As the renewable energy sector gains momentum among the litany of nations all hoping to reach their clean energy targets by the end of the decade, some countries, like the UAE, are putting most of their chips on the roulette table that is the traditional gas and oil sectors. The United Arab Emirates has boosted investment in midstream and downstream infrastructure, leading to a new hope for the conventional energy generation methods that have served mankind so well over the past hundred years or so.
ADNOC is standing firm in the face of an energy revolution, detailing plans to expand gas and oil operations
Abu Dhabi’s state-owned energy company, ADNOC, has revealed that the company is holding its ground amid the calls for more renewable energy projects around the world. The company has detailed its plans to increase crude production capacity to 5mn b/d by 2027. This comes despite the recent announcement that the lower-than-expected oil prices last year are set to continue this year, and possibly into 2026 too.
The jewel of the UAE energy industry reported in May of last year that its maximum sustainable capacity had reached 4.85 million b/d, slightly higher than last year’s but nowhere near the targets. At the recent Adipec conference in Abu Dhabi, ADNOC’s upstream chief executive, Musabbeh al-Kaabi, noted that the prices are set to continue in the recent range through next year.
Despite the overwhelming calls for clean energy, ADNOC is holding its ground and expanding its oil and gas portfolio
Amid the overwhelming calls by international energy experts to diversify the energy sector, ADNOC’s long-term investment plans for the oil and gas sector remain intact. The company plans to ramp up production significantly as part of a broader plan to increase crude production capacity, giving the traditional energy sector a much-needed lifeline in a sea of change.
“Raising capacity to 5mn b/d will require massive investment to sustain. Because Abu Dhabi crude is among the lowest-carbon barrels globally, it’s our responsibility to ensure secure and affordable supply.” – ADNOC Upstream chief executive Musabbeh al-Kaabi
ADNOC has placed a high priority on its expansion plans for the future
During his opening address at the Adipec event, Adnoc chief executive Sultan al-Jaber projected that oil demand will remain above 100mn b/d through 2040. He also noted that AI will play a vital role in the expansion of ADNOC’s midstream and downstream expansion plans, with operations taking advantage of the advanced AI capabilities to maximize efficiency.
Additionally, al-Kaabi has noted the important role that the company will play in stabilizing the international energy prices, and that increasing demand will lead to ADNOC becoming a global leader in the sector over the next few years as its long-term expansion plan comes into fruition.
“It’s in our interest to ensure the market is stable whenever there is demand for low-carbon crude. Stability and predictability are great for investment. It takes only two or three years of maximum production to recover all costs.” – ADNOC Upstream chief executive Musabbeh al-Kaabi
With several international energy companies reporting refinery shutdowns and shrinking downstream output, ADNOC is perfectly positioned to lead the expansion of the midstream and downstream sector.
Operational costs are a concern for any energy company, but ADNOC has the backing of the UAE government
The UAE has stated that it will support ADNOC’s plans to secure long-term output and invest in the conventional energy sector. With operational and industry compliance costs remaining a major concern for most energy companies, ADNOC can rest easy knowing it has the support of its government. Three major factors are being attributed as the major drivers in ADNOC’s expansion plans, namely, substantial upstream investments, the expansion of liquefied natural gas (LNG) infrastructure, and the integration of AI-driven smart technologies.
