The chief executive of the world’s largest oil giant said Tuesday that he planned to invest heavily in renewable energy technology, even during a renaissance of fossil fuel production.
Speaking during the opening keynote address of the IHS CERAWeek conference at the Hilton Americas in downtown Houston, Saudi Aramco CEO Khalid Al-Falih said the industry needs to be mindful of looming shockwaves in the industry, even in good times.
Booming oil and gas production from shale and offshore fields have transformed energy outlooks and resulted in massive new investments in oil and gas. But the industry needs to be mindful of changing attitudes, technologies, and the possibility of a disaster that could hurt an unbalanced organization.
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“If our history teaches us anything it is that such rosy forecasts to not always materialize,” Al-Falih said, while speaking to a ballroom filled with hundreds of industry executives.
“Let’s just make sure that we are collectively and individually robust enough to withstand the shocks and black swans that we know are inevitably out there,” he added.
He said Saudi Aramco, which produces about the same amount of oil and gas as Exxon Mobil Corp, Chevron and BP combined, will be increasing its focus on renewable technologies even as governments have exhibited a “reevaluation of the role of renewables and of some environmental initiatives.”
“The age of austerity has seriously affected government support for renewables,” Al-Falih said.
Though the company’s renewable efforts are in their infancy, Al-Falih said that would change.
“As they become more affordable — and they will become more affordable in the long term, I believe — renewables will have an important role to play in the long term and we are committed to invest in their development,” he said.
Still, Saudi Aramco’s oil plans continue to dominate its focus. The company is set to begin production at its gargantuan Manifa offshore oil field, which will begin with production of 500,000 barrels a day and ramp up to an output of 900,000 barrels per day, a production level larger than many countries.
He said the company would also be investing in improving oil and gas production technology.
“Couldn’t we look to double or even triple recovery from unconventionals?” Al-Falih said. “If we do that, we would almost quadruple our reserves from global liquids.”
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Making technological advancements would require changing perceptions of the energy industry among young professionals, in order to better attract talented workers to the field, he said.
“Indeed, many young people see us as a sunset industry,” Al-Falih said. “This is deeply concerning, as well as highly misleading. We need to spark the imaginations of young people.”
That sentiment was echoed by ConocoPhillips CEO Ryan Lance, who spoke after Al-Falih.
He said oil and gas companies are expanding rapidly and becoming very competitive in their efforts to recruit a limited supply of qualified engineers, geologists and other young professionals straight out of college.
“It’s incredibly competitive,” Lance said. “If you can spell shale, you can get a job.”
Though Al-Falih advocated increased support for renewable energy technologies, Lance said governments should not favor one energy resource over another.
“We recommend the government provide a level playing field,” Lance said. “Don’t pick winners and losers.”
Al-Falih also urged the audience to invest in securing their computer networks. He referenced a malware attack on Saudi Aramco’s networks this year, which affected 30,000 computers.
“Never underestimate how dependent you are on your information technology and systems,” he said. “It’s become like oxygen. You think you can live without it but you can’t.”