meed-logo

line1 line2 line3
SIGN IN / REGISTER

Bright outlook for carbon capture investment

20 October 2023

 

Commenting publicly this week, officials from some of the world’s biggest publicly traded international oil companies (IOCs) and national oil companies (NOCs) have made it clear that one of their preferred sustainable technologies is carbon capture.

Ahead of the Cop28 climate change conference due to start in the UAE at the end of November, senior figures from several high-profile oil companies made the promotion of carbon capture and storage (CCS) technology a key part of their messaging.

The appeal of carbon capture technologies to oil and gas companies, which see this technology as a way to extend the life of their existing facilities, is likely to translate directly into investments in the technology.

Great solution

Speaking at an oil and gas conference in London, Ahmad al-Khowaiter, executive vice-president of technology and innovation at Saudi Aramco, said he thought carbon capture was a “great solution” for the oil and gas industry as it could be applied to the existing industry to ensure that facilities do not have to be shut down for environmental reasons.

He said the technology could potentially mean the “tremendous investment” already made in existing facilities would not have to go to waste.

Al-Khowaiter spoke about carbon capture a day after the chief executive of Aramco, Amin Nasser, talked about CCS and urged world leaders to shift their focus away from goals that limit oil production in favour of goals that focus purely on limiting emissions.

“The idea is we need to reduce emissions [and] build more carbon capture and storage,” he said, calling for leaders to give more incentives to the conventional energy sector to implement CCS technologies.

He added: “The focus should be on reducing emissions. Incentives should not only be for renewables; they should be for supporting conventional energy and supporting carbon capture.

“We cannot meet our net-zero 2050 [target] without carbon capture and storage, so some incentives should go to carbon capture and storage.”

Nasser also said: “We need to work in parallel … not to call for shutting down our conventional energy today, increasing the prices and costs for everybody around the world.”

CCUS investment

Similarly, Nawaf al-Sabah, deputy chairman and chief executive of state-owned Kuwait Petroleum Corporation (KPC), commented on the significant planned investments in carbon capture, utilisation and storage (CCUS).

KPC aims to cut its Scope 1 and Scope 2 emissions to zero by 2050 and plans to invest $110bn in decarbonisation as part of its long-term plan for the oil sector.

Referring to the planned cuts to Scope 1 and 2 emissions, Al-Sabah said: “A big portion of that will be through CCUS. I think that is one of the technologies that we all, as humanity, need to invest in because it removes carbon that would otherwise dissipate into the atmosphere.”

In the case of KPC, it plans to take carbon from its refineries and inject it into its oil and gas reservoirs to stimulate production.

Critical technology

The enthusiasm for carbon capture from the NOCs was equalled by senior executives from publicly traded IOCs, who also said they were looking to invest heavily in the technology.

Richard Jackson, president of US onshore resources and carbon management at Occidental, said CCS was “central” to his company’s strategy.

Shell’s CEO, Wael Sawan, described carbon capture technology as “critical for the future of the decarbonisation journey”.

Problematic issues

Despite the enthusiasm from oil companies, it remains to be seen whether carbon capture technologies are the best way to invest capital to achieve effective emissions reductions.

This is mainly due to challenges with effectively scaling the technology, as well as issues relating to the technology’s business model.

One of the problematic aspects of a carbon capture business model has been clearly illustrated by Saudi Arabia’s Jafurah blue hydrogen plant project.

Engineering is nearly completed for this project, which is estimated to be worth around $1bn and will use carbon capture technology to remove carbon emissions from a facility that will produce hydrogen by processing natural gas.

Despite the project nearly being ready for the final investment decision, Aramco has warned that it is struggling to find offtake agreements for the product produced by the plant due to high pricing.

Aramco has asked governments in South Korea and Japan to step in to subsidise the use of blue hydrogen to make the project viable, and says it will not approve the project for execution until offtake agreements have been signed.

Economically challenged

This comes as some critics say that investments in carbon capture compare poorly to other decarbonisation solutions that use technologies proven to work at scale with functioning business models.

In a report published earlier this year, the consultancy McKinsey said: “Many, if not most, CCUS projects are economically challenged today, with high costs of capture for dilute point sources and a limited number of revenue streams available.”

While it remains unclear whether or not carbon capture is the most effective way of spending money to reach a net-zero world, oil companies have made it clear that it is one of their preferred technologies.

The fact that it could potentially allow oil companies to continue broadly using their conventional business models and existing facilities should mean that this technology receives significant funding from the oil and gas sector over the coming years.

https://image.digitalinsightresearch.in/uploads/NewsArticle/11232883/main.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Taqa raises $750m to finance water projects

    30 July 2026

    Abu Dhabi National Energy Company (Taqa) has issued a $750m five-year blue bond to finance sustainable water and wastewater management projects.

    The company said the transaction is the largest blue bond issuance in the Europe, Middle East and Africa region. It is also the largest blue bond issued by an integrated power and water utility globally.

    Issuing the bond allows Taqa to raise money from investors specifically to support water-related environmental projects. These can include desalination, wastewater treatment, water recycling and reuse, and infrastructure that improves water efficiency.

    It is the first blue bond issued under Taqa’s Green and Blue Finance Framework, and follows another blue financing transaction in the UAE earlier this year.

    On 8 January, Dubai-based Emirates NBD bank announced the completion of a $1bn dual-tranche sustainable bond issuance, comprising a $300m blue tranche with a three-year tenor and a $700m green tranche with a five-year tenor.

    Emirates NBD said at the time that the $300m tranche was the largest blue bond issued in the UAE and GCC. The proceeds are intended to support marine conservation and sustainable water projects, while proceeds from the green tranche will finance green initiatives.

    Taqa launched its original Green Finance Framework in 2023 and updated it in 2026 to include blue financing instruments. The latest issuance takes its total green and blue labelled bond issuances to $2.6bn since 2023.

    The Taqa financing also comes as the company expands and modernises its water infrastructure. Taqa is targeting reverse-osmosis technology for 66% of its desalination capacity by 2030, up from about 40% in 2025.

    In June, Taqa awarded a contract for the construction of a 1-million-cubic-metre emergency lagoon in Abu Dhabi. The project will be developed in two phases.

    Phase one has a capacity of 500,000 cubic metres and is planned to be completed within 18 months of the contract award.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17845953/main.jpg
    Mark Dowdall
  • UAE renewables firm secures $375m in financing

    30 July 2026

    Positive Zero, the UAE-based renewable energy firm, has announced the successful closing of a financing facility of up to $375m.

    The long-term financing was arranged by Paris-headquartered Natixis Corporate & Investment Banking (Natixis CIB) and Saudi Arabia-based The Arab Energy Fund.

    Natixis CIB also acted as financial adviser, facility agent, security agent and green loan coordinator for the transaction.

    “The non-recourse financing is the first transaction of its kind in the region for a diversified portfolio of decentralised infrastructure assets, including distributed solar power generation, energy efficiency and clean mobility solutions,” Positive Zero said in a statement.

    “The financing will provide substantial long-term capital to support Positive Zero’s continued expansion in the United Arab Emirates, Saudi Arabia, Bahrain, Oman and Qatar, funding the growth of its distributed infrastructure portfolio, capital expenditure programme and strategic development initiatives,” the Dubai-based firm said.

    The new debt facility secured by Positive Zero builds on US-based BlackRock’s investment of up to $400m in the company in 2023, “further strengthening the company’s capital structure and supporting the next phase of its growth”.

    Positive Zero has the largest distributed solar capacity in the region with more than 500MW in operations and under construction, avoiding more than 450,000 metric tonnes a year of carbon emissions.

    The company has also saved over 100 million kilowatt-hours (kWh) in energy consumption across its client portfolio through its energy-efficiency solutions.

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17845491/main3835.jpg
    Indrajit Sen
  • US-Saudi consortium to build $5bn refinery outside Strait of Hormuz

    30 July 2026

    Register for MEED’s 14-day trial access 

    A consortium of privately owned US and Saudi companies has announced an investment commitment of $5bn to build an integrated oil refining, storage and export facility outside the volatile Strait of Hormuz shipping lane.

    After three years of evaluating sites across the Gulf, the consortium has shortlisted three GCC locations beyond the Strait of Hormuz. Discussions have advanced over the past two years, with a preferred site expected to be selected by the end of 2026.

    The consortium, Mera Oil, comprises Fort Worth, Texas-based MWG Enterprises; the US-based Patel Family Office; and PWS, an associate company of Saudi Arabia’s AHQ Group.

    Mera Oil said it remains open to alternative proposals that meet its infrastructure, resilience and development requirements.

    The proposed project will feature a 200,000-barrel-a-day refinery, deepwater port connectivity, large-scale crude and refined-product storage, and marine export facilities.

    A pre-feasibility study covering refinery design, logistics, capital requirements and execution planning is at an advanced stage.

    Once a host jurisdiction is confirmed, the project will proceed to detailed site assessments and engineering design, with mechanical completion targeted for end-2029, followed by commissioning and the start of commercial operations.

    The consortium plans to focus on producing high-specification middle distillates, including ultra-low sulphur diesel and jet fuel, for selected international markets.

    The project is expected to occupy about 1,200-1,500 acres of port-connected industrial land and could create up to 3,000 direct jobs, and around 15,000 indirect and induced jobs, during construction and operations.

    Mera Oil is also progressing discussions with feedstock suppliers and expects financing to include sponsor equity, sovereign and institutional investment, project finance, export-credit support and sharia-compliant funding structures.

    “Designed as a route-resilient energy hub, the development aims to strengthen regional manufacturing, logistics, technical expertise and energy security,” Mera Oil said.

    The first phase of the planned investment will “incorporate energy-efficient refining technologies, emissions-control systems, and potential future capabilities including sustainable aviation fuel co-processing and carbon management.”

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17843946/main.jpg
    Indrajit Sen
  • Local contractor to build nine Bahrain substations

    30 July 2026

     

    Bahrain’s Electricity & Water Authority (EWA) has awarded the local Al-Kooheji Electrical a contract to build nine 66kV substations across the kingdom, according to a source.

    The project is estimated to be worth $110m and is intended to support rising electricity demand from Bahrain’s domestic, commercial and industrial sectors.

    Four local contractors submitted commercial bids for the contract in January. The bidders were:

    • Nass Contracting ($28.4m)
    • Poullaides Construction Company ($31.7m)
    • Mohammed Jalal Contracting ($32.4m)
    • Al-Kooheji Electrical ($34m)

    The substations will be located at South Hidd Industrial, Mondelez, Alba Downstream Park, Muharraq North, Hamala West, Bani Jamra, Hoora, Maqabah East and West Riffa Club.

    The scope includes the construction of the nine substations and control rooms, as well as the installation of transformers, switchgear and feeders connecting the facilities to the grid.

    It also covers communication cabling, monitoring systems, safety and security systems, and associated civil and structural works.

    As MEED understands, the substations are scheduled to be commissioned in stages. Two are planned for 2026, followed by four in 2027 and the remaining three in 2028.

    Serbia’s Energoprojekt Entel was appointed as consultant for the project in April 2025. The consultant’s contract was valued at about $460,000.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17834380/main.jpg
    Mark Dowdall
  • CB&I’s newly acquired unit wins Abu Dhabi wells contract

    30 July 2026

    US-based Chicago Bridge & Iron (CB&I) has announced that its Asset Solutions business – acquired earlier this year from UK-headquartered contractor Petrofac – has won a hydrocarbon well services contract in Abu Dhabi.

    The contract was awarded by Cosmo E&P Albahriya, a wholly owned UAE-based subsidiary of Japan’s Cosmo Energy Holdings Company (Cosmo).

    Under the well engineering services contract, CB&I Asset Solutions will support drilling, engineering, planning and operational activities for offshore Block 4 in Abu Dhabi.

    Cosmo secured 100% exploration rights for offshore Block 4 – covering 4,865 square kilometres of Gulf waters northwest of Abu Dhabi city – in February 2021.

    The block was offered in Abu Dhabi’s second hydrocarbons block competitive bidding round, launched by Abu Dhabi National Oil Company (Adnoc) in May 2019.

    “The award strengthens Asset Solutions’ position in the Middle East and solidifies new relationships with key regional operators. With shared goals of prioritising safe, stable and environmentally conscious production, CB&I’s UAE-based team will draw on its local and global experience of delivering innovative well engineering solutions,” the Texas-based CB&I said in a statement.

    ALSO READ: Abu Dhabi awards production licences for hydrocarbon blocks

    READ THE AUGUST 2026 MEED BUSINESS REVIEW – click here to view PDF

    Saudi Arabia builds for the global stage; Rising uncertainty creates fresh set of challenges in the Maghreb; Gulf banks remain robust in the face of geopolitical tensions.

    Distributed to senior decision-makers in the region and around the world, the August 2026 edition of MEED Business Review includes:

    > MARKET FOCUS: Maghreb fortunes diverge
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17834142/main4710.jpg
    Indrajit Sen