Majority of energy executives expect world to reach net-zero by 2060

In February, CEO of Saudi Aramco, Amin Nasser, said the company is eyeing continuity in the production of all types of energy including oil and gas, along with renewables. (File)
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Updated 30 March 2024
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Majority of energy executives expect world to reach net-zero by 2060

  • This view is most strongly held among oil and gas business leaders, survey by Bain & Co. shows

RIYADH: Around 62 percent of executives in the energy sector expect the world to reach net-zero emissions by 2060 or later, a study showed.

The survey, carried out by management consulting firm Bain & Co., revealed that this view is consistent across most regions and is most strongly held among oil and gas business leaders. 

“Despite ENR (energy and natural resources) companies’ continued investments in decarbonization, about 62 percent of executives now anticipate the world will reach net-zero by 2060 or later, up from 54 percent in last year’s survey,” said Bain & Co. 

Most of the participants in the survey pointed out the financial viability of energy transition projects as a major concern.  

According to these ENR executives, the greatest obstacle to scaling up their transition-oriented businesses is finding enough customers willing to pay higher prices to create sufficient return on investment.  

“Energy transition looks slower as it becomes even more difficult to ensure adequate investment returns and progress diverges across a fragmenting world,” said the report.  

It added: “In our view, the direct impact of higher interest rates on the cost of transition projects is one of the most important stories of 2023 and is likely shaping executives’ perspective on this issue.”   

The survey also indicated that taxes and carbon pricing, along with government subsidies, are the top levers which will influence customer behavior. 

Middle East executives confident about energy transition-related businesses

The report highlighted that executives in the Middle East, Asia-Pacific, and Latin America are feeling more optimistic about the prospects of their transition-oriented growth businesses.  

The survey results also revealed that ENR officials in these regions believe transition-related businesses will bring positive impacts to their company’s valuation and profits by 2030.  

Speaking to Arab News, Paul Sullivan, non-resident senior fellow of the Global Energy Center at the Atlantic Council also shared similar views and noted that countries in the Middle East have all the potential to spearhead the transition journey.  

“GCC countries may in the end be more successful at some transitions because they need the transitions to help economic diversification and economic diplomacy. And mostly they can pay for the energy transition with their oil and gas revenues. Without those revenues, it would be near impossible to do this,” said Sullivan.  

In February, Saudi Aramco CEO Amin Nasser said the company is eyeing continuity in the production of all types of energy including oil and gas, along with renewables. 

Two months earlier, Nasser said the amount of renewable energy coming to the international market falls short of fulfilling the rising demand. 

He said more investments are needed in the oil and gas sector to ensure a smooth energy transition. 

The Bain & Co. report said energy executives consider North America as the most attractive region for transition-related investments, but the stability of government policies remains a concern.  

According to the report, over 70 percent of the executives worldwide who took part in the survey revealed that reducing policy uncertainty would very significantly improve their ability to scale up transition-oriented businesses. 

“Many of the programs started by governments in the recent past and present may not survive the political changes that could be coming. Many governments are listening to their voters and are already backing down from some energy transition measures,” added Sullivan.

Jiyas Jamal, an Indian lawyer who is also a climate activist, shared similar views, and said energy transition is happening slower, but countries all across the globe have started taking the climate issue seriously.  

“I do agree that energy transition is happening slowly. However, there is a growing awareness all over the world regarding the issue of climate change. Even though financial viability is a major concern among ENR companies, the trend is reversing now, and several big names in the sector, especially in the Middle East region are seriously investing in renewable projects,” Jamal told Arab News.

The impact of AI on energy transition 

The report said advanced technologies, such as artificial intelligence, have a crucial role to play as the world sails toward a sustainable future.  

According to the survey, the share of ENR executives who believe AI and digital processes will have a significant effect on their businesses by 2030 increased from 56 percent in 2023 to 65 percent in 2024. 

BACKGROUND

• Most of the participants in the survey pointed out the financial viability of energy transition projects as a major concern.

• According to these ENR executives, the greatest obstacle to scaling up their transition-oriented businesses is finding enough customers willing to pay higher prices to create sufficient return on investment.

• The Bain & Co. report said energy executives consider North America as the most attractive region for transition-related investments.

Improving maintenance, production, and the supply chain are currently among the most promising generative AI applications across ENR sectors, the report added.  

However, executives are skeptical that generative AI will play a significant role in reducing emissions due to its significant energy requirements. 

“AI could be an increasingly bigger part of the transition in many countries and across countries. But AI is a big consumer of energy. This energy consumption needs to be considered as a factor in the energy transition and for climate and environmental issues in the future,” said Sullivan.  

He added: “No energy is clean over its supply chains and life cycles. No energy is free — contrary to some of the ‘renewables’ salespersons. No energy is truly renewable when the technologies reach their lifetimes and need to be decommissioned. So, even the concept of renewable is up to question and is more of a continuum than an absolute.” 

Energy transition: the funding dilemma 

Talking about the energy transition progress in the global north and south, Sullivan said funding is an issue for all countries.  

He opined that richer countries have more capital that can be put into the transition efforts, but they are excessively relying on tax breaks and subsidies.

“Developed countries have built up massive public debts and yet many feel free to spend tens of billions of mostly borrowed money increasing their debt to go forward with the energy transition. This is not sustainable at all,” noted Sullivan.

He added: “Many leaders in the poorer parts of the world do not have climate as a top issue and the energy transition is very expensive. For poorer and less developed countries, they have many other more pressing problems to deal with, such as poverty, education, health, and other crushing economic and political issues.”  

For his part, Jamal concluded that energy transition is one of the crucial agendas the world is facing, and it should be achieved effectively, even though a little delay happens in the process.  

“The world is facing the heat of climate change. All the countries should try to achieve their net-zero targets for our future generations. Developed nations should continue lending their helping hand to the least developed, as this is an issue which can be addressed with cooperation,” he said.


Saudi Aramco lowers July oil prices for Asian markets

Updated 04 June 2025
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Saudi Aramco lowers July oil prices for Asian markets

RIYADH: Saudi Aramco has slashed its official selling price for crude oil destined for Asia in July, the company confirmed in an official statement on Wednesday.

The state-owned oil giant cut the price of its benchmark Arab Light crude by $0.20, setting it at $1.20 per barrel above the average of Oman and Dubai crude prices.

Saudi Aramco prices its crude oil across five density-based grades: Super Light (greater than 40), Arab Extra Light (36-40), Arab Light (32-36), Arab Medium (29-32), and Arab Heavy (below 29).

The company’s monthly pricing decisions impact the cost of around 9 million barrels per day of crude exported to Asia and serve as a pricing benchmark for other major regional producers, including Iran, Kuwait, and Iraq.

In the North American market, Aramco set the July OSP for Arab Light at $3.50 per barrel above the Argus Sour Crude Index.

Aramco determines its OSPs based on market feedback from refiners and an evaluation of crude oil value changes over the past month, taking into account yields and product prices.

Plans by OPEC+ producers to increase output by 411,000 barrels per day in July are also weighing on the market.

Yet, there was some support as wildfires reduced Canada’s production by some 344,000 bpd, according to Reuters calculations.

 


PIF-backed Lucid inks graphite supply deal to bolster US EV battery material sourcing

Updated 04 June 2025
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PIF-backed Lucid inks graphite supply deal to bolster US EV battery material sourcing

RIYADH: Lucid Group, the electric vehicle manufacturer backed by Saudi Arabia’s Public Investment Fund, has signed a multiyear supply agreement with Graphite One to source natural graphite from the US.

The move is aimed at reinforcing the company’s domestic supply chain for battery production. The agreement aligns with Lucid’s broader strategy to secure critical raw materials domestically.

It follows similar deals with Graphite One and Syrah Resources as the company ramps up efforts to localize its EV production ecosystem.

According to the terms, the graphite will be supplied through Lucid’s battery cell partners for use in upcoming vehicle models.

Lucid is majority-owned by PIF, which holds a 60 percent stake, amounting to 1.77 billion shares. The partnership underscores the sovereign fund’s long-term commitment to advancing electric mobility as part of Saudi Arabia’s Vision 2030.

In September 2023, Lucid opened its first international manufacturing facility in King Abdullah Economic City. The plant currently produces 5,000 vehicles per year, with plans to scale up to 155,000 units annually. The expansion is expected to support Saudi Arabia’s ambitions to diversify its economy and become a regional hub for electric vehicle manufacturing.

“A supply chain of critical materials within the United States drives our nation’s economy, increases our independence against outside factors or market dynamics, and supports our efforts to reduce the carbon footprint of our vehicles,” said Marc Winterhoff, interim CEO at Lucid.

Under the latest deal, Lucid and its battery suppliers will begin receiving natural graphite from Graphite Creek, a deposit located near Nome, Alaska, starting in 2028. This builds on a prior agreement signed in 2024, in which Graphite One will provide synthetic graphite from its proposed anode materials facility in Warren, Ohio — also set to begin production in 2028.

“This agreement complements the deal we struck with Lucid in 2024 — which marked the first synthetic graphite agreement between a US graphite developer and a US EV company,” said Anthony Huston, CEO of Graphite One.

He added: “We made history then — and we’re continuing to make history now as we build momentum for our efforts to develop a fully domestic graphite supply chain, to meet market demands and strengthen US industry and national defense.”

Lucid is also expected to receive natural graphite active anode material from Syrah Resources starting in 2026, as part of its ongoing diversification of supply sources.

In a further boost to its financial position, Lucid closed a $1.1 billion offering of convertible senior notes in April, due in 2030. The announcement came shortly after the company reported first-quarter deliveries of 3,109 vehicles — a 58 percent increase year on year.


Closing Bell: Saudi main index closes in green before Eid holidays 

Updated 04 June 2025
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Closing Bell: Saudi main index closes in green before Eid holidays 

RIYADH: Saudi Arabia’s Tadawul All Share Index climbed on Wednesday, gaining 172.1 points, or 1.59 percent, to close at 11,004.53. 

The total trading turnover on the benchmark index was SR4.61 billion ($1.23 billion), with 191 listed stocks advancing and 50 declining.

The Kingdom’s parallel market Nomu surged by 257.9 points to close at 27,307.74. 

Meanwhile, the MSCI Tadawul Index edged up by 1.67 percent to 1,406.49.  

The best-performing stock on the main market was Saudi Industrial Investment Group, with its share price surging 7.03 percent to SR17.36. 

The share price of ACWA Power Co. also rose by 6.72 percent to SR269.80.  

Al-Babtain Power and Telecommunication Co. saw its stock price increase by 5.40 percent to SR5.40. 

Conversely, the share price of Saudi Steel Pipe Co. fell by 6.33 percent to SR56.20. 

Saudi Research and Media Group also saw a dip, with its share price easing 2.26 percent to SR127. 

On the announcements front, Saudi National Bank completed its offer of Saudi riyal-denominated Additional Tier 1 sukuk, with the settlement finalized on June 3. 

According to a statement on the Saudi Exchange dated May 11, the issuance was conducted through a private offer to eligible investors in the Kingdom. The total value of the sukuk offering amounted to SR1.73 billion. 

The bank issued 1,730 sukuk, each with a par value of SR1 million. The sukuk will offer an annual return of 6 percent from the issue date until June 3, 2030. 

The share price of Saudi National Bank increased by 0.88 percent to close at SR34.45. 

The announcement coincided with the implementation of the unified regulation for cross-border registration of investment funds among Gulf Cooperation Council countries, which came into effect in 2025, according to the Capital Market Authority. 

The regulation outlines requirements for registering and marketing investment funds across GCC countries and introduces a dedicated regulatory guide. 

It aims to clarify procedures for handling both local and Gulf-based funds, enhance financial market services, and reduce regulatory challenges. 

Additionally, the framework seeks to support mechanisms that attract international investments to the Saudi financial market and boost foreign ownership in investment funds. 

The broader goal is to improve liquidity in regional financial markets, enhance the competitiveness of GCC economies, and foster integration by unifying the policies and systems governing domestic, regional, and foreign investment activities. 

The regulation also aims to ensure a transparent and stable investment environment. 

Under the framework, the legislative committee in each host country will have the authority to set standards for approving fund registrations and supervising funds within its jurisdiction, including overseeing the appointed agent and their interactions with investors. 

Cross-border registration must be conducted through the capital market authorities of both the fund’s country of origin and the host country. 

The regulation allows investment funds established in any GCC member state to be promoted in other countries applying the framework. 

It also outlines the process for offering Saudi funds in Gulf markets, with a focus on aligning with regulatory review mechanisms and cross-border registration requirements to ensure full compliance with approved guidelines. 


Saudi POS spending hits $4bn pre-Adha, fueled by increased spending across all sectors 

Updated 04 June 2025
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Saudi POS spending hits $4bn pre-Adha, fueled by increased spending across all sectors 

RIYADH: Saudi Arabia’s point-of-sale transactions climbed 33 percent to SR15.5 billion ($4.15 billion) in the week preceding Eid Al-Adha, driven by increased spending across all sectors. 

The latest data from the Saudi Central Bank, also known as SAMA, showed that the clothing and footwear sector led the growth seen in the week ending May 31, registering the largest jump in transaction value, up 72.7 percent to SR1.2 billion. 

The sector also saw a 61.6 percent rise in the number of transactions, reaching 8.6 million. 

The education sector followed, recording a 61.6 percent increase in transaction value to SR242.1 million. Telecommunication spending ranked next, rising 44.5 percent to SR136.2 million, with transactions up 19.9 percent to 2.1 million. 

Food and beverages — the sector with the biggest share of total POS value — recorded a 34.2 percent increase to SR2.2 billion. 

Transportation spending rose 29.7 percent to SR898.8 million, while restaurants and cafes saw a 24.3 percent increase, totaling SR2 billion and claiming the second-biggest share of this week’s POS. 

The smallest spending gains were in hotels, rising by 9 percent to SR207.5 million, and construction and building materials, which increased by 12.9 percent to SR267.6 million. 

Health outlays rose by 28.4 percent to reach SR952.8 million, while the public utilities sector increased by 29.1 percent to SR55.3 million. 

Spending on electronics followed the trend, rising 23.1 percent to SR187.2 million, and recreation and culture edged up 42.5 percent to SR324.3 million. 

Miscellaneous goods and services claimed the third-largest share of total transactions value, with an uptick of 34.4 percent to SR1.9 billion. 

The top three categories — food and beverages, miscellaneous goods and services, and clothing and footwear — accounted for 39.9 percent of the week’s total spending, amounting to SR6.2 billion. 

Geographically, Riyadh dominated POS transaction value, with expenses in the capital reaching SR5.4 billion, a 42.7 percent increase from the previous week. 

Jeddah followed with a 27.7 percent rise to SR2.1 billion, while Dammam ranked third, up 25.1 percent to SR776.5 million. 

Hail saw the biggest weekly increase in transaction value, inching up 52.6 percent to SR262.6 million, followed by Tabuk with a 51.3 percent uptick to SR323.6 million. 

Hail recorded 4.3 million deals in transaction volume, up 24.7 percent, while Tabuk reached 5.2 million transactions, rising 21.1 percent. 


Hong Kong-based Gaw Capital plans to step up Middle East investments

Updated 04 June 2025
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Hong Kong-based Gaw Capital plans to step up Middle East investments

  • Gaw Capital targets UAE, Saudi Arabia for investments
  • Firm plans separate investment vehicle for Middle East

HONG KONG: Gaw Capital plans to bolster investments in the Middle East, its top executive said, as the Hong Kong-based multi-asset investment manager looks to tap into the post-COVID boom in the region’s real estate and other industrial sectors.

Christina Gaw, Gaw’s managing principal and global head of capital markets, said the firm is looking at real estate and other businesses in the UAE and Saudi Arabia as their population has a large demand for real assets.

Gaw acquired a residential building in Abu Dhabi in May for more than $150 million, and signed a pact in November with Expo City Dubai and Lingang Group to explore creating the Expo Life Science Park in Dubai.

The firm, which had $34.4 billion of assets under management as of the end of 2024, expects to close another deal in the region in the second half of the year, said Gaw, whose two elder brothers founded the company in 2005.

Gaw’s interest in the Middle East comes against the backdrop of a post-pandemic property boom there, fueled by business demand and foreign investment.

“(The Middle East) is very wealthy, what can you bring to them? It’s the expertise ... they want to attract talents and different businesses,” Gaw said in an interview. “And we have tenants and business who want to expand there, so we act as a bridge ... to provide them funding and local connections.”

The firm plans to set up a separate vehicle to build an investment track record in the Middle East first before using its main funds in the future.

Gaw, whose main focus has been Greater China and in recent years in Japan and Australia, is also raising a $2 billion fund for private equity and private credit opportunities in Asia Pacific.

The fund is receiving interest from Middle Eastern and Asian investors, as well as in North America, who are looking to diversify amid changing geopolitics.

“Currently the US has many uncertainties. Investors who have been overweighting the US and have done well for many years now may say, ‘I need a little level play’,” Gaw said.

“Asia, on the other hand, has underperformed in the past five years, creating relative value, and people feel they need a repositioning and add some positions in Asia.”

Besides the Middle East, Gaw this year also made investments including more than $1 billion in the Tokyu Plaza Ginza mall in Tokyo with a joint venture partner, and a 45 percent stake in Agility Asset Advisers, a real estate manager in Japan.

In its home market, Gaw said that the firm was focusing on a private credit business linked to upper-middle class residential projects, and was in talks with developers with liquidity needs as well as banks that are selling their non-performing loans.