Transcript: Global Energy Forum conversations with Sultan Al Jaber, Suhail Al Mazrouei, and Musabbeh Al Kaabi

H.E. Dr. Sultan Al Jaber attends the preparatory meeting of Arab Foreign ministers of the 28th Ordinary Summit of the Arab League at the Dead Sea REUTERS/Muhammad Hamed

Event transcript

“A Conversation with H.E. Dr. Sultan Al Jaber”

Opening Remarks by
Frederick Kempe,
President and CEO,
Atlantic Council

Speaker
H.E. Dr. Sultan Al Jaber,
Minister of Industry and Advanced Technology and Special Envoy for Climate Change, United Arab Emirates

Moderated by
Amos Hochstein,
National Security and Energy Expert; Former Obama-Biden Special Envoy for International Energy Affairs, US Department of State

“A Conversation with H.E. Suhail Al Mazrouei”

Speaker
H.E. Suhail Al Mazrouei,
Minister of Energy and Infrastructure,
United Arab Emirates

Moderated by
John Defterios,
Emerging Markets Editor and Anchor,
CNN Business

“UAE Diversification Post-COVID-19: A Conversation with Musabbeh Al Kaabi”

Speaker
Musabbeh Al-Kaabi,
Chief Executive Officer, UAE Investments,
Mubadala Investment Company

Moderated by
John Defterios,
Emerging Markets Editor and Anchor,
CNN Business

FREDERICK KEMPE: Good morning, good afternoon, good evening to our participants and audience from around the world. Excellencies, ladies and gentlemen, hello and welcome to you from Washington, DC to the 2021 Atlantic Council Global Energy Forum. My name is Fred Kempe and I am the president and CEO of the Atlantic Council. Wherever you are in the world, I hope you are safe and that you are healthy.

For the past four years we have gathered a global audience—we have gathered a global audience in Abu Dhabi for a discussion about the geopolitics of the energy transition and to shape the energy agenda for the coming year. This year’s forum, however, will look a bit different. A once-in-a-century pandemic prevents us from enjoying the in-person company, conversations, and insights we’ve always treasured during our time together in Abu Dhabi. We all miss that. But in the spirit of this year, we’re turning that obstacle into an opportunity. Instead of bringing you to the forum, we are bringing the forum to you with sessions across all of the world’s time zones involving a uniquely rich audience and cast of speakers.

I’m also impressed by what our Global Energy Center, led by Randy Bell, has pulled off with our UAE partners at the Ministry of Energy & Infrastructure, ADNOC, Mubadala, and Masdar. We think you’re going to like what you see. And we are so proud, once again, to gather under the patronage of this highness Sheikh Mohammed bin Zayed al Nahyan, crown prince of Abu Dhabi and deputy supreme commander of the United Arab Emirates armed forces.

I’m coming to you live from Washington, DC. And on this morning, one day ahead of tomorrow’s presidential inauguration, the city is in lockdown with concrete barriers, high fences, and more than twenty-thousand National Guard troops. Yet, even though the United States looked into the abyss of violent insurrection on January the 6th, the American system of government and our institutions have shown their resilience, durability, and dynamism. The 240 year-plus tradition of peaceful transition and leadership will take place tomorrow. And with it, we have the renewed opportunity to find common ground on the crucial issues shaping our shared future, from climate to the Abraham Accords.

We are proud that this forum can set an example of how steadfast commitment to thoughtful, measured, fact-based, science-based debate can underpin our domestic strength here in the United States and international purpose across the world. I thank you for joining us in that effort. Even as COVID-19 continues to wreak devastating public-health and economic consequences across the globe, entering 2021, we see the light at the end of the tunnel. As governments look to rebuild their economies, the energy transition to cleaner and more sustainable energy sources has actually accelerated during this period of pandemic.

At the Atlantic Council, we have always maintained that we are stronger with partners and allies. If COVID-19 showed us anything, it is that the world’s biggest challenges can only be tackled collaboratively. And that is the founding ethos of the Atlantic Council and the spirit of our Atlantic Council Global Energy Forum.

Now, as I kick off the 2021 forum, I’d like to thank our presenting partners and dear friends of these past five years: The UAE Ministry of Energy and Infrastructure and Minister Suhail Al Mazrouei; ADNOC and H.E. Dr. Sultan Al Jaber; Mubadala and Musabbeh Al-Kaabi, chief executive officer, UAE Investments, Mubadala Investment Company; and Masdar, led by CEO Mohamed Jameel Al Ramahi. Your support and commitment have helped build this convening into the annual agenda-setting event we envisioned just a few years ago. It’s an amazing team.

We also are deeply proud to once again be part of Abu Dhabi’s Sustainability Week and contribute to the thoughtful virtual conversations taking place as part of the various ADSW events.

I’m also delighted to welcome our co-chairs, Helima Croft from RBC Capital Markets and Tim Holt from Siemens Energy; and our international media partner, CNBC; as well as the largest group of sponsors and institutional partners we have ever assembled. You, along with the thousands of participants joining us virtually, are crucial to our success. And I thank you for your participation, even in this year of such uncertainty.

It’s now my distinct honor to officially open the 2021 Atlantic Council Global Energy Forum, the fifth annual, by introducing three interviews which will ground our discussions for the coming days.

First we’ll turn to H.E. Dr. Sultain Al Jaber, UAE Minister of Industry and Advanced Technology and special envoy for climate change, and Amos Hochstein, a remarkable energy diplomat, business leader and Atlantic Council board director. They will discuss the importance of seizing the moment of renewed global consensus to take action against climate change.

Dr. Sultan and Amos, over to you.

AMOS HOCHSTEIN: Thank you, Fred.

And welcome to the Global Energy Forum at the Atlantic Council, virtually this year. I’m honored to have the opportunity to be in conversation with one of the most intriguing figures in the UAE and the global energy markets beyond. His Excellency Sultan Al Jaber holds many titles. Recently Dr. Sultan was also named to be UAE special envoy on climate change, a relevant topic for what we’re going to be discussing today.

Welcome, Your Excellency. It is great to see you, even if just virtually. In fact, I believe the last time we saw each other was at this Global Energy Forum in Abu Dhabi last year.

As I just said, you’ve recently been named special envoy on climate change. And the UAE just announced its second NDC. What is the UAE’s approach to contributing to the global effort to overcome the challenge of climate change?

H.E. DR. SULTAN AL JABER: Hello, Amos. I’m very happy to see you and to speak to you. And let me just say hello to everyone participating at the Atlantic Council Global Energy Forum. And I’m very happy to be back and to be joining you all, even though virtually, hoping that next year we’ll all be able to meet in person, and hopefully here in Abu Dhabi.

Allow me also to say welcome to everybody participating in this year’s forum from around the world, and in particular our friends in the United States.

Now back to your question. Those who know the UAE, and those who know the UAE well, know that we have always made a positive contribution to helping address global challenges, and the challenge of climate change is no different.

This is exactly the narrative or the ethos that guided us to launch Masdar about fifteen years ago as a clean-technology hub that today is the permanent home of the International Renewable Energy Agency, IRENA. And Masdar today has also become a true global investor in renewable energy globally. In more than thirty countries, Masdar is already physically present through large investments by scaling up renewable-energy technologies and investing in scaling up those technologies and helping bring the cost down.

We not only talk the talk; we walk the walk. And we have seen firsthand how smart investment and diversified energy mix can pay off. When we started Masdar fifteen years ago, solar and wind were high-cost, nascent energy sources. But today, they are very cost competitive. In fact, we just set a new record for low-cost solar energy at the world’s largest solar park here in Abu Dhabi and at Al-Dhafra region with a tariff of 1.35 cents per kilowatt hour. We were the first country in the region to sign the Paris Accords and the NDC that we submitted last month. This makes us the first country in the region to commit to any economywide emission reduction.

Our approach to climate change reflects our leadership’s dedication to addressing global challenges, and we do this in close partnership with the international community and with all kind of partners from all over the world. And we believe that partnership not just between countries, but between industries—including the oil and gas industry—is actually crucial to achieving our collective climate goal—climate objectives and climate change goals.

AMOS HOCHSTEIN: Dr. Sultan, let me pick up on something that you just talked about. You’ve been at the forefront, as you said, of promoting renewable energy—not just UAE, but you personally have been at that forefront through your leadership of Masdar. And you and I met when you were in your—at the early years of you chairing Masdar. And in fact, I remember in the spring of 2016 I toured Masdar together with then-Vice President Biden, tomorrow about to become President Biden, and we received a tour from you. And later that evening, in a small dinner with His Highness Sheikh Mohammed, we talked about what you just talked about right now. Sheikh Mohammed asked you to brief then the vice president on the role of UAE and the ability to see the importance of climate change and the role that UAE was already then playing through Masdar and advanced technologies.

And over the last four years, in addition to chairing Masdar, you’ve also been the CEO of ADNOC. And I was wondering if you can share with us how you see those roles aligning. You just touched on that in your last answer about the role of the oil and gas industry. How do you see those roles aligning, especially now as you come to the global stage as the UAE climate change special envoy?

H.E. DR. SULTAN AL JABER: Amos, I remember that visit by the incoming President Biden so well. It actually feels like if it happens—it happened only a few days ago. And I remember in particular how important sustainable development and sustainability in general was to the incoming president. I remember how engaging he was. I remember also the type of questions he was—he was asking. It is clear how much focus he intends to give to climate change as part of his agenda. And, yes, I was very honored to have had the opportunity to share with him how we approach these issues here in the UAE, and I was also very pleased to have the opportunity to give him firsthand practical examples of what we are doing through Masdar and the many other initiatives here in the Emirates.

Now, getting back to your question, you asked me about how these roles in a way fit together. And I’m glad, Amos, that you asked me this question because I know that it crosses many people’s minds. It is, firstly, a great honor that I have been appointed by my leadership to take on the climate envoy role for the second time, after previously serving in this capacity between 2010 and 2015. Since then, as you rightly point out, I have assumed the role of the group chief executive at the Abu Dhabi National Oil Company. And rather than being in conflict, I believe working across the energy mix has given me a deeper understanding of the entire energy system.

And based on this, it is clear that the hydrocarbon industry simply has to be at the center of the conversation on climate change. And most importantly, oil and gas has to play a role to be part of the solution. And the fact is, the world will still rely on oil and gas for many decades to come. So this industry, the oil and gas industry, can and must play an important role in the transition to a lower-carbon future.

Here, the UAE has a dual advantage: A leadership that has always put environmental stewardship and environmental protection first, and the natural advantage because our geology gives us some of the least-carbon-intensive oil in the world. And we are building on this position by reducing our carbon intensity by a further 25 percent over the next 10 years. And we are doing this by enhancing efficiencies and expanding our industrial-scale carbon capture and storage facility, which is known to be the first and the largest in our region.

In addition, we are exploring the potential of new fuels such as hydrogen, which could be a game changer in the energy transition. We already here in ADNOC produce about 300,000 tons of hydrogen a year as part of our current industrial processes. We are currently exploring the viability of markets in Asia and in Europe. As those markets progress and develop, we will build the business case that could position us—Abu Dhabi and the UAE—as a major player and a major supplier of blue hydrogen worldwide. It is very early days, though. But with the right regulatory framework, I believe there is significant potential in hydrogen energy.

 Courtesy of the Abu Dhabi National Oil Company

AMOS HOCHSTEIN: Dr. Sultan, you’ve just talked about some of the efforts by the UAE and the—in the advanced technology around renewable energy. And I was wondering, as we come into a new administration here in the United States with President Biden and Vice President-elect Harris, and this—the focus that you just talked about that you saw from President-elect Biden when he was in Masdar has just increased over the years since that visit. So with this focus—and you’ll be working with John Kerry—the former secretary of state, John Kerry, now as the—as the envoy—how do you see the opportunities for collaboration specifically between the UAE and the United States on all these areas that you just discussed that you’re doing from the UAE? What are the areas of cooperation and collaboration that you see possible in the near future?

 Courtesy of the Abu Dhabi National Oil Company

H.E. DR. SULTAN AL JABER: As you know, Amos, the UAE and the US have a deep-rooted, very strong, longstanding relationship based on shared values and strategic interests. The relationship between the UAE and the US is multifaceted, covering diplomacy, politics, security, energy, trade, technology, investments—investments in different areas, private equity partnerships and investments—of course culture, and health care. In short, we are very aligned in many, many areas, such as promoting peace, creating opportunity, and enabling progressive prosperity.

The Abraham Accord is a very good example—in fact, it’s a prime example. With US diplomatic support, we created a bridge for the first time between Israel and the Gulf countries. And this agreement in particular is already creating economic opportunity for the whole region.

Our strategic energy alliance with the US is already very strong. And as you know, the US was instrumental in bringing peaceful nuclear energy to the UAE as part of the 123 Agreement. And as both our countries emerge from the pandemic, I believe there are great opportunities for collaboration across the energy sector and, I’m sure, across a variety of many other sectors. Starting, though, with energy—starting, though, with energy, Amos, you know we have many concessions and exploration partnerships with many US companies including Exxon, OXY, Baker Hughes, just to name a few.

In the near term there is room for deepening this energy cooperation around unconventional oil and gas, which we are currently progressing and discovering here in Abu Dhabi. And it’s very, very promising and would provide a very special, unique opportunity for American companies to explore such partnership opportunities with us. And there are, of course, very clear opportunities to build on our cooperation and efficiency-enhancing technologies. New energies such as hydrogen, carbon capture and storage. And of course, renewable energy sits very high on our agenda. And I am sure there will be many areas of cooperation in the fields of renewable energy and the mitigation of climate change.

Outside of energy, and as our economy diversifies, I see significant potential for investment in our emerging industrial sectors—manufacturing, biotech, health care, agriculture. We’ve seen recently many US private equity firms discover the UAE as a stable, well-governed, well-established business-friendly investment administration. And we welcome that. We look for more opportunities like those. In addition, we would like to see more collaboration on artificial intelligence advanced technologies. We would like to see us expand our cooperation between the MBZUAI University—the Mohammed Bin Zayed University for Artificial Intelligence. It is the first of its kind. Homegrown, graduate-level, research driven, very much focused on artificial intelligence, digitization, and machine learning. That could be a very unique opportunity for true long-term strategic partnership in a very important field, like AI.

In short, there is no shortage of great opportunities—great opportunities for investors from the US to explore here. And I know that these investment opportunities will offer great returns while also making sure that they are—they provide practical progress on helping address global challenges.

 Courtesy of the Abu Dhabi National Oil Company

AMOS HOCHSTEIN: Thank you. And I think that that also demonstrates your ability to lead on many of these areas as both—in the energy field on both the oil and gas, the climate, as well as in the Ministry of Industry and Advanced Technology.

But let me turn to another area of—potentially of cooperation that will be needed, not just with the US but on a global stage. If you think about the COP negotiations—the COP-26 negotiations upcoming in Glasgow, which are the most consequential since Paris, this summit comes as the world is not only united as never before on climate change and the ability—the need to come together to address this crisis, but also the world is coming—hopefully coming out—or potentially seeing the light at the end of the tunnel of coming out of the global pandemic and COVID-19.

In that pandemic, as we recover for a minute, we also see the haves and the have-nots, the separation between countries as—economically—as we come through this deepen. How should the industrial world balance those needs of economic development and the basic needs to be able to supply their own people with necessary needs in the emerging economies with the need for a global and universal climate change action?

H.E. DR. SULTAN AL JABER: The COVID experience has shown us that when humanity comes together there is no challenge we can’t overcome. And while COVID and climate change are two very different challenges they have three factors in common. They are both global, they respect no borders, and they require a collective, united response. And just as we have with COVID, the UAE will lead as a responsible global citizen. And it will use its convening power to help advance global progress when it comes to addressing climate change.

A great example, aside from Abu Dhabi’s Sustainability Week itself, is the upcoming Dubai Expo, which will be the first expo hosted in our region. It will be focused on uniting the world around equitable solutions to sustainable development. In fact, the sustainability pavilion was only opened yesterday. And hopefully when you come soon to the UAE you’ll be able to visit the expo site. And I know for a fact it’s something you should see and experience.

And to get back to your specific question about balancing the needs of emerging economies with climate action, I find this to be a very important question. In fact, it is a critical question. I fundamentally believe that we can achieve climate goals while ensuring economic progress if we avoid one size fits all policies. We need to adopt a custom-tailored approach for each region, and we need to always strike a balance. Reducing carbon is something we can all agree is a common goal but should not undermine the ability of emerging economies to give their people a better future and to ensure a progressive, stable economic growth.

For instance, Africa should not be forced to pay the price for the industrial revolution that helped mature economies to get to the level of development they enjoy today. We need to create the right mechanism in terms of funding, energy mix, and broader economic development that strikes that right balance. So I am very much looking forward to COP-26. I know for a fact the UAE will play an important role. I know for a fact that the UAE, again, will play a proactive and a productive and a progressive role in helping achieve the global objectives in addressing such a global challenge in addressing climate change.

AMOS HOCHSTEIN: Thank you, Dr. Sultan. I think that from cooperation between our two countries and cooperation of our two countries with the rest of the world I hope we can achieve some of the goals that are so needed right now to address not only climate change but to do it, as you just talked about, in a way that enables the whole world to battle climate change in the best way that they can.

We’ve come to the end of our time. I could have continued all day, and I think everybody listening to you could continue all day to listen to how to thread this needle that you are—that you are tasked with. But know that we have a great agenda coming forward in the forum. I thank you for taking the time to be with us today and for the opportunity to be in conversation with you today.

H.E. DR. SULTAN AL JABER: Thank you very much, Amos. And I want to thank everyone at the Atlantic Council for such instrumental work, and really thank them for the opportunity. And I look forward to seeing you all in person in the very near future. Please stay safe. Thank you.

FREDERICK KEMPE: Wow. What a powerful start. Thank you, Dr. Sultan. Thank you, Amos. Dr. Sultan, those were wonderful photos of Vice President Biden—then-Vice President Biden, President-elect Biden in Abu Dhabi. Your insights are always so rich into climate, into oil and gas as part of the solution, into the dual advantage of the UAE. Again, really rich across the horizon. As much as I enjoyed reading your recent interview with the Financial Times, it’s even better seeing you virtually, and going to be even better next year seeing you in person yet again. Thanks again to both of you.

I’d now like to pass to John Defterios for an interview with His Excellency Suhail Al Mazrouei, minister of energy and infrastructure in the United Arab Emirates. They will frame the UAE’s approach to a dynamic set of energy challenges and opportunities in the coming year. John and Minister Mazrouei have been a part of this forum from its beginning.

John, Minister Suhail, a warm welcome to both of you, my friends.

JOHN DEFTERIOS: Great. Fred, it’s good to see you, albeit virtually, but glad to see you’re on watch in Washington for us and for the historic inauguration that’s going to be taking place in less than twenty-four hours. So great to see you.

All one can say at this stage is what a year, right, because of the shock of COVID-19. We’re seeing the variants now spreading to different parts of the world. It’s keeping the world on edge, rightfully so, but also forcing energy producers to be extremely nimble.

I remember in March of 2020 I was at the OPEC+ meeting in Vienna. There was a debate about whether to cut 600,000 to 1.5 million barrels a day. What would be enough? And just about two months later, it was a record cut of nearly ten million barrels a day. Now, that’s been tapered. But again, because of the variance we’re seeing in demand and the uncertainty going forward, we saw Saudi Arabia start 2021 with a surprise cut again. And we’ve seen a rally going into it.

That kind of sets the framework of our discussion, at least at the front end. A few hours ago I sat down with Suhail Al Mazrouei virtually. He’s in Abu Dhabi. I’m in Dubai this week. And we started about whether this market’s finding balance or not, or is the rally overblown? Let’s start there.

JOHN DEFTERIOS: Minister, we’re in a stage right now where oil’s around $55 a barrel for North Sea brand. The market is signaling that the inventories will rebalance faster than anticipated. But is it premature, knowing that in many countries around the world they’re dealing with the third wave and more variants? Do you see this market coming into balance? And, if so, by when?

SUHAIL AL MAZROUEI: Well, John, it’s a very delicate matter. And we are—need to remember that we are experiencing this for the first time. What happened in 2020 was extraordinary. And balancing it, it will—it’s also interesting. I think, in our forecast as OPEC+ group, we’ve been managing the balance very well so far. We are taking meetings on a monthly basis to ensure that we are always there to take any new things that are happening, whether the pace of the vaccine or the development of the virus, and relaying that to the demand and the effect of it.

So far I think this year, the way we see it, is a year of recovery. Whether it’s going to be the end of the year where we were supposed to reach the balance or the beginning of 2022, the forecast or the expectation is to be the beginning of 2022. But I am hoping that the pace of the vaccine will positively surprise us, and hopefully we can catch up earlier than that date.

JOHN DEFTERIOS: In fact, the latest OPEC monthly monitoring report was suggesting by the end of this year you could see demand rising to just about ninety-six million barrels a day from the destruction down to ninety million barrels a day last year due to COVID-19.

You’re more optimistic. Why is that?

H.E. SUHAIL AL MAZROUEI: Well, it’s the pace, John, of the vaccine. You remember before the launching of the campaigns of vaccine, vaccinating the people, some people were skeptical on the pace. I think we are catching up at a good pace, looking at it in January. So I’m hopeful that with the help of the various governments and the approvals that the vaccination will be faster. Plus we are in the winter. And hopefully during the summer we will see also some help in the seasonality effect.

We’re seeing very good demand in China and the major economies like China and India. And we’re seeing that people are starting to—in certain parts of the world starting to go back to normal. That gives me some hope, John.

JOHN DEFTERIOS: A hundred million barrels a day. Do we reach it again and surpass it? That’s a huge question mark, whether peak demand has already been reached due to COVID-19. What would you say we’re going to be seeing by 2040?

H.E. SUHAIL AL MAZROUEI: I think there is still room to grow beyond the hundred million. If you look at different expectations in 2040, it ranges from 109 to 105. But again, we will see. It depends on the alternatives, how convenient they are in getting to the market. We’re talking about growth in the population. We’re talking about as well many people who cannot afford electricity or a car may do that in the next coming twenty years or so. All of those numbers are not knowns and they will drive demand, in my view.

I think it’s 2040 at least will be a year of growth. And until we reach there, I am sure that technology will develop. That doesn’t mean that the other forms of energy will stay as a percentage as they are. We are all spending efforts and putting strategies to ensure that the contribution from renewable energy is coming. And we believe in the Emirates it will surpass the fossil-fuel contribution. But that’s for us. And other countries will have different options, I’m sure, and they will evolve. But for us in the Emirates, we are looking at a 50 percent or a little bit less than 50 percent by 2050. And I think the demand on oil will be solid till we reach 109 in our expectations as OPEC.

JOHN DEFTERIOS: You’re almost serving as a contrarian as the UAE, taking capacity from over three million barrels a day, now about 3.5 [million barrels], going to five million barrels a day. What does that tell us, that the low-cost Gulf producers, the efficient ones, will build market share over time? This is the new reality and the strategy of Abu Dhabi?

H.E. SUHAIL AL MAZROUEI: Well, John, other than market share, what we are looking for is efficiency in production. And we are trying to be an example of how international or an IOC or an NOC produce. We are investing in reducing the carbon footprint in our oilfield operations, and we believe we will be producing some of the cleanest barrels in the future. That, with our partners, is the aim.

Second, the demand—as we just mentioned, there is an expectation that the demand will grow. But the contribution from different countries will differ as some of the countries will be facing and will be facing drainage of certain resources, and they will tap into more expensive barrels. We have the—we are targeting to be the lowest-cost producer and the cleanest-cost producer as well—the cleanest-barrel producer as well.

So those combinations is what gives us confident that in the future our barrels—there will be demand in our barrels. And we want to be ready, if a surprise or a demand pick up, then we have that resources. We all know that trillions of investments have not happened in the past four to five years. And I know that it will catch up with us if we are not investing.

JOHN DEFTERIOS: Well, let’s cover this idea of OPEC+. With this capacity expansion, will the UAE remain within this structure going forward? Many are raising the question that because you want to grow your market share and you’re growing capacity that you’ll outgrow OPEC+ and its usefulness.

H.E. SUHAIL AL MAZROUEI: No, I think, at the end of the day, it depends on how you see the world. We’re talking about 2030. And until that time, we believe that there will be a pickup on demand. We are—we are concentrating our production, as I said, John, on becoming more efficient. And we have learned a lot of COVID and the lower-price environment that hurt us before to ensure that we are the lowest-cost producer in the world. And we believe that for those who are investing in the technology and investing to produce relatively cleaner barrels, they will—they will have—they will have that demand on their barrels in the future. I’m not worried about competition, and I don’t think there is—there is a contraction between having a capacity and staying a part of the group.

JOHN DEFTERIOS: OK. Very good.

It’s interesting, what do you tell governments right now who are working on COP-26 in Glasgow at the end of 2021, that you have this mix of both hydrocarbons and renewables within the country—and you’re investing even more and have nuclear capacity there that you’re utilizing—but at the same time you’re expanding production capacity? Is the answer that we’re going to be a low-carbon producer or the lowest-carbon producer, in your view?

H.E. SUHAIL AL MAZROUEI: Well, it’s a balance, John. We have responsibility as one of the major suppliers to the—to the other economies. And our responsibility puts on our shoulder the fact that we have to keep investing while others are not investing in this commodity to ensure that it’s available for the economies, it’s available for jobs to be created. And we are continuing doing that even at the difficult years like the year that have—that we have seen in 2020. We keep investing because of that responsibility.

The second thing, at the same time, we realize that the demand for energy will be increasing in the future. We are working on different frontiers. One is the blue hydrogen and the green hydrogen as we are building a capacity in the renewable energy. So hydrogen is one of those resources that we think will take—will play a key role in our future and in the world future.

The transition typically takes longer than expected. Many people thirty years ago predicted that by 2020 or 2021 we will be a more—less than 50 percent relying on fossil fuel. Guess what? We are still at around 80 percent or so.

So there is lots of things—there are lots of things to be done. I think we need to work on reducing the coal-fired, the power stations, replace them with gas if possible, and complement that with renewable, with nuclear. So every country, depending on what’s available to it as resources, will have to drive that—their strategy.

But all in all, John, we are all working toward reducing the carbon footprint. We are aiming for a reduction of 70 percent by the year 2050, and that’s a commitment that we are putting to the world.

JOHN DEFTERIOS: You know, it was a punishing year, 2020, for US shale, and they lost nearly three million barrels a day in the United States as a result of this shake out. In this recovery we see right now, would it be a mistake for the US producers to press on the throttle here and try to capture back market share because it’s a fragile recovery and we haver the variance that we talked about?

H.E. SUHAIL AL MAZROUEI: Well, first of all, again, the—it depends on if you are on the investor side or on the volume side. And I think more emphasis are put now in the US on the investors’ expectation.

As you know, UAE, we are a major investor in the world, and we understand that. There are expectations from the shareholder, from the investors in term of returns. And I think, looking at the—at the—what the shale have been through, I’m not sure that growth at any cost will be—will be the option. I think there is wisdom right now on the right pace of growth. We all appreciate what the US have done during the year 2020, of the producers of the—from all over the US have done in reducing their supply to cater for the reason which was the shortage of the demand.

So I’m sure now wisdom. It’s not just going to be growth at any cost. I think it’s going to be a wise growth driven by the investors’ expectation.

JOHN DEFTERIOS: Yes. Do you think expectations now in the energy market are a little bit ahead of themselves here? We’ve had quite a healthy recovery. Should we base it on real fundamentals and a real recovery in the second half of 2021, and the message here let’s be prudent and not exuberant?

H.E. SUHAIL AL MAZROUEI: I think we have to be prudent. We have—I mean, many people have burned their fingers several times, so they have learned their lesson. And I think all of us as producers, now we need to work together to get to our—to get the world to the status where it was before.

And I mean, what happened in 2020 was unimaginable—the level of reduction in demand, the level of inventories building that was reached. All of that need to go back to balance, and that will take efforts from everyone.

So we are—we are hoping that everyone will be cooperative. We are doing—we are taking a burden as OPEC+ countries. And I am sure that the others will not—will not overdo it looking at the investors’, as I mentioned earlier, expectations.

JOHN DEFTERIOS: It’s interesting. If you take a look, because of ESG—environmental, social, governance—a lot of the IOCs are not expanding their production. Doesn’t this give the state operators, like ADNOC here in the UAE and what we see with Saudi Aramco, a lot more flexibility to pick up market share during this historic shift?

H.E. SUHAIL AL MAZROUEI: I think it will be interesting. You rightly mentioned, I mean, the IOCs now driven by their national interests are looking to diversify within themselves not to focus only on hydrocarbon and also to go to hydrogen, to go to renewable energy, as well as energy investors rather than oil and gas investors. And that will definitely change the focus on the investments. And those who are investing, as I—as I mentioned earlier, John, are going to be a beneficiary of that market share because they have already invested on those barrels. And it’s going to be an interesting landscape to watch.

Looking at the US, as well, with the new administration and hopefully going back to Paris Agreement, what is that going to do to the United States’ production? And any restrictions going to be imposed on the producers? All of that is going to be wait and see during the year 2021 and 2022.

JOHN DEFTERIOS: It was great to have you, Minister. Suhail Al Mazrouei, the minister of energy and infrastructure in the UAE.

H.E. SUHAIL AL MAZROUEI: Pleasure. Thank you, John.

JOHN DEFTERIOS: So Suhail Al Mazrouei covering the landscape for us, literally, from what we faced at the very beginning in the early part of 2020, the response by OPEC+, the strategy of the UAE building that capacity to five million barrels a day, the influence it would have on the shale producers, and then finishing off there about the changing landscape of the international oil companies and the opportunity it presents for the big state oil producers, particularly here in the Middle East, in particular the Gulf.

So we’ve heard from Dr. H.E. Dr. Sultan Al Jaber, Suhail Al Mazrouei. Let’s bring in a major strategic investment fund here in Abu Dhabi, Mubadala Investment Company; $232 billion worth of assets with aspirations to grow that up to half-a-trillion dollars over time. The person I’m going to introduce is a familiar face to the Atlantic Council, but under a different title before. Musabbeh Al-Kaabi is now the head of UAE investments, but actually has a much broader portfolio.

Musabbeh, it’s good to see you back in the Atlantic Council, although one’s in Dubai and the other one’s in Abu Dhabi. But welcome into the virtual stage.

MUSABBEH AL-KAABI: Thank you, John. And I would like to welcome all of you, again, to the Global Energy Forum, although this time it’s virtual. But I hope next year we can have the opportunity to sit all together. And you know, we are missing the old days of pre-COVID but are optimistic that we will get this behind us.

JOHN DEFTERIOS: Yeah, indeed. And during the expo period at the same time, when the Atlantic Council will convene around the Abu Dhabi Sustainability Week.

This is hot off the presses. There’s a new structure in place by MIC, the Mubadala Investment Company, with you in charge of UAE investments. And I suggested that your portfolio is wider than that. But give us the strategy here. Is it to home in on this market, look at the strategic partners you have already, look how we can enhance job creation, diversification, and to look at new opportunities? What was the driving force behind that, Musabbeh?

MUSABBEH AL-KAABI: Well, I think, you know, in the history of Mubadala, of course, we started back in 2002 as a development entity. Then we evolved into an investment company back in 2017, of course. We merged with another sovereign wealth form, IPIC. We formed a bigger, of course, investment powerhouse for Abu Dhabi. Currently, as you mentioned earlier, asset under management of around $230 billion and a view of what’s happening. You know, and the effort of our shareholder, the government of Abu Dhabi, is to push the economic diversification forward.

We are taking a view, and strategic initiative, to also focus, or refocus, in toward the UAE economy, build or, you know, expand, strengthen the existent industrial or businesses we have, create champions. And more interestingly, because of what’s happening globally, try to explore new sectors. And what makes Abu Dhabi different is, you know, we think we have the right, you know, ecosystem. We have the right partnerships globally. And we’re confident that we will push the economic diversification going forward. And it’s—I think we need to put more acceleration in the view of what you discussed earlier. I think the energy transition is happening. And this region is pushing that agenda forward, so we got to play our part.

JOHN DEFTERIOS: Let’s pick up on that then. You signed an MOU with Siemens Energy. And Christian Bruch, the relatively new CEO of the group, and your good self. Blue hydrogen, green hydrogen. I’ve heard this, and did an interview with Khaldoon Al Mubarak, his excellency who runs your fund. What do you think is the objective here? Is Mubadala going to be the driver of hydrogen development, and being a member of the Global Hydrogen Council, for example, as an indicator of what you’re planning?

MUSABBEH AL-KAABI: Yeah. As you mentioned, we joined the Hydrogen Council last year as—in the investment, you know, category. And we believed this potentially could address some of the inherited issues with the renewable energy. So the hydrogen touches many places. You can use it power generation, in the industrial activities. So it has a wider scope than, for example, renewable energy from solar or wind. So I think we have a window of opportunity in the next five to ten years that will have a, I would say, significant impact on the energy demand going forward.

But if you look at the energy from now until 2050, we think the energy demand will double. And as probably discussed earlier by Dr. Sultan, there is no one size fits all. So we maintain our view that all sources of energy will be required. And we identified hydrogen as one emerging energy source that would definitely help in the—meeting the energy demand in the future, and addressing one key topic, which is the climate change. So we’re monitoring the space. We’re putting the right efforts, resources in place to play our part. And as you mentioned, I think this week—Abu Dhabi Sustainability Week—we signed a few agreements where reflecting our conception of this emerging, you know, energy source, and putting the right efforts to, you know, play a constructive role going forward.

JOHN DEFTERIOS: What happens with Mubadala Petroleum? I’ve talked to you about your operations, for example, in Malaysia, good gas discoveries. Mubadala Petroleum was the one that was going overseas and being very strategic about what it invests into. With this energy transition, do you exit those hydrocarbons? Do you keep them in play and then build up the energy mix, for example, with hydrogen? What is the strategy?

MUSABBEH AL-KAABI: Not necessarily exiting these assets. I think, as clear when you look at all these projections going forward, you know, the—our strategy will be built on our view of the future. So let’s look at Mubadala Petroleum. Mubadala Petroleum, in the last five-plus years we’ve focused primarily on natural gas. So be it in Malaysia, Southeast Asia, or in Thailand, or in Egypt.

So that’s putting the company in the right, I would say, space, because natural gas is enjoying, relatively speaking, a stronger growth than oil, at least until 2035-2040. And that’s the strategy currently. But it’s very important also to maintain a very low-cost production, because in the energy transition I think it’s very, very important that we remain profitable, resilient, of whatever commodity prices we see going forward. So yeah, I think we will maintain our principles. Natural gas is attractive. And, you know, being a low-cost producer going forward.

JOHN DEFTERIOS: Yeah. You make a great point, because natural gas as a transition fuel is a theme that’s been brought up by our two previous guests, and rightfully so. I brought up in that interview with Suhail Mazrouei about ESG. And how does that fit into the Mubadala strategy here? How do you measure environmental, social, governance when putting forward investments now and in the future, and what comes into the UAE in that scope?

MUSABBEH AL-KAABI: Yes. We are a responsible investor, John. And you know, we’re taking the ESG very seriously. We have a committee internally that looks at the investments from also the ESG lens. So you know, we joined also the IFSWF, International Forum for Sovereign Wealth Fund, last year. In November also we joined One Planet. And we’re making sure that going forward we will play a constructive role in ensuring that our investments are in the highest—are in high compliance with ESG requirements.

So even for the environmental or climate change—we’re currently running up, you know, an exercise to, you know, identify our carbon footprint, and putting the right measures in place to ensure that, you know, we play our role going forward. But rest assured, I think, everyone knows that Mubadala has been very active when it comes to the sustainability agenda. Masdar, the leading renewable energy company here in the UAE, one of Mubadala’s, you know, companies, you know, was established back in 2006 when people at that time were very skeptical, questioning also the prospectivity and the potential for renewable energy.

I am glad to see Masdar today is recognized as a global leader in renewable energy and expanding more and more into that space. So, yes, even in our conventional and traditional industries we are encouraging them to incorporate sustainability agenda. For example… economy and, you know, with the petrochemical industry. So we are, as a responsible investor, extremely focused on making sure that our businesses are sustainable, profitable, and run at the highest, you know, standards.

JOHN DEFTERIOS: OK. Let’s take a strategy here. And I saw what his excellency Khaldoon Al Mubarak had done with the merger of Emirates Global Aluminum here with the properties in Dubai, where I’m sitting today. How do you help EGA in its transition to natural gas as a feedstock and then eventually hydrogen? Can you take that example and say: We’ll apply ESG here, let’s do it at home with aluminum production?

MUSABBEH AL-KAABI: Yeah. We started that discussion a long time ago with the management of the—of EGA. And for the record, EGA’s one of the leading, you know, aluminum producers globally. They’re also being differentiated, being innovative. So they’re exporting all sorts of their know-how, their technology. And, you know, well-established, very strong business. So, yeah, you ask yourself: What does the customers need? And in the view of the climate change, because inherently this business is energy intensive and the carbon footprint is relatively high.

So we’re very glad to reach an agreement recently with DUBAL a few days back, where we’re going to produce a first-ever green aluminum—aluminum coming from solar. So that’s a great step. But this is only one step in the right direction. I’m confident with the current strategy in place by EGA board and the management we are going to embrace more and more initiatives to pivot this industry into a sustainable and green going forward. It’s not going to happen over one year, John. I think it’s going to be a journey where we decarbonize this industry, and make sure that it is—that it’s sustainable.

JOHN DEFTERIOS: I want to just see if we can take the final question to get some insights into how this all comes together. You know, we had the Cleveland Clinic Abu Dhabi and then Mubadala Health Care and the broad range. Was this the ultimate test for the bandwidth, if you will, that COVID-19, the pandemic, applied on the UAE and you’re actually in the response time for tracing and testing and now vaccines? You’re getting the payback with the global partnerships, the knowledge, the inherent home knowledge that’s been developed.

I don’t mean to sound soupy, but it’s been a robust response to COVID-19. What have we learned and the feedback it gives to your society at the same time?

MUSABBEH AL-KAABI: Yeah, I think there is no doubt that the year 2020 is COVID year, COVID-19. And it is a bald check of the system, a bald check of your—of your infrastructure. So in one hand we’re extremely satisfied, happy, and very proud that the UAE, at the leadership level, at the business level, managed to achieve key, you know, milestones and weathered this big global pandemic.

So as you mentioned, I think our health-care units in Mubadala played a role, you know, be it in the testing, be it in the vaccination program, be it in providing the right support to the UAE people. So, you know, as you see the news, I think UAE ranked one of the top, you know, countries when it comes to dealing with COVID, and also in the vaccination program; so two million people vaccinated in the UAE so far out of nine million population. That’s a remarkable success when you benchmark yourself with the—it didn’t come easy, of course. It required a very effective, visionary leadership, and also an ecosystem that could support that response.

So, yes, I think for the health care, life sciences, that’s a very interesting sector that the UAE will continue investing in and will continue also, you know, progress to ensure that we’re ready for any scenarios in the—in the future, plus providing high-quality health care to the UAE and to the region.

JOHN DEFTERIOS: I would say that is the ultimate test, Musabbeh Al-Kaabi, and one that really we probably won’t see again in our lifetime. I hope we do not.

I have to say it’s fantastic to see you again. Last year we did it one on one on the stage. But you did equally as well, if not even better, virtually, Musabbeh Al-Kaabi, the CEO of UAE Investments for the Mubadala Investment Company. Nice to see you.

MUSABBEH AL-KAABI: Thank you, John. Thank you. And we wish everyone all the best, and stay safe.

JOHN DEFTERIOS: Good. Let’s toss it back, Musabbeh, and bring in Fred Kempe, the master of ceremonies, and the presidency of the Atlantic Council.

Fred, thanks again for the invitation. We’ll see you soon.

FREDERICK KEMPE: Thank you so much, John. And thank you, Musabbeh. That was a terrific conversation. Looking forward to seeing you in person next year. It’s a pleasure to have both of you speak once again at the forum, and we’ll be engaging with you more over the next couple of days.

We’ll turn back to Abu Dhabi a little bit later in today’s program. You’ll notice a fair amount of time zone hopscotch this year, but it’s truly what’s making this year’s forum an unprecedented global affair.

We specifically ask you to tune in tomorrow. I was driving in DC today, saw a lot of concrete barriers, fences, National Guard as I went past the Capitol. We’ll be—we’ll be programming before, during, and after the inauguration. We’re very lucky to have Capricia Marshall, the former chief of protocol in the United States, join us during the inauguration. That’s a big job. She’s seen a lot of inaugurations. And you can watch live just as you’re watching now, and we’ll provide some commentary on how the inauguration differs from previous ones—a little bit of history, a little bit of the present, a little bit of feeling what you’re seeing, and it is a historic inauguration for all the reasons you know.

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