SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION

[M113-02] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:00:32 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Well, first of all thanks Dan for the introduction. I would also shouldn't be less welcoming too than Mr. Khalid Al-Falih, my colleagues, The Cabinet Ministers who would participated in welcoming all our guests from both Arab world and China. I was listening with the previous session on transitioning, and I must say that good chunk of what could have said, now had been said. However, I will try to find some sort of a niche for me to add more to what has been said. First of all, I want to put in perspectives how do we operate as an energy sector, and it would be totally incomplete not to mention that we don't no longer work as an ecosystem alone, as energy sector. We work in collaboration with other Saudi institutions, ministries, regulatory bodies and all of the above, including state-owned enterprises and the private sector.

[M113-03] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:01:54 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

So, we call ourselves an Eco, but we are supported with everybody that has any additional meaningful contribution that enabled us to do our job. We, also, have another piece of the approach, which is the global part which is a very simple approach. We are, as Saudi Arabia, we don't have to be engaged in what I call it a Zero-Sum Game. We believe that there are so many global opportunities. As Saudi Arabia, we're on a pivotal position, geographical position that could enable us to reach out to so many parties, be engaged, be involved with everybody. Those who would like us to invest with them, we're there. Those who would like to invest with us here, we're also there.

[M113-04] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:02:57 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

So, we don't have to be facing any choice which has to do with either, with us or with the others wherever everybody. Now, we also focus on the transactional side of it, in what we have with China, and we can go for a deep dive on that, if you wish. There are so many things that we want to do with them, but equally they want to do with us. There is complementary anomaly between the two countries, whereby there is a great deal of synergies of where their Belt and Road Vision is going to, and where is our vision 23 is also trying to achieve.

[M113-05] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:03:57 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

And if you look at both, and you will see that complementary and synergy there. So, it is a matter of fitting ourselves to make sure that we engage them in being a contributor to the Vision 2030. Also, we feel that there is a great deal of opportunities that we should take a lead with China on achieving them, because actually also we have the wherewithal to do that.

[M113-07] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:04:44 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

I actually ignore it, and I totally ignore it. Because you know if you, as even as businessmen, or as business person now, watch out in Saudi Arabia, we use the word "person" now, we don't just use the word "men". You will go where opportunity comes your way it doesn't have, and again, I just ..just mentioned we are involved in transitional activities. It's not a pot that you have to divide amongst countries. You will go where opportunities come your way, you will go with the partners that are willing to come and invest with you here. So, there is nothing political about it, there is nothing strategical about it. But I believe that we are also engaged with everybody else.

[M113-08] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:05:49 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

That's why we have big ambitions in exporting so many things; electricity, green electricity, hydrogen to Europe. We're working with so many countries, including the US, and so many things. We're an Open Country, we're working with the Koreans, with the Japanese, with the Chinese, with the Indians. We're hoping to export electricity to India. We are working with so many African countries, even Latin American countries. So, if you are going to try to address questions that are not, should not have been asked, I think you'll be wasting your time.

[M113-10] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:06:48 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Well, we, in Saudi Arabia have the right structure with our friends from China. We have a joint committee, headed by His Royal Highness, the Crown Prince and the Prime Minister, Prince Mohammed, with preimage, and as also the heads of the state. Amongst the.. within this committee, there are certain sectorial initiatives. I attend to the bilateral side of the energy side, the holistic energy side. We just had finished two weeks ago, or less than two weeks ago, a lengthy two-days visit, going through all sorts of varieties of potential investments, and they go from A to Z, just to give people a some sort of a clue of why we are interested in China. Very simple, when it comes to oil, oil demand in China is still growing.

[M113-11] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:07:49 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

So, of course we have to capture some of that demand, so as chemical, so of course, we have to capture some of that demand. We want to invest in China, because we also have an ambitious program on crude to chemicals. Our, probably possible more interested party, is Chinese Investments, both we will do it in China, and we will do it here, we have been doing it here, in SAS for example. And we are going to be building more crude to chemical refineries, and it is not just only ARAMCO. It's ARAMCO and SABIC and all of the above. We have great deal of ambition in so many things. In fact, there were just recently some announcements that were made. And I wouldn't be surprised that you will hear some more announcements coming soon.

[M113-12] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:08:53 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

So, that's just one anomaly. We are also having an ambition as Saudi Arabia is to go for .. for the full value chain, which is taking all of these chemicals that we're producing now, and the amount to additional which will go to a roughly around 150 percent more in terms of basic chemicals. Our, unfortunately, lack of achievement, when it comes to conversions is a Six Million Tons, now. We're hoping to reach 30 Million Tons of converted chemicals. Who is going to be our partner? It would be probably, most probably, China, India. Why we need them? Very simple, because most of these finished products will go either to China, India or Asia or elsewhere.

[M113-13] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:09:55 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

But, we are not picking and choosing, we are reaching out to everybody, and whoever wants to come and invest with us is more than welcome.

[M113-15] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:10:31 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

In terms of chemicals, or in terms of upstream production?

[M113-17] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:10:43 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

They do a lot of work with us on ABC's companies which is services and construction, and what have you. We still the case has not been made again. We're not taboo on things for the purpose of taboo-on. We don't have hiccup that when it comes to our nationalism is intact. We look at what would get us to do a better job so far upstream ARAMCO and ARAMCO is doing the best job in planet Earth. So, you don't exchange your child for something else, unless if you need to. And again, we are just open to all of these things. I'm sure the media now will try to abuse it in some way or another, but No, we have and we still, they are engaged with us, they will be engaged in us in .. in simultaneous aspects. And when it comes to gas, but it's going to be more on the midstream parts and what have you, along with others, along with others, because I really would like to make sure that people capture it that there is nothing over so-called Grand Design between us and China and what have you.

[M113-18] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:11:55 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

However, I have to say it clearly and bluntly we're working with them in so many things. I just named the oil and chemical refining and Oil. We're doing a lot in renewable, we'll be doing a lot in renewable, including actually working with them on local, our localization programs, renewable. There is another piece that I need to emphasize, we don't have to be in a place where we set ourselves in competition with China. We have to set ourselves in a place where we congregate with China, they have a great deal in renewable, in manufacturing, all of these components which are essential for any serious and ambitious renewable program.

[M113-19] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:12:54 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Instead of competing with China, collaborate with China. So, we're working with them on not only doing a renewable project in the Kingdom, but also engaging them in manufacturing, these equipment here. That will give us an edge and also would enable us to become an exporting hub for these products. We are even going further with that, with the help and work with the Ministry of Industry that we will plug them also in mining too. We will work with them also in mining abroad. And we have got the right incubators which is MAADEN has just created a subsidiary that will be engaged globally. So, this is the difference we came to recognize the reality of today that China had taken a lead, could continue to take that lead.

[M113-20] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:14:02 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

We don't have to compete with China, we have to collaborate with China, so as also collaborating with everybody else. We will never go again to this Zero-Sum Game. But there is a value for working with China, because they have taken the lead, they have got the right manufacturers. Everybody is buying from this equipment from China. Many countries they are into the high even 50, 60, 70 percent. What is the hiccup of collaborating with China? But that doesn't mean we're not going to collaborate with others, we are offering China now to do some and others, everybody else, including European. As you may notice, I was there in Germany in Holland for last few weeks, working with them and trying to get them to come.

[M113-21] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:14:56 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Like you know, with Germany Inc, come to the upstream which is the renewable projects all the way to the electoralizers, to conversion to hydrogen, with working hard there will be continuing work hard and trying to export electricity and hydrogen shipped or piped or whatever. Again, our, if I can call it, call it, our model, our oprandi of the day. We are working with everybody, analyzing and checking every possible to business opportunities whatever can work we will do whatever there is a requirement for enablers we will put forth, whatever the other side needs to do, also need to do, because for example in hydrogen people talk a lot about hydrogen.

[M113-22] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:15:51 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

But again, I would stress it again, where are the incentives that will make the off-taker commit to the off-taking. But again, our offering goes from A to Z, and you know luckily we have a big space in Saudi Arabia, we're doing this, as we speak now we are surveying almost the whole country, just to make sure that we have designated spaces, whereby we can go as much as creating renewable farms. And our ambition in exporting be it, electricity or hydrogen, or incubating industries that will be needing clean energy for them to have that tag of being green steel, green aluminum, we will do it. It's not a boutique shop, it's all of the above shop.

[M113-24] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:17:14 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

I thought we were not going to talk about it.

[M113-26] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:17:19 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

I have a golden rule. like you know, what happens in Vienna should stay in Vienna, but there is one anomaly that has to do with investment which is very important. The restructuring that we have, you know, by the way this I would. I think thank you for CNBC, called it an unprecedented agreement, so I'm quoting CNBC not only to do that, but actually we went through a quite a comprehensive reform in arranging these agreements. In the final analysis, what this agreement will achieve for all of us is that those who invest not this year, but the years to come, 24, 25 and moving forward, there will be a recognition for their investment, because they will be given a higher production allocations.

[M113-27] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:18:28 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Now, if that happens, and it should happen, because we agreed that it should happen. Investors working with countries, just to name few you know, Alger, Iraq, UE, others will see the merit for investing also in these countries, simply because they know that the Pandorum had moved towards those who invest. So, are we .. we will be in.. we are investing and our production will come hopefully soon. And people need to be rewarded for that.

[M113-29] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:19:12 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Absolutely, absolutely, that's why we had had this agreement, but also we are working against something called uncertainties and sentiments. And I believe that within the next this month, hopefully, the month after, I don't want to bet on gamble, but it's I think the physical market is telling us something. I think the future markets are is telling us something else. It's a matter of being in a state of readiness, that's why you know, we keep taking this precautionary measures part and parcel of what we call it proactive and preemptive, you know, to understand OPEC PLUS, as it is today, it's all about being proactive, preemptive and precautionary. I cannot think of anything else more humane and more humbling, when you are faced with these diverse type of uncertainties. Some of it are excessively over inflated than having to handle this situation, with such an attitude and humble attitude, I would say. People ask me today what will happen to the market tomorrow? I would say: "Sorry, but the Saudi Energy Minister doesn't have an answer".

[M113-31] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:20:44 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

No, and I don't believe in crystal balls. There is one good friend of mine, his name is, Fradon Vacharaki, but he put it at an event for him as a grand finale to bring about joy and happiness, but in the real world there is no crystal ball. There is one thing that you do, you need to be attentive.

[M113-33] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:21:08 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

I know I don't please a lot of people, that's okay, I'm much more interested in with my colleagues in OPEC PLUS to .. to do the job of being a proper regulator.

[M113-35] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:21:30 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

While you're here then check the Saudi audience here. We really hope, we really do have thick skin, because we're Bedouin, we've lived the harsh life, and we can tolerate all of these mockeries.

[M113-37] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:22:16 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Well, I did mention a piece on that hydrogen, but we are actually internally, I don't know if it skipped so many people, you know, back in February 2020 just as COVID Thing commenced, we were mobilizing, putting, metering in Saudi Arabia, not a lot of people noticed that 10.1 Million, 10.2, almost 2 Million, 10.2 Million of meters were hooked in 13 months. Actually, a good chunk of those were made, or were put together by Chinese companies. In fact, which is something I'm very proud of, I should be grateful to the SEC for their an excellent job they did. Actually, we have beaten a Chinese record on how many of them have been poked in a single day, 13 months There is no country in planet Earth, I stand here ready to be challenged, there is no country in planet Earth that poked 127000 meters a day, in a normal situation, let alone during COVID. With that, we're working with them and our Ministry of Telecommunication, with the work of HUAWEI, and it was to commingle electricity wiring and whatever, and transmission lines, and distribution, with also fiber optics that would work with us. They have an excellent experience on the issue of security and safety of transmission lines and distribution lines.

[M113-38] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:24:16 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

So, we are reaching out, but again, it is not just about China, it's China and others. This country had developed a science, I would call it which is called "Joint venturing". It preceded me and others, ever since we have put together our development plan on the 70s, we had made a choice of joint venturing, and we had made a choice also .. also making it as competitive, as transparent. So, the huge amount of investment that we'll be doing both in the conversion of our New Energy Mix, which is the upstream, you know, moving liquids away to Gas and Renewable, the export volumes that we are aspiring to achieve both in electricity and hydrogen, the overhauling of the transmission system and distribution to make it commensurate with the new and modern requirements of a renewable type, including commingling transmission and distribution with the telecommunication part, enabling the consumer to manage his own electricity. All of that will be done not with them alone, but with competitive arrangements. They're focused, they're competitive, they have the right technologies, they're willing to invest here to incubate industries that would localize these industries. So what's wrong with saying may the more competitive win, because it is also helped us economically to achieve our goals in cost efficient way.

[M113-40] · سمو وزير الطاقة (HRH the Minister of Energy) · التوقيت 00:26:27 · SAUDI ARABIA AND CHINA THE NEW ENERGY TRANSITION · 2023-06-11 · مشاهدة عند هذا التوقيت

Thank you!