Saudi Aramco launches $1.5bln fund, says energy transition plan flawed

Saudi Aramco launches $1.5bln fund, says energy transition plan flawed

RIYADH - Oil giant Saudi Aramco launched a $1.5 billion fund to support an inclusive global energy transition on Wednesday while Saudi officials said the switch from hydrocarbons could take decades, necessitating continued investment in conventional resources.

Saudi Arabia, the world's top oil exporter, and fellow OPEC producers have warned of underinvestment in fossil fuels especially while spare production capacity is thin and demand relatively healthy despite economic headwinds.

"The current transition plan is flawed honestly. It is not really delivering. What we need is an optimal, realistic transition plan," Aramco CEO Amin Nasser told a business forum, where he announced the new fund managed by Aramco Ventures.

"We need to realise that today alternatives are not ready to shoulder a heavy load of the growing energy demand and therefore we need to work in parallel until alternatives are ready."

The Aramco sustainability fund would target investments globally, with initial focus on areas including carbon capture and storage, greenhouse gas emissions, as well as hydrogen, ammonia and synthetic fuels.

Saudi Arabia and fellow Gulf Arab states have sought to bolster their green credentials. Riyadh last year said the kingdom aims to reach net zero emissions of greenhouse gases, mostly produced by burning fossil fuels, by