Saudi Aramco chief says Europe’s energy crisis plans aren’t helping | Energy industry

Saudi Aramco’s chief executive has said European governments’ efforts to tackle the energy crisis are “not helpful”.

Amin Nasser, who leads the world’s largest oil exporter, said plans to cut consumer bills and tax energy companies are not long-term solutions to the global crisis.

Nasser told a forum in Switzerland: “Freezing or limiting energy bills may help consumers in the short term, but it does not address the real causes and is not the long-term solution.

“And taxing companies if you want them to increase production is clearly not helpful.”

The energy crisis that began last year was exacerbated by the Russian invasion of Ukraine, which pushed up oil and gas prices and trickled down consumer and business bills.

Governments in Europe have tried to cushion the blow by spending hundreds of billions of euros on subsidies and tax cuts.

Last week, the EU announced plans to raise around €140 billion (£121 billion) by levying windfall taxes on the “abnormally high profits” of energy companies and funneling revenues to households and businesses struggling with sky-high bills. . In the UK, former Chancellor Rishi Sunak unveiled the levy on energy profits for oil and gas companies in the North Sea in May.

Nasser said the root cause of the crisis was underinvestment in fossil fuels at a time when alternative energy sources were not yet readily available.

He said: “The conflict in Ukraine has certainly amplified the effects of the energy crisis, but it is not the cause. Unfortunately, even if the conflict ended today, as we all want, the crisis would not end.”

Aramco has invested to increase the kingdom’s oil capacity to 13 million barrels per day by 2027, but Nasser said investments in hydrocarbons worldwide were still “too little, too late, too short term.”

The underinvestment comes at a time when spare capacity is scarce and demand is “fairly healthy” despite strong economic headwinds, he added.

Nasser said: “When the global economy recovers, we can expect demand to pick up further, eliminating the small reserve capacity for oil production that exists. That is why I am very concerned.”

Last month, Saudi Aramco underlined the huge profits gas and oil-rich countries have made during the energy crisis by revealing profits by 90% in the three months to the end of June to $48 billion (£40 billion). The figure is considered one of the largest quarterly earnings in company history.

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