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UAE’s largest oil company, Abu Dhabi National Oil Company (ADNOC) will accelerate its transformation program to reduce costs and unlock value, its group CEO, Sultan Al Jaber, said.
Al-Jaber, while speaking at the opening keynote address of the 36th edition of the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), said digitalization has saved the UAE national oil company $3 billion over the last four years.
“We have saved $1 billion over the past four years leveraging the big data through our Panorama command centre. We have captured an additional $2 billion by adopting digital drilling,” he said during the virtual conference.
The ADNOC chief said the oil giant unlocked more than $25 billion in value this year despite a difficult year for the global economy.
“ADNOC used the UAE’s and Abu Dhabi’s status as trusted business-friendly environment to complete several landmark transactions. We inked a $20 billion pipeline deal and unlocked $5.5 billion in value from our real estate assets. These deals were struck in the most difficult year for the global economy in recent memory,” he said.
Focus on trading
ADNOC is also seeking to unlock value through trading having completed its first derivative trade in September.
“Next month [December 2020] we will begin trading the full portfolio of our refined products. The first quarter of 2021 will see the launch of ICE Futures Abu Dhabi. It will be the first exchange to introduce futures contract based on Abu Dhabi’s popular Murban grade,” Al Jaber said.
On the climate change front, ADNOC has set ambitious targets to reduce carbon intensity over the next 10 years.
ADNOC is one of the least carbon-intensive producers in the world, according to its CEO.
“In the next 10 years, we will reduce our Green House Gas intensity by further 25 percent. We are expanding our carbon capture programme so that it stores five million tonnes of CO2 every year, and we will also explore the potential of new fuels such as hydrogen," he said.
The current conditions have also opened up downstream expansion opportunities. Al Jaber said that the company’s joint venture with ADQ would serve as “an investment vehicle for partners” to join the company in accelerating the development of petrochemicals and derivatives industry in Abu Dhabi.
Resilience of oil demand
He emphasized the importance of the oil and gas industry in enabling economic development in the post-COVID-19 recovery by ensuring a steady and reliable supply of energy to power growth.
“For a start, we know the world will still need oil and gas when all of this is done. Even at the height of the lockdowns of March and April the world still consumed 75 million barrels of oil per day. In fact, by our estimates, oil demand fell below 90 million barrels of oil per day for only 12 weeks. So, we know the world still needs oil and gas. That is a fact,” he said.
The oil giant’s chief is confident that the long-term fundamentals of the industry remain intact, though the months ahead will be challenging, and oil demand may fluctuate.
“We expect that oil demand will grow to over 105 million barrels per day by 2030 and continue to supply over half the world’s energy needs for many decades to come. At the same time, the petrochemicals sector will continue to grow at a healthy pace through and beyond 2050, in line with a steadily expanding global middle class. These are long-term positive trends and they highlight the central role that our industry can and should play in a post-Covid recovery,” Al Jaber said.
(Writing by Anoop Menon; editing by Seban Scaria)
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