The board of the Abu Dhabi National Oil Company, under the chairmanship of Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, approved plans to spend Dh466 billion ($127bn) between 2022 and 2026, of which Dh160bn will be directed towards the local economy by the state energy producer.
Adnoc's board, which gave a nod to the company's five year business plan on Wednesday, also announced a "significant" increase in national reserves of 4 billion stock-tank barrels (STB) of oil and 16 trillion standard cubic feet of natural gas.
These additional reserves increase the UAE’s hydrocarbon reserves base to 111 billion barrels of oil and 289 trillion scf of natural gas, Adnoc said in a statement, after Sheikh Mohamed presided over the company's board meeting.
The new discoveries have reinforced the country’s position as holder of the world's sixth-largest oil reserves and the seventh-largest gas reserves. The UAE will continue to responsibly unlock its hydrocarbon resources to drive progress and contribute to global energy security, Sheikh Mohamed said.
Around half of the newly added 4 billion barrels of national oil reserves are Murban-grade crude, Abu Dhabi’s lower-carbon crude grade which has been trading on the ICE Futures Abu Dhabi (IFAD) commodities exchange since March 2021.
The latest increase in national reserves follows Adnoc's announcement last year of the discovery of recoverable unconventional oil resources estimated at 22 billion barrels and an increase in conventional oil reserves of 2 billion barrels. In 2019, Adnoc announced national reserve increases of 7 billion barrels of oil and 58 trillion scf of conventional gas and the discovery of unconventional recoverable gas resources totalling 160 trillion scf.
Adnoc's five-year business plan will help it expand its upstream production capacity and downstream portfolio, as well as its low carbon fuels business and clean energy ambitions.
The company's plans to drive more than Dh160bn back into the UAE economy over the next five years through its ICV programme will help grow and diversify the economy and support the objectives of the UAE's "Principles of the 50", Adnoc said.
Since 2018, Adnoc has driven Dh105bn back into the UAE economy and created more than 3,000 jobs for UAE nationals in the private sector, including 1,000-plus jobs this year alone, the company said.
Adnoc's board also approved its "New Energies Strategy" aimed at further reducing its carbon footprint and enabling it to capitalise on opportunities in renewable energy, hydrogen and other lower carbon fuels.
“We have laid a solid foundation to ensure Adnoc continues to drive greater and more sustainable value for the UAE during the energy transition," Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and Adnoc managing director and group chief executive, said.
"As we build on this foundation, we are capitalising on the many commercial opportunities in this era while strengthening our position as one of the lowest-cost and lowest-carbon oil and gas producers in the world."
Adnoc plans to establish a ‘hydrogen ecosystem’ as it looks to meet growing global demand for the lighter and cleaner gas that is emerging as an alternative to fossil fuels.
In January, Adnoc, Mubadala Investment Company and ADQ formed an alliance to develop a hydrogen economy in the country, focusing on low-carbon green and blue hydrogen as part of the Emirates' continued energy diversification efforts.
Adnoc is also partnering with Abu Dhabi's energy company Taqa to form global renewable energy and green hydrogen venture that will have a generating capacity of 30 gigawatts by 2030. The two companies will partner on domestic and international renewable energy and waste-to-energy projects, as well as the production, processing and storage of green hydrogen.
Hydrogen has become increasingly important as a viable alternative fuel in many global economies as they evaluate its potential as an alternative to hydrocarbons. Proponents and producers of hydrogen are also looking at ways to lower the element's carbon intensity since it is currently manufactured using large volumes of fossil fuel.
The UAE also plans to invest $160bn over the next three decades to hasten renewable energy development, as it is targeting carbon-neutrality by 2050. The UAE will also host Cop28 in 2023 as it aims to take the lead in energy transition in the region.
Adnoc's business plan and its new energies strategy marks an "important phase in our ongoing journey to future-proof our business model", Dr Al Jaber said.
"We are confidently moving forward to deliver upstream growth, accelerate the UAE’s industrial development through our downstream expansion, build our trading capabilities and advance our position in hydrogen and clean energy," he said.
The company at the same time is creating opportunities for the UAE’s private sector to benefit from Adnoc's growth and enabling more skilled job opportunities for UAE national talent, Dr Al Jaber said.
As part of its 2030 strategy, Adnoc aims to remain one of the lowest-cost producers and lowest carbon emitters in the oil and gas industry as it increases its crude production capacity. It plans to achieve gas self-sufficiency for the UAE, expand its downstream business and strengthen its trading capabilities.
The state oil producer plans to significantly increase its investment in hydrocarbons and will raise its output capacity to 5 million barrels per day by 2030.
In October, Adnoc said it would meet up to 100 per cent of its power requirements from solar and nuclear sources after signing an agreement with the Emirates Water and Electricity Company, in line with the UAE's recent pledge to reach net zero by the middle of the century.
The Adnoc board, which met at the UAE pavilion at Expo 2020 Dubai, also endorsed company plans to evaluate doubling its liquefied natural gas (LNG) production capacity to 12 million metric tonnes per annum, as part of its downstream and industry strategy.
The potential expansion of Adnoc's LNG production capacity is underpinned by the growth in its natural gas position, with new developments planned to add 3 billion scfd and more to come from associated gas as it expands its crude oil production capacity, Adnoc said.
The board reviewed the progress of Adnoc's Ta’ziz Industrial ecosystem in Abu Dhabi's downstream hub of Ruwais and the strong local and international investor interest it has received, particularly in the Ta’ziz Industrial Chemicals Zone, a joint venture with ADQ.
The project is a key pillar of Adnoc's downstream and industrial expansion strategy and is helping to accelerate the development of Abu Dhabi’s petrochemicals and manufacturing industry. Anchor projects for the chemicals zone are already in the design phase and international partners, such as Reliance Industries, Fertiglobe, GS Energy and Mitsui, have already announced partnership's with Ta’ziz.
Adnoc earlier this year listed shares of Adnoc Drilling on Abu Dhabi's stock exchange and announced the initial public offering of the world’s biggest shareholder-owned exporter of fertiliser, Fertiglobe. It also announced the conclusion of Abu Dhabi’s second exploration block bid round and the signing of a $6.2bn strategic partnership with Borealis to build Borouge 4 in Ruwais, earlier this year.