Adnoc prepares for the future
The state-owned oil giant is in the midst of an ambitious growth strategy both at home and abroad
STATE-OWNED ABU DHABI NATIONAL Oil Company (Adnoc) is increasingly looking abroad for international markets for its oil and gas and searching for investors at its ramps its operations at home, according to CEO Sultan Al Jaber.
In Al Jaber’s view, Adnoc – which is bucking a worldwide trend of tight spending caps – is ensuring future demand by seeking refineries and other overseas assets. This appetite for global growth extends to liquefied natural gas, LNG, with plans in the works to begin exports once Abu Dhabi becomes selfsufficient for its fuel resources. “We are working on an expansion plan for our LNG facility, which will be supplemented by us exploring other LNG opportunities beyond our borders,” he says.
Much of this expansion, according to Adnoc officials, is driven by foreign demand over the course of the next several decades. Abu Dhabi’s Supreme Petroleum Council has already approved Adnoc’s new integrated gas strategy that is forecast to sustain LNG production through 2040 and allow Adnoc to seize incremental LNG and gas-to-chemicals growth opportunities where they arise.
“The LNG market is projected to grow at a robust pace, fuelled by demand from Asia and developing countries who want access to a clean and affordable source of energy,” says Abdulaziz
Alhaijri, director of Adnoc’s Downstream Directorate. “Adnoc LNG is well positioned to leverage this opportunity and is now modernising its commercial approach from a single-customer to a multi-customer business that includes a number of global utilities as well as portfolio players and traders.”
According to industry experts, LNG is the world’s fastest growing hydrocarbon, with a growth rate of approximately four percent per annum – twice that of natural gas. Globally, LNG is expected to exceed 500 million tonnes per annum by 2035, up from almost 300 million per annum in 2017.
Traditionally, Gulf producers have partnered with foreign companies whose forebears discovered oil in the region some 100 years ago. In the case of Adnoc – which has worked with international partners for over 40 years – the company has received 39 bids for new exploration projects that will be awarded by early next year, according to Al Jaber. The company seeks to boost oil production capacity to five million barrels a day by 2030, up from five million now.
Among the company’s most recent deals were gas-development deals with France’s Total SA and Italy’s Eni, as well as an agreement with Saudi Aramco to explore opportunities in LNG. “Our intent here is to advance our gas portfolio,” Al Jaber notes. As part of the agreement, Adnoc and Aramco will work together to assessment investment opportunities across the LNG value chain.
Investment at home
As Al Jaber notes, Adnoc’s international plans work in tandem with an ambitious strategy to boost its operations domestically. Just last week, for example, the company announced a $1.4 billion investment to upgrade and expand its Bu Hasa field, which is expected to increase crude oil production to 650,000 barrels per day – marking an important step towards the delivery of its 2030 growth strategy.
“This significant investment in the Bu Hasa field will enable production capacity to be increased and generate additional value,” Al Jaber says of the deal. “We are on track to meet our production capacity target of 3.5 million barrels of oil per day by the end of this year – to four million barrels per day by the end of 2020 – and this contract is yet another sign of our clear commitment to making smart investments to maximise the value of
Abu Dhabi’s oil resources.”
rAdnoc CEO Sultan Al Jaber says the companyis working to expand its gas portfolio with international partners