Current production capacity is around 4 million b/d
ADNOC to pursue clean energy alongside 2030 goal
Company will also look at downstream investments, partnerships with investors
Abu Dhabi National Oil Co, the UAE’s biggest energy producer, is on track to boost its oil production capacity to 5 million b/d by 2030 despite the coronavirus pandemic’s impact on demand and energy transition trends, its CEO said Oct. 14.
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“I am confident to say that this production capacity goal remains our 2030 strategy and again based on our assessment that the world will still need significant supplies of oil and gas as the global economy grows over the next several decades,” Sultan al-Jaber told the Energy Intelligence Forum.
“At the same time, in the short term, we in the UAE and in ADNOC in particular, we are keeping a close eye on the impact of the new COVID-19 restrictions and how that would potentially reflect on the strength or speed of economic recovery.”
ADNOC ramped up its production capacity to 4 million b/d in April this year during the pandemic outbreak and amid the price war between Saudi Arabia and Russia. The UAE is OPEC’s third-largest oil producer.
Jaber said he was “cautiously optimistic” about the global oil outlook, with market having tightened since April and the long-term outlook for oil and gas remaining “very robust.”
The International Energy Agency said Oct. 13 that oil demand would not recover to pre-pandemic levels before 2023 and could be pushed back to 2025 under “a delayed recovery scenario” from the virus.
The Paris-based organization also expects global oil demand to plateau from 2030.
However, OPEC is forecasting a recovery in 2022, and no peak demand for oil before 2040.
Sultan’s outlook echoes the views of UAE energy minister Suhail al-Mazrouei who told the forum Oct. 13 “the worst is over” for oil markets.
ADNOC will achieve its 2030 goal production capacity goal while keeping its costs and carbon intensity low, Jaber added.
The state-owned company is looking at hydrogen and other clean energy sources, a position that does not conflict with its 2030 production capacity goal, Jaber said.
“Within the UAE we don’t see this as conflict of interest whatsoever,” he said. “On the contrary we see it as a natural extension. We find this as a logical step for us to pursue clean energy.”
Jaber has previously said ADNOC plans to lower its greenhouse gas emissions intensity by 25% by 2030.
The company would also continue to develop its downstream sector, Jaber added, by developing refinery and petrochemical projects in the industrial city of Ruwais. ADNOC revealed in 2018 plans to invest $45 billion with partners to develop its domestic downstream activities.
ADNOC will also continue to pursue partnerships with investors that “will allow us to generate new value streams for us to reinvest in higher value, higher return projects,” he said.
In June, ADNOC inked a deal worth more than $10 billion with a group of investors to sell a 49% stake in its gas pipelines a year after striking a similar transaction for its oil pipelines. The investors are Global Infrastructure Partners, Brookfield Asset Management, Singapore’s sovereign wealth fund GIC, Ontario Teachers’ Pension Plan Board, South Korea’s NH Investment & Securities and Italy’s Snam.
ADNOC also last year clinched a $5 billion deal with a consortium that includes GIC, BlackRock Inc., KKR & Co and Abu Dhabi Retirement Pensions and Benefits Fund, to sell them select pipeline infrastructure and collectively hold a 49% stake in ADNOC Oil Pipelines, a subsidiary of the parent company.