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Observer
7 days ago
- Business
- Observer
Private sector must absorb premiums to accelerate energy transition
MUSCAT: The global energy transition will not succeed without private-sector willingness to absorb cost premiums, build scalable models and push investment despite current regulatory uncertainties, according to Salih Merghani, Executive Vice President for Energy at Olayan Saudi Holding Company. Speaking at the Oman Petroleum & Energy Show (OPES) held in Muscat recently, Merghani said that unlike previous shifts in industrial history, today's energy transition demands that companies move away from 'dense, cheap and reliable' fossil fuels to energy sources that are intermittent, complex and often more expensive. 'This is unlike anything we've attempted before. We're transitioning not because the alternatives are more efficient, but because of an environmental imperative. That makes the economics more challenging — and more urgent,' he said. Merghani noted that although Saudi Arabia and the region offer competitively priced energy, the lack of a comprehensive regulatory framework for decarbonisation is slowing momentum. As a result, private investors must take the lead in developing new mechanisms for green investment. 'In our case, we asked ourselves: why move now? The answer was scalability. The scale exists, the market is forming and our capital has to find a home where it contributes to the long-term shift,' he said. He cited examples of private investment by Olayan into carbon capture and storage (CCS) technologies and industrial retrofits aimed at reducing emissions in sectors like steel, cement and heavy industry. 'We looked at steel production, for example. Instead of building a new 'green steel' facility from scratch, we worked on retrofitting existing operations to lower their emissions profile significantly,' he explained. However, he stressed that many low-carbon technologies will not scale without 'offtake guarantees' and financial structures that share the risk across the value chain. 'We realised that if we wanted to accelerate deployment, someone had to accept the premium — whether in the form of higher offtake prices, long-term contracts, or industrial policy support,' he said. Merghani also highlighted the role of voluntary carbon markets (VCMs), noting that investments under Saudi Arabia's VCM initiative have focused on creating credible carbon credits and building awareness within the private sector. 'We don't yet have taxes or binding emissions caps, but the idea is to integrate carbon into business decision-making through the market. The VCM gives us a way to do that,' he said. On technology maturity, he pointed out that while solar energy has now reached global scale, other solutions — particularly CCS and sustainable aviation fuels (SAF) — still face barriers. 'We've made strong progress in solar, but CCS and SAF require different economic models. For SAF, the aviation sector may be the last to transition and retrofits must become financially viable at today's cost structures,' he said. Merghani called for greater collaboration between industrial players, regulators and financiers to unlock the full potential of emerging technologies. 'Financing institutions must be part of the solution. We can't build a project pipeline if the banks and regulators aren't aligned with the pace of transition,' he noted. He concluded by stressing that while the private sector is ready to lead, market signals and policy coordination must follow if the region is to move from pilot projects to full-scale decarbonisation. 'The technology is here, the investment appetite is real — but if we want this to happen fast, it has to be a shared effort. This transition won't happen under normal conditions. We need to rewire the whole ecosystem,' he said.
Observer
20-05-2025
- Business
- Observer
Energy shift must balance business, climate
MUSCAT, MAY 20 The energy transition must strike a pragmatic balance between climate ambitions and business sustainability, said Emry Hisham Yusoff, Senior General Manager of the Carbon Management Division, Upstream at Malaysia's Petronas. Speaking at a panel session during the Oman Petroleum & Energy Show (OPES), Yusoff addressed growing concerns among industry stakeholders about the economic viability of decarbonisation pathways, especially in the context of carbon capture and storage (CCS) and other capital-intensive interventions. 'Yes, there is pressure in investor and stakeholder meetings,' he acknowledged. 'But we must ensure that alignment remains between long-term climate targets and the realities of running viable energy businesses.' Yusoff noted that natural gas continues to play a critical role in Malaysia's energy mix, not just as a transition fuel but also as a core product in global markets. 'Gas demand is still growing—especially in Asia. We continue to see interest in LNG and related projects. It's not about stopping activity, but about transforming it responsibly.' On CCS, Yusoff was cautious but optimistic. 'In places like the US, where the government supports CCS through incentives such as the Inflation Reduction Act (IRA), projects are moving. But for us in Southeast Asia, the economics are different. The CO₂ concentration in our emissions streams is often below 4%, which makes capture much more energy- and cost-intensive,' he explained. He added that Petronas is now reassessing how best to approach energy efficiency and emissions reduction. 'We are working to reduce our own energy use and emissions intensity across upstream operations. But we also need to consider whether investments are achieving meaningful impact or just adding operational complexity.' Yusoff emphasised that energy transition strategies must be tailored to regional and operational contexts. 'This is not a copy-paste exercise. We must understand what works locally and where we need to refocus efforts.'
Muscat Daily
18-05-2025
- Business
- Muscat Daily
Abraj concludes high-impact participation at OPES & OSW 2025
Major contracts, award recognition, and strategic engagements underscore industry leadership Muscat – Abraj Energy Services, Oman's leading provider of oil and gas services, concluded a high-impact presence at the 13th Oman Petroleum & Energy Show (OPES) and Oman Sustainability Week (OSW) 2025. As an Official Sponsor, Abraj reinforced its market leadership through operational achievements, sustainability leadership, and strategic stakeholder engagement. During the event, Abraj signed two significant contracts that reflect its expanding local footprint and trusted operational capabilities. These included a drilling unit agreement with bp Oman for Block 61, a rig services contract with ARA Petroleum for Block 44, and the signing of a new contract for a third 3000 HP rig at the WJO field in Kuwait—a major milestone in Abraj's international expansion strategy and a testament to its growing presence in key regional markets. 'This year's participation reflects our unwavering commitment to performance, partnership, and progress,' said Eng. Saif al Hamhami, CEO of Abraj Energy Services. 'From securing landmark contracts to driving dialogue on innovation and sustainability, we continue to lead with purpose and deliver impact aligned with Oman Vision 2040.' As part of its OPES presence, Abraj hosted the Abraj Knowledge Exchange, a high-impact two-day mini-conference that brought together industry leaders and technical experts to explore critical themes shaping the energy future. Sessions focused on operational excellence, HSE leadership—highlighting Abraj's outstanding safety performance—drilling automation, and sustainability practices aligned with Oman Vision 2040. The event reinforced Abraj's role as a thought leader and catalyst for industry knowledge exchange. In line with its commitment to local economic development, Abraj's Supply Chain Team organized a Business Opportunity Session targeting local suppliers, service providers, and SMEs. The session introduced upcoming procurement opportunities and Abraj's supplier registration process, while also fostering meaningful dialogue to strengthen collaboration and maximize local content. The initiative drew strong participation and reaffirmed Abraj's support for national ICV objectives. During OSW 2025, Abraj was honored with the Majd Award for Best Local Content Program, recognizing its impactful contributions to Oman's local supply chain ecosystem and SME empowerment. Reinforcing its commitment to sustainable development and transparency, Abraj also launched its 2024 Sustainability Report, outlining key achievements in environmental, social, and governance performance. At its exhibition booth, Abraj showcased digital oilfield solutions, rig automation advancements, and energy-efficient technologies, attracting strong engagement from stakeholders and partners invested in the sustainable energy transition. Abraj's strong presence at OPES and OSW 2025 highlights its continued evolution as a future-ready, regionally trusted partner driving excellence in the energy sector.
Observer
17-05-2025
- Business
- Observer
Credible energy transition hinges on regulatory agility: MEM official
MUSCAT: The complexity of policy frameworks—not technology or ambition—is the real bottleneck in accelerating renewable energy deployment, said Dr Firas al Abduwani, Director General of Renewable Energy and Hydrogen at the Ministry of Energy and Minerals (MEM), during a high-level panel at the Oman Petroleum & Energy Show (OPES) on Tuesday. Speaking during the 'Innovation in New Energies to Enable the Transition' session hosted by the Society of Petroleum Engineers (SPE), Dr Al Abduwani emphasised that policymaking—often criticised as slow or outdated—is far more nuanced than commonly assumed. 'Everyone says, 'Why aren't we doing more renewables?' and the answer is always 'the policy'. But very few understand how deeply layered and technically complex these policies are,' he said. 'It's not just about ambition. It's about designing policies that reflect economic realities, legacy infrastructure, and affordability for consumers and industry.' HIDDEN COSTS, REAL CONSTRAINTS Dr Al Abduwani explained that legacy energy systems—particularly natural gas—are heavily subsidised and socially embedded in Oman's industrial model, which makes sudden shifts toward renewables politically and economically risky. 'Gas in Oman is not treated purely as a commodity—it's socialised,' he said. 'It underpins electricity prices, industrial feedstock, and household consumption. Reforming that structure is like changing the wheels of a moving car.' He estimated that Oman continues to spend over a billion dollars annually in subsidies, underscoring how embedded fossil fuels remain in the nation's economic architecture. A CALL FOR AGILE, ADAPTIVE POLICY To enable a credible energy transition, Dr Al Abduwani called for more agile regulatory systems—where electricity generation, storage, and distribution are interconnected with real-time pricing and dynamic access across the grid. 'A modern energy policy must give generators and consumers the flexibility to interact with the grid dynamically. If you want renewables to compete fairly, you need to unbundle and de-subsidise the system with surgical precision,' he said. He pointed to international examples—such as Germany's multi-decade subsidy transition and market restructuring—as models worth studying, though not necessarily copying outright. 'Oman must chart its own path, but we can learn from how others sequence the shift—Germany, for instance, gave industries 10 years to adapt to new rules.' TRANSITION WITHOUT DISRUPTION Acknowledging that energy transitions risk social backlash if done poorly, Dr Al-Abduwani called for a holistic approach: engaging regulators, consumers, industries, and financiers in synchronised reform. 'You can't expect households and businesses to absorb cost shocks overnight. Transition must be just, data-driven, and inclusive,' he said. 'And that's why policy is hard. It's not just about writing laws—it's about managing trade-offs between security, affordability, and sustainability.' The OPES panel, which attracted government officials, private sector executives, and global energy experts, was part of broader discussions around Oman's clean energy roadmap under Vision 2040, particularly its green hydrogen ambitions and renewable capacity targets.
Observer
17-05-2025
- Business
- Observer
The transition trap: Why clean energy needs more than technology
There was a time when the biggest question in climate conversations was 'what technology will save us?' That era is ending. The technologies exist. Solar and wind are affordable. Green hydrogen is real. Carbon capture is proven. Yet the energy transition—especially in the Gulf—is moving slower than ambition suggests. Why? Because we have built tools but not systems. The trap is not technological. It is structural. At this year's Oman Petroleum & Energy Show (OPES), voices from government, industry, and finance agreed: it is not the lack of solutions that hinders progress—it is the absence of the enabling conditions that allow those solutions to scale. This is the great paradox of our time: we have what we need, yet we struggle to use it at speed. WHEN READINESS MEETS RESISTANCE Across the Gulf, the ambition is undeniable. Oman has awarded land for eight green hydrogen mega-projects in Al Wusta and Dhofar, aiming to produce one million tonnes annually by 2030. Saudi Arabia is building one of the world's largest carbon capture hubs in Jubail. The UAE has reached over 50 GW of clean energy capacity through Masdar and is pushing hard into green fuels and advanced solar. Qatar has deployed its first large-scale solar plant and committed to capture nine million tonnes of CO₂ annually by 2035. These are real, capital-intensive projects. But when you speak to the people behind them, the message is sobering: deals are signed, infrastructure is planned, but execution is slow. Permitting is unclear. Offtake agreements are missing. Risk-sharing mechanisms are weak. The projects are world-class. The frameworks are not. THE GLOBAL BLUEPRINT Elsewhere in the world, the difference lies not in technology, but in policy. In the United States, the Inflation Reduction Act has triggered more than $280 billion in private clean energy investments in under two years—fueled by tax credits, domestic content rules, and production-based incentives. In Europe, the Carbon Border Adjustment Mechanism is not only reshaping global trade flows—it is compelling industries from Turkey to China to measure and reduce their emissions. In Germany, power market reform is underway to reward grid flexibility and build hydrogen-ready capacity. These moves show how political clarity translates into market activity. Investors don't respond to slogans—they respond to structure. The countries moving fastest are those building architecture around ambition. What is most encouraging—and urgent—is that private industrial players are already leaning forward. In steel, cement, chemicals, aviation—firms are no longer waiting for regulation to arrive. They are investing in carbon capture, electrification, sustainable fuels. In Sweden, a new generation of green steelmakers is emerging. In Canada, global firms are retrofitting old plants with clean hydrogen technology. In France and the Netherlands, companies are scaling carbon capture linked to port clusters and industrial zones. But these pioneers also face a dilemma. Their projects cost more—at least for now. Their products are greener—but the markets do not yet reward them. This is where Gulf policymakers must act. Not just to fund innovation, but to build the rules, rewards, and risk buffers that allow these technologies to be commercially viable. THE GULF'S COMPETITIVE ADVANTAGE The region has three unmatched assets: patient capital, integrated infrastructure, and strong project delivery capability. No one builds faster than the Gulf when the incentives align. But clean energy requires a different mindset. It's not about building a single refinery or solar plant. It's about orchestrating entire systems—from permitting and certification to financing and export policy. The Gulf doesn't need to copy Europe's carbon pricing or America's tax credits. It needs its own model. A model that reflects its resource base, fiscal tools, and long-term investment horizon. But it also needs to be clear, bankable, and fast. If Oman, Saudi Arabia, the UAE, and Qatar want to lead the clean energy economy—not just participate in it—they must treat policy and market design as national infrastructure. Because in the energy transition, rules are infrastructure. A CALL TO REWIRE The clean energy economy won't emerge on its own. It must be built. That means rewiring not just how we generate energy—but how we price it, how we value emissions reductions, how we permit innovation, and how we reward climate-aligned products. Otherwise, we risk becoming a region of world-class pilot projects that never scale. A place of vision, but not velocity. The transition trap is real. And the way out is structural. Qasim al Maashani The writer is the head of business and politics section at Oman Observer
