The world’s largest oil producer has stepped up to defend China against Western criticism that it dumps solar panels and electric vehicles at rock-bottom prices.
According to the Financial Times (FT), Amin Nasser, CEO of Aramco, said at the World Energy Congress (WEC) held in Rotterdam, Netherlands, on the 22nd (local time), “China has greatly helped bring down the cost of solar energy,” adding, “A lot of what has happened in the solar panel market is thanks to China’s price cut.” He also stated, “China’s electric vehicles are also at the level of 30~50% of other electric vehicles,” and “Globalization and cooperation are needed to achieve the energy goal by 2050.”
Saudi Aramco is putting efforts into work with China as the West attempts to transition from oil energy to eco-friendly energy. China is the largest market for Saudi crude oil. Aramco announced a series of partnerships with large Chinese petrochemical producers on the day. In particular, it announced plans to acquire a 10% stake in Hengli Petrochemical, a major Chinese plastic chemical producer. This move brings Aramco one step closer to its goal of converting 4 million barrels per day of petrochemicals, equivalent to about 40% of its current crude oil production, into petrochemicals by 2035. An Aramco executive expressed excitement about expanding their position in the Chinese market. Last year, Aramco acquired a 10% stake in the listed company Rongsheng Petrochemical for $3.6 billion and joined a venture to build a refinery and petrochemical complex with two other Chinese companies.
Nasser also said that Western countries are misjudging the future energy consumption of developing countries when setting climate goals. He stated, “Many Western policymakers have no understanding of how the energy transition will take place,” and “Currently, oil and gas are consumed 40% in the global northern hemisphere and 60% in the southern hemisphere, but by 2050, 80% will be consumed in the south.” This means that southern countries will drive growth.
In this context, Aramco said it plans to achieve net-zero carbon by 2050 but does not plan to reduce oil and gas production. “Aramco will invest more in cleaner forms of energy,” Nasser said, but he acknowledged that it will not be easy. “We plan to bring hydrogen to the market to help with the energy transition,” he said, but admitted that “we need contracts for 15 to 20 years (for stable energy supply), and it’s difficult to get those contracts at the prices we proposed ($200 to $400 per barrel).”
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