Abu Dhabi: The announcement by Abu Dhabi National Oil Company to boost oil production to 4 million barrels per day by 2020 and five million barrels per day by 2030 will help the company meet rising global oil demand and balance oil markets, according to analysts.
Abu Dhabi’s Supreme Petroleum Council on Sunday approved Adnoc’s new integrated gas strategy and plans to increase its oil production capacity to 5 million barrels per day by 2030.
Adnoc’s targeted daily oil production by 2030
An investment outlay of Dh486 billion has also been allocated to meet its five year business plan, Adnoc said in a statement on Sunday.
“This announcement plays into Adnoc’s underlying strategy of pursuing sustainable value for the UAE’s growing energy needs in line with the country’s long-term economic aspirations,” said Ehsan Khoman, Director, Head of MENA Research and Strategy at MUFG Bank in Dubai.
He also said the significant increase in oil production capacity will warrant Adnoc the capability to respond to adjustments in the global demand-supply oil balance as and when necessary over the long-term.
investment outlay to help Adnoc meet its five-year plans
The comments come as oil demand set to increase in the coming years due to rapid economic development.
According to Dr Sultan Ahmad Al Jaber, Minister of State and Adnoc Group CEO, for the first time, the world is on the verge of consuming 100 million barrels of oil per day, with oil consumption increasing by an additional 10 million barrels per day by 2040.
Over the same period, demand for natural gas will increase by 40 per cent, while the market for higher-value polymers and petrochemicals will grow by 60 per cent.
“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 capitalise on the forecasted growth in demand for crude,” Al Jaber said.
size in standard cubic feet of UAE’s new gas discovery
The UAE is also targeting to become self-sufficient in gas and potentially become a net exporter of gas in future following new discoveries of gas totalling 15 trillion standard cubic feet.
“The UAE has been targeting higher oil and gas production for some time and the announcement to raise oil production capacity to 5 million barrels per day and become self-sufficient in gas reflect a couple of dynamics,” Edward Bell, commodity analyst from Emirates NBD told Gulf News.
“One is that the UAE has to ensure it produces enough oil and gas to remain a reliable supplier of hydrocarbons to global markets while at the same time meeting rapid domestic demand growth.”
“At current levels of demand intensity, there is a risk that over the next few years the UAE could consume too much oil domestically and not leave anything available for export.”
Higher oil and gas production from existing fields will support a faster pace of growth in the economy and investments will lead to a stronger performance next year, he added.