Abu Dhabi National Oil Company Announces $132 Billion CAPEX Program, Integrated Gas Strategy and an Increase in Oil Production
The Abu Dhabi National Oil Company’s (ADNOC) announced, today, its plans to launch a new integrated gas strategy and increase its oil production capacity to 4 million barrels per day (mmbpd) by the end of 2020 and 5mmbpd by 2030, following approval from the Supreme Petroleum Council (SPC), the highest governing body of the oil and gas industry in Abu Dhabi. The company also announced capital investment growth of $132.33 billion between 2019-2023 and new discoveries of 1 billion barrels of oil.
ADNOC’s gas strategy will add potential resources that will enable the UAE to achieve gas self-sufficiency, with the aim of potentially transitioning to a net gas exporter. ADNOC also announced new discoveries of gas, totaling 15 trillion standard cubic feet (tscf). The gas strategy will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities, where they arise, from the UAE’s dynamic demand-supply position and evolving energy mix.
Speaking at the annual SPC meeting, H.E. Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “Our historic gas self-sufficiency strategy marks an important new, accelerated phase in the delivery of ADNOC’s 2030 growth strategy. We will continue to unlock and deliver increased and commercially viable production from our oil and gas reserves, in response to the world’s growing demand for energy.
“The incremental increase in our oil production capacity will enable ADNOC to continue to be a reliable and trusted energy supplier that has the flexibility and capacity to respond and capitalize on the forecasted growth in demand for crude.”
“At the same time, the substantial investments we will make, in the development of new and undeveloped reservoirs, gas caps and unconventional resources, will ensure we can competitively meet the UAE’s growing demand for power generation and industrial use while maintaining our international commercial commitments and seizing incremental LNG and gas-to-chemicals growth opportunities,” H.E. Dr. Al Jaber added.
ADNOC’s integrated oil and gas strategy underpins its $45 billion downstream investment plans, announced in May, which will see the company triple production of petrochemicals to 14.4 million tons per year by 2025. In May, at its Downstream Investment Forum, ADNOC unveiled a blueprint to create the world’s largest integrated refining and petrochemicals complex in Ruwais, which will enable it to further stretch the value of every barrel it produces.
The discovery of significant new oil reserves endorses the Abu Dhabi government’s decision, earlier this year, to open six geographical oil and gas blocks for competitive bidding. Based on existing data from detailed petroleum system studies, seismic surveys, log files and core samples from hundreds of appraisal wells, estimates suggest these new blocks hold multiple billion barrels of oil and multiple trillion cubic feet of natural gas. The first exploration and production licenses are expected to be awarded in the first quarter of 2019.
The licensing strategy represents a major advance in how Abu Dhabi unlocks new opportunities and maximizes value from its hydrocarbon resources. It is also consistent with ADNOC’s approach to expanding its strategic partnerships across all areas of its business. The successful bidders will enter into agreements granting exploration rights and, provided defined targets are achieved in the exploration phase, be granted the opportunity to develop and produce any discoveries with ADNOC, under terms set out in the bidding package.
Industry projections, H.E. Dr Al Jaber highlighted, validate ADNOC’s integrated oil and gas strategy. For the first time, the world is on the verge of consuming 100 million barrels of oil per day, with oil consumption increasing by an additional 10 million barrels per day by 2040, he said. Over the same period, demand for natural gas will increase by 40 percent, while the market for higher-value polymers and petrochemicals will grow by 60 percent.