Oman strongly positioned in growth of new green energy economy: BP
Recent pledges by the Sultanate of Oman to decarbonise its economy by 2050, alongside the development of a green hydrogen-based industry, bode well for its positioning as a leading player in the emerging global green energy industry, says a top official of energy major bp.
According to Spencer Dale (pictured), bp Chief Economist, Oman also has the requisite wherewithal — in terms of its renewable resources and advantageous geographical location — to not only meet its domestic green hydrogen requirements, but potentially support the needs of the global market as well.
“I think Oman has positioned itself in the forefront of this growth of the new green energy economy; its own commitments to achieve Net Zero by 2050 are exactly in line with best-in-class countries in terms of how quickly they’re trying to reach Net Zero,” said Dale.
The energy giant’s Chief Economist was in Muscat recently — his first in the post-pandemic phase — as part of his regular engagements with countries which bp has “key strategic relationships” with — Oman being a notable example.
bp operates the Block 61 gas field in central Oman, which currently produces 1.5 billion cubic feet of gas per day, which equates to roughly a third of the country’s total gas output. bp has also signed a pair of initial agreements with the Omani government to support the potential development of a multiple gigawatt, world-class renewable energy and green hydrogen development by 2030.
“bp has been actively operating in Oman for about 15 years from 2007; It’s been an incredibly successful relationship for both sides,” said Dale. “bp has the capacity to deliver a third of Oman’s natural gas, which is an incredible achievement. And I think we could develop this further in terms of helping Oman develop its hydrogen economy. That would be very exciting!”
According to the industry executive, government demand for low carbon hydrogen — either blue or green — is likely to increase very substantially over the next 10 – 15 years. This bodes well for Oman, which is blessed with “incredible” solar and wind resources, he noted. Speaking to the Dale also shared bp’s perspective on the global energy outlook.
“We see a significant demand for oil and gas for a long time to come, and in terms of helping the energy transition, I don’t think we expect demand for oil and gas to fall away very sharply,” he said. In the near-term however, the world is expected to see a strong uptick in demand for LNG, particularly as countries with coal-based power plants transition away from coal, he said.
“So I think we will see significant roles still for oil and gas — for Oman as well as for the world generally. Oman is in a good position to help out. It has plenty of supplies of natural gas at very competitive prices.”
Importantly, green hydrogen is set to play a significant role in the global energy outlook, he said. “I think hydrogen is a necessary part of the world decarbonising to 2050.
When you look around the world looking for the most advantageous parts of the world in terms of green hydrogen, Oman starts in a good position in terms of the resources it has. It’s now for Oman to think about how best to develop its green hydrogen industry and to attract investors. Hydrogen should also be used in a way which is most beneficial for the economy as a whole, generating jobs and prosperity for the economy for the next 10, 20, 30 years.”
Commenting on the global energy situation, Dale warned that world energy markets are currently going through a “huge period of volatility and uncertainty”.
“There are significant shortages, particularly in natural gas in Europe, and as result, we’re seeing very tight gas markets. There’s also a near term issue in terms of how long that will last Besides, there are significant uncertainties about the impact energy crisis on Europe’s winter.
But as a result of the Russian War — I think there’s an increased focus around the world on energy security with countries wanting to ensure that they are resilient and have security of energy supplies.”