At a time when global oil markets are concerned about the supply and demand crunch, especially when looking at low spare production capacity and divestments from international oil companies, Abu Dhabi oil and gas giant ADNOC is once again showing its future strength.
The National Oil Company, led by Sultan Al-Jabr, announced that it made three new discoveries of crude oil during the meeting of the Executive Committee of ADNOC. ADNOC stated that the largest discovery was made in the well-known onshore Bu Hasa field, which is part of ADNOC’s onshore concession. Currently, the largest production capacity of ADNOC’s onshore fields is 650,000 barrels per day. 500 million new barrels of oil were discovered, according to ADNOC, opening a new formation in the field, providing new oil resources from high-quality Murban.
At the same time, ADNOC and Occidental Petroleum, a joint venture in the Onshore Concession 3, reported the discovery of 100 million barrels of oil, the second discovery in the concession. US oil giant Occidental was awarded the Block 3 onshore concession in 2019.
Another smaller discovery was made by ADNOC’s joint venture with Korea National Oil Corporation and GS Energy which reported the discovery of about 50 million barrels of “light and sweet quality Murban” crude.
2022 is already a successful year for exploration, with earlier this year ADNOC and Eni reported a natural gas discovery in offshore Block 2. Based on preliminary results, ADNOC said, the discovery is estimated to be between 1.5 and 2 trillion cubic feet. (Trillion cubic feet). ). In December 2021, Japan’s Inpex and ADNOC reported the discovery of 1 billion barrels of oil equivalent in the onshore block 4
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For Abu Dhabi, the above discoveries are crucial as ADNOC targets significant production expansion in its oil and gas fields. At the same time, Abu Dhabi is trying to diversify its upstream joint ventures away from previous majors focused on the West, to a new line of Asian operators. Chinese and Indian parties are being targeted, while Russian operators are also keeping an eye on the UAE. The previous western focus was based on purely geopolitical and commercial realities, but with Asia becoming the main market for ADNOC and others in the UAE, expansion at all levels is essential. Lockdown in Asian markets and consumers, such as Saudi Arabia, Qatar and other countries, is seen as a sustainable strategy.
In the coming years, a multi-billion dollar exploration and production expansion strategy is being implemented to reach a potential production capacity of 5 million barrels per day by 2030, compared to about 4 million barrels per day at present.
Analysts are also watching for potential changes in Abu Dhabi in strategy and focus on investment, where Abu Dhabi Crown Prince Mohammed bin Zayed has been appointed as the new president of the United Arab Emirates. Potential changes are imminent, as evidenced by the rising profile of Khalid bin Mohammed bin Zayed Al Nahyan. A change in ADNOC’s overall strategy is not expected, particularly as long as Sultan Al Jabr remains in power. Khaled and Sultan seem to be able to read and write with their eyes closed. However, the new position of Mohammed bin Zayed will leave some gaps to be filled, including in the areas of energy and investment.
By Cyril Widdershoven for Oilprice.com
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