Adnoc to put Dh160bn into UAE economy over the next five years

The SPC approves Dh448bn capex plan and announces discovery of 22 billion barrels of unconventional reserves

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  The UAE has continued to attract foreign investment during the pandemic, with Adnoc agreeing a $20.7bn deal in June for a group of global asset managers to acquire leasing rights to parts of its gas pipeline network. Wam

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  An Adnoc drilling rig in action. The company has achieved $2bn in savings over the past five years through the deployment of technology. Courtesy: Adnoc

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  Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces (R), is updated on the progress of Adnoc's downstream projects in Ruwais. Mohamed Al Hammadi / Ministry of Presidential Affairs

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  Adnoc group chief executive and Minister of Industry and Advanced Technology, Dr Sultan Al Jaber has overseen a transformation of the company into a more commercially-focused organisation since he took on the role in early 2016. Image: Adnoc

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  Adnoc refining operation in Ruwais. Courtesy: Adnoc

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  Adnoc has been able to maximise the value of its assets including of its refining operations. Image: Adnoc

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  An Adnoc LNG facility. Image: Adnoc

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  Adnoc's Virtual Energy Centre is available to students and public interested in learning about the company. Image: Adnoc

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  Fuel retailer Adnoc Distribution has expanded the number of its service stations. Image: Adnoc Distribution

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  Adnoc Distribution, the UAE’s largest fuel and convenience retailer, reported a 22% increase in third quarter profit as it nearly halved costs. Image: Adnoc

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  Adnoc's real time data monitoring centre lowered well duration by 30 per cent leading to cost savings of around $1bn. Khushnum Bhandari / The National

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  Adnoc HQ on Abu Dhabi's Corniche. On Sunday, Abu Dhabi's Supreme Petroleum Council also approved the award of new oil and gas exploration blocks under a second competitive licensing round. Image: Adnoc

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  Adnoc HQ. Reuters

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  Adnoc staff during a diving at the Adnoc Logistics and Services Maritime Logistics Base in Mussafah in Abu Dhabi. Pawan Singh / The National

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  Adnoc vessels. Pawan Singh / The National

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  Equipment at the Oil Spill Response warehouse at the Adnoc Logistics and Services Maritime Logistics Base in Mussaffah in Abu Dhabi. Pawan Singh / The National

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  Schlumberger's operations base in the ICAD II area of Mussaffah in Abu Dhabi. Schlumberger, G42 and AIQ plan to work to identify pilot projects that have the potential to be commercialised. Christopher Pike / The National

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  The Panorama Command Centre at Adnoc's headquarters in Abu Dhabi. Adnoc formed a joint venture with G42 in October to develop and commercialise AI products for the energy industry. Khushnum Bhandari / The National

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  ADNOC's Panorama Digital Command Center. Courtesy Adnoc

The Supreme Petroleum Council approved Abu Dhabi National Oil Company's plans to spend Dh448 billion ($122bn) over the next five years, of which Dh160bn will be directed towards the local economy. 
Abu Dhabi's SPC also announced the discovery of "substantial recoverable unconventional oil resources" onshore, estimated at 22 billion barrels, and an increase in conventional oil reserves of 2 billion barrels.

During an online meeting of the SPC, presided over by Crown Prince Sheikh Mohamed bin Zayed, the council also approved the award of new oil and gas exploration blocks under the second competitive licensing round. Adnoc is now set to announce the winners.

"The discovery of recoverable unconventional oil resources demonstrates how Adnoc is efficiently expediting the exploration and development of Abu Dhabi’s unconventional resources and marks a major milestone," said Dr Sultan Al Jaber, Adnoc group chief executive and Minister of Industry and Advanced Technology.

"The increase in the UAE’s conventional oil reserves sends a strong signal that Adnoc is leaving no stone unturned in unlocking value from our abundant hydrocarbon resources to ensure the UAE remains a long-term and reliable energy provider to the world for decades to come."

The 22 billion barrels of unconventional oil exceeds some of Abu Dhabi’s major fields in terms of reserves and the production potential "ranks alongside the most prolific North American shale oil plays", Adnoc said.

The reserves assessment was supported by extensive well data as well as a dedicated appraisal programme by Adnoc in an area covering 25,000 square kilometres onshore in Abu Dhabi.

The 2 billion barrels increase in conventional reserves strengthens the UAE's position as the holder of the world's sixth largest oil reserves.

The increase in reserves is a result of the progress being made on Adnoc's 5 million barrels per day oil production capacity target by 2030, and its appraisal activities, particularly in the Al Nouf field.

Dr Al Jaber thanked Sheikh Mohammed and the council for their "support and guidance  ... in steering Adnoc through a very challenging year where we have had to navigate Covid-19 and volatile energy markets".

Opportunities for job creation and the UAE's private sector

As a result of this and its transformation to a more commercially-focused company over the past four years, Adnoc has delivered "robust operational and financial performance", he said.
The planned capex increase "will contribute to achieving growth and expansion in exploration and development, production, gas, refining and petrochemicals, and supporting and developing the company's capabilities in the field of product marketing and trading," Adnoc said in a statement.

The Dh160bn for the UAE economy is "aimed at nurturing new local and international partnerships and business opportunities for the private sector, fostering socio-economic growth and creating job opportunities for Emiratis", it said.

It will create opportunities for local businesses and private-sector jobs for Emiratis, said Dr Al Jaber.

The Dh160bn will be spent through Adnoc's In-Country Value programme which has put more than Dh76bn into the UAE’s economy and created over 2,000 private-sector jobs for Emiratis since it was launched in January 2018. Adnoc said its new ICV goal will enable "the localisation of strategically critical parts of the oil and gas value chain and create more private-sector jobs for Emiratis".

Adnoc to explore opportunities in hydrogen

Sheikh Mohamed on Sunday also approved Adnoc's plans for a  ‘hydrogen ecosystem’ in order to meet growing global demand for the lighter, hydrocarbon-alternative fuel.

Adnoc's plans to ramp up production of hydrogen, which is already used in its downstream sector, will help meet "emerging global demand" as well as ammonia derived from natural gas.
"Adnoc is well placed to lead the development of international value chains and establish a hydrogen ecosystem for the UAE in partnership with other Abu Dhabi entities," the company said in a statement.
Saudi Arabia, the world's largest oil exporter, is also putting together a strategy to develop hydrogen production capabilities as it looks for newer, alternative fuels to be part of its energy mix, according to the country's energy minister.