Overview
There continue to be many opportunities for U.S. exporters in the oil and gas sector in the UAE. The United Arab Emirates (UAE) is among the world’s ten largest oil producers. About 96% of the country’s roughly 100 billion barrels of proven oil reserves are located in Abu Dhabi, ranking number six worldwide. The UAE produces an average of 3.2 million barrels of petroleum and liquids per day.
Abu Dhabi National Oil Company (ADNOC) is a global leader in the oil and gas industry and is active in all sectors of the industry. ADNOC expects to reach 5 million barrels of maximum sustainable production capacity by 2030.
The UAE seeks to develop unconventional oil and gas production. The U.S. Energy Information Agency cites figures estimating the UAE holds the seventh-largest proven reserves of natural gas in the world at over 215 trillion cubic feet. In 2020, the UAE announced the discovery of over 80 trillion cubic feet of gas resources at Jebel Ali. In February 2022, ADNOC announced the discovery of natural gas resources offshore of Abu Dhabi. This discovery marks the first from Abu Dhabi’s offshore exploration concessions, highlighting the continued success of ADNOC’s block bid rounds and its expanded approach to strategic partnerships.
The country is seeking to become self-sufficient in gas supply by 2030. The UAE currently imports natural gas from Qatar through the Dolphin pipeline to supply power plants and desalination plants.
Simultaneously, the UAE has made the energy transition a priority and the UAE was the first Arab state to set a “net-zero” emissions target. ADNOC is hastening its decarbonization strategy by setting up a new low carbon solution and international growth vertical. In December 2022, ADNOC announced that the new vertical will focus on renewable energy, clean hydrogen, and carbon capture and storage, as well as international expansion in gas, liquefied natural gas (LNG), and chemicals. It will play an important role in advancing the company’s continuing transformation, which includes a focus on the decarbonization of its operations, energy efficiency, and a reduction in methane emissions.
In February 2023, ADNOC announced it has signed agreements with 23 UAE and international companies for local manufacturing opportunities across a wide range of critical industrial products worth $4.63 billion. The agreements outline the intention of the companies to manufacture these products in the UAE, supporting the ‘Make it in the Emirates’ initiative and the ‘Abu Dhabi Industrial Strategy’.
Leading Sub-Sectors
ADNOC’s strategic development is guided by its 2030 Integrated Strategy, released in 2016. ADNOC operates fourteen subsidiary companies under one common identity, the ADNOC Group. Two of ADNOC’s largest operating companies are ADNOC Onshore and ADNOC Offshore, which account for most of the UAE’s oil and gas production.
Upstream
ADNOC seeks to enhance the profitability of their upstream assets, while developing the oil resources necessary to meet projected increases in global oil demand. ADNOC plans to further augment its upstream crude production through concession agreements for new exploration and production.
In March of 2022, ADNOC awarded framework agreements worth $658 million to further expand drilling operations and crude oil production capacity. In May of 2022 ADNOC announced three oil discoveries including one at Bu Hasa, Abu Dhabi’s biggest onshore field, with a crude oil production capacity of 650,000 barrels per day (bpd). The discovery in Bu Hasa includes 500 million barrels of oil from an exploration well in the field, which offers substantial additional premium-grade Murban oil resources. A discovery of nearly 100 million barrels of oil was announced in Abu Dhabi’s Onshore Block 3, operated by Occidental. In a third discovery, around 50 million barrels of light and sweet Murban-quality crude were found in the Al Dhafra Petroleum Concession.
Downstream
The expansion of ADNOC’s downstream activities is central to their 2030 Integrated Strategy. ADNOC has embarked on an ongoing $45 billion effort to upgrade its downstream operations, leveraging existing assets and new downstream investments to strengthen their market share.
Opportunities
The UAE’s exploration projects will create opportunities with greenfield projects. UAE producers continue to test and implement new extraction technologies to raise the rates of recovery and prolong output. Unconventional oil and gas resources are of great interest to the UAE.
The Ruwais Derivatives Park (TA’ZIZ Industrial Chemicals Zone) in the Abu Dhabi Emirate is a major project that will be an industrial hub for the chemical derivatives sector. The Park is located within ADNOC’s long-established refining and petrochemicals cluster in Ruwais and is expected to become the world’s largest integrated refinery and petrochemicals complex. The cost of Phase I alone is estimated at over $5 billion. ADNOC is inviting U.S. and international companies to participate in the development of the Ruwais Derivatives Park. Opportunities will also be available across the supply chain and in a wide variety of sectors in Phase 2 (2027-2028).
In January 2023, TAZIZ announced the signing of a shareholder agreement with Fertiglobe, GS Energy Corporation (GS Energy), and Mitsui & Co., Ltd. (Mitsui), to develop an anticipated 1 million tons per annum low-carbon ammonia production facility at the TAZIZ Industrial Chemicals Zone. This is a further step in the project’s journey towards a final investment decision (FID).
ADNOC seeks to build a new 600,000 barrels per day refinery to increase the Ruwais complex’s feedstock capacity and augment its refined products output beyond its current maximum capacity of 817,000 barrels per day.
ADNOC plans to construct a new liquefied natural gas plant in Fujairah that would more than double its export capacity, with production of as much as 9.6 million tons a year (Bloomberg, May 2022).
During the ADIPEC trade show in November 2022, ADNOC announced a new upstream methane intensity target of 0.15% by 2025 – the lowest in the Middle East. The announcement of the 0.15% methane intensity target coincided with the publication of the UNEP’s 2022 International Methane Emissions Observatory (IMEO) at ADIPEC.
ADNOC announced more than 30 innovative industrial projects worth more than $1.6 billion during the second edition of the Make it in the Emirates Forum that took place at the end of May 2023. These projects include pioneering initiatives such as setting up the first hydrogen electrolyzer plant in the UAE (Gulf News, May 2023).
ADNOC regularly engages new suppliers from the United States. To bid on ADNOC opportunities, suppliers should register with ADNOC as a supplier. Please contact our commercial team at Office.AbuDhabi@Trade.gov for additional information.
Resources
- Abu Dhabi Department of Energy (DoE)
- Abu Dhabi National Oil Company (ADNOC)
- Dubai Supreme Council of Energy (DSCE)
- Ministry of Energy and Infrastructure (MoEI)
Trade Shows and Exhibitions
Please contact us for additional information regarding trade shows, U.S. pavilions, and export promotion services that may be available for U.S. companies.
ADIPEC – Abu Dhabi International Petroleum Exhibition and Conference
Date: October 2-5, 2023
Venue: Abu Dhabi National Exhibition Center (ADNEC), Abu Dhabi, UAE