Abu Dhabi’s Supreme Petroleum Council (SPC) approved the Abu Dhabi National Oil Company’s (ADNOC) new integrated gas strategy and its plans to increase its oil production capacity to 4 million barrels per day (mmbpd) at the end of 2020 and 5mmbpd by 2030.
“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," said ADNOC CEO Dr. Sultan Al Jaber.
"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," he added. "While responding to domestic demand, we will maintain our international commercial commitments and seize incremental LNG and gas-to-chemicals growth opportunities."
The SPC’s approval of 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. At its meeting, the SPC announced new discoveries of gas in place, totaling 15 trillion standard cubic feet. It also announced new discoveries of 1 billion barrels of oil in place and approved ADNOC’s new five-year business plan and capital investment growth of $132.33bn between 2019-2023.
Its gas strategy will sustain LNG production to 2040 and allow ADNOC to seize incremental LNG and gas-to-chemicals growth opportunities from the UAE’s demand/supply position and evolving energy mix.
One of the challenges in developing parts of ADNOC’s gas resources is the ‘sourness’ of parts of Abu Dhabi’s gas. However, a number of factors, including the gas pricing reforms introduced in 2016, enabling more market-based pricing, the availability of more advanced technology and ADNOC’s growing and industry leading experience in developing sour gas reservoirs are making it possible for ADNOC to unlock more gas resources and increasing value extraction.
Under the new gas strategy, ADNOC will develop the Hail, Ghasha and Dalma project that taps into Abu Dhabi’s Arab formation, which is estimated to hold multiple trillions of cubic feet of recoverable gas. The project is expected to produce more than 1.5 billion cubic feet of gas per day. ADNOC will also unlock other sources of gas, which include Abu Dhabi’s gas caps and unconventional gas reserves, as well as new natural gas accumulations, which will continue to be appraised and developed as the company pursues its exploration activities.
The SPC is the highest governing body of the oil and gas industry in Abu Dhabi. The Council formulates, approves and oversees the implementation of Abu Dhabi's petroleum policy and follows up its implementation across all areas of the petroleum industry to ensure that the set goals are achieved.
ADNOC’s integrated oil and gas strategy underpins its $44.6bn downstream investment plans announced in May, which will see the company triple production of petrochemicals to 14.4mn tons per annum 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. In addition to being used for power generation and other industrial uses, natural gas is the fuel that powers most chemical and refining processes.
Meanwhile, the announcement of the discovery of significant new oil reserves follows the Abu Dhabi government’s decision 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.