By Syed Shukur Ali

CALGARY, Canada, Sept 20, 2023 (BSS) - The energy transition requires investment in renewable molecules as well as renewable power, as electrification will not achieve full decarbonisation, said head of Spanish company Repsol Josu Jon Imaz.

"While Repsol is transforming from a conventional oil producer into a multi-energy company, ramping up its renewable portfolio and low-carbon businesses other than fossil fuels, it will maintain a core focus on molecules, through investments in renewable fuels," he said at the panel discussion at the 24th World Petroleum Congress (WPC) here on Tuesday.

The Repsol chief executive officer (CEO) told the panel, "People say decarbonising means electrifying, and that's not true."

According to Mohamed A Al-Brahim, assistant to the minister of energy of Saudi Arabia, demand for refined products globally will be higher in 2023 than it was in 2020, before the pandemic.

Growth in the sector is expected to continue in the medium term, with demand for petroleum-based chemicals, in particular, forecast to increase by up to 60 percent in the coming decade and beyond, he said.

To meet the growth in demand, Al-Brahim said that some 5 million barrels per day of new refining capacity is slated to be installed globally, the majority of which will be located in the Middle East, China and India.

"This capacity will be required in the future," he said, speaking about an "increasing integration between refineries and chemicals [businesses]".

At the same time, the new capacity in the Middle East and Asia will represent a headwind for Europe-based refineries, said Juan Abascal, executive director of Industrial Transformation and Circular Economy at Spain's Repsol.

"Our ability to reduce the breakeven is crucial to ensure we can continue to produce at the European refineries," he said.

Abascal noted that European facilities have to optimise their processes to drive down fixed costs, in order to "stand a chance" against new competition from Asia.

"In a 10- to 15-year perspective, European companies have to look at that [source of competition] and do all that's possible to optimise and slice their costs progressively, to remain competitive," Abascal said.

The meeting was informed that Australian independent Melbana Energy in partnership with Angola state-owned company Sonangol has successfully unlocked oil in Block 9 with the Alameda-1 and Alameda-2 wells.

Energy ministers of Alberta, Saskatchewan and Newfoundland and Labrador said that provincial governments in Canada's oil and gas regions are fully supportive of the growth of their hydrocarbon sectors, while leveraging their decades of oil and gas expertise to develop carbon capture and new energies.

Canada is one of the largest oil and gas producers in the world. The Canadian Association of Petroleum Producers estimates that in 2022, the production was about 4.6 million barrels per day of oil and 17 billion cubic feet per day of gas.

Minister of Industry, Energy and Technology, Andrew Parsons said growth in Canada's offshore exploration and production is fully supported by the Newfoundland and Labrador provincial government.

The province hosts four large producing offshore fields - Hibernia and Hebron, both operated by ExxonMobil; Terra Nova, operated by Suncor Energy; and the White Rose field, operated by Cenovus Energy.