The board of Abu Dhabi's ADNOC has approved plans to bring forward the company's five million barrel per day (bpd) oil production capacity expansion to 2027 and plough in investments worth AED550 billion ($150 billion) to power up its strategy.
ADNOC produces some of the world’s least carbon intensive oil and this new target is expected to provide the company with greater flexibility to meet rising global energy demand.
The accelerated production capacity target is underpinned by the UAE’s strong hydrocarbon reserves, which have increased by 2 billion stock tank barrels (STB) of oil and 1 trillion standard cubic feet (TSCF) of natural gas this year, the oil behemoth said in a statement released on Monday evening.
These additional reserves increase the UAE’s reserves base to 113 billion STB of oil and 290 TSCF of natural gas, reinforcing the country’s position in global rankings as the custodian of the sixth-largest oil reserves and the seventh-largest gas reserves, it said.
UAE President Sheikh Mohamed bin Zayed Al Nahyan, on Monday presided over the annual meeting of the ADNOC Board of Directors. The board endorsed the creation of ‘ADNOC Gas’, a new world-scale gas processing and marketing company, effective 1 January 2023.
The company will combine the operations, maintenance and marketing of ADNOC Gas Processing and ADNOC LNG into one consolidated entity. ADNOC will proceed with an initial public offering (IPO) of a minority stake in the new company on the Abu Dhabi Securities Exchange (ADX) in 2023, subject to applicable regulatory approvals.
While the business plan and capital expenditure (CAPEX) of AED550 billion ($150 billion) for 2023-2027 was approved to enable the accelerated growth strategy, as part of this plan, ADNOC aims to drive AED175 billion ($48 billion) back into the UAE economy through its In-Country Value (ICV) program.
Net Zero by 2050
ADNOC’s ICV program has driven more than AED35 billion ($9.54 billion) back into the nation’s economy and enabled 2,000 UAE nationals to be employed in the oil behemoth’s supply chain in 2022.
These achievements bring the total value driven back into the economy to AED140 billion ($38 billion) since the program was launched in 2018. In addition, a total of 5,000 UAE Nationals have been employed in ADNOC’s supply chain through the program since it was launched, ADNOC said.
ADNOC is also supporting the ‘Make it in the Emirates’ initiative and has signed agreements for local manufacturing opportunities worth over AED25 billion ($6.8 billion) with UAE and international companies this year, as it delivers on its target to locally manufacture over 100 products in its procurement pipeline worth AED70 billion ($19 billion) by 2030, the statement said.
The board directed ADNOC to pursue a Net Zero by 2050 ambition to support the UAE Net Zero by 2050 Strategic Initiative.
Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said: "Through our Net Zero by 2050 ambition, we are placing sustainability at the center of our growth, building on the legacy of the Founding Father of the UAE, His Highness Sheikh Zayed bin Sultan Al Nahyan, who laid the foundation for ADNOC to become one of the least carbon intensive oil and gas producers in the world.
“The world needs maximum energy, minimum emissions and it needs all the energy solutions if we are to ensure global energy security. ADNOC is committed to making today’s energy cleaner while investing in the clean energies of tomorrow to strengthen our position as a reliable and responsible energy provider. As we deliver on these objectives, we will continue to drive greater and more sustainable value for the UAE, create opportunities for the private sector to benefit from ADNOC’s growth and enable more skilled job opportunities for UAE Nationals.”
ADNOC recently set a new upstream methane intensity target of 0.15% by 2025. It is also leveraging its partnerships to invest in and integrate low-carbon technologies and solutions to ensure a cost-effective decarbonization pathway.
(Writing by Seban Scaria; editing by Daniel Luiz)