amounting to about $187 billion, aiming at raising the percentage of electricity generated from renewable sources in the Kingdom from 1% to 30%. This is in addition to expanding the production of green and blue hydrogen and blue ammonia, and the installing of carbon capture and storage units.

It is also worth noting that the UAE has announced investing billions of dollars in projects to boost the production of renewable energy; maximizing energy efficiency in all energy-consuming sectors, including oil refineries; expand the production of green hydrogen, which is a natural source for low-carbon energy, and implement carbon capture and storage technology.

OAPEC Secretariat General, while constantly following up these developments, spares no effort in supporting these initiatives by publishing specialized studies and reports, holding conferences, seminars and coordination meetings in which industry experts exchange their experiences, expertise and strategic plans that would enable them to improve the performance of the oil industry to the aspired standards, and to maximize its competitiveness in international markets.