State-owned Adnoc ended 2021 on defiantly traditional territory after a year marked by landmark ambitions in the clean energy arena. In early December, it unveiled a $127bn five-year business plan with major expansions of oil and gas capacity at its heart.
And, two weeks later, it celebrated a significant discovery in acreage apportioned during its first international bid round. In word and deed, Abu Dhabi has publicly rejected the IEA’s scenario of a global moratorium on greenfield fossil fuel developments.
The 2022-26 capital investment programme approved by the board—chaired by the emirate’s Crown Prince and de facto UAE ruler Sheikh Mohamed bin Zayed al-Nahyan—is not dramatically larger than that laid out a year earlier for 2021-25. But, while the accompanying statement nodded to moves into hydrogen and renewables, the centrepiece was firm quantifiable plans to raise crude capacity by c.25pc and expand gas production sufficiently to double LNG exports to 12mn t/yr, both by 2030.
The 5mn bl/d target was first adopted in April 2020, just as a previous wave of field expansions was nearing completion. Work on some of the contributing projects is well-advanced: developments at the giant Bab and Bu Hasa onshore fields—increasing their combined capacity by c.14pc to 1.135mn bl/d and extending the ageing assets’ production lives—are scheduled for commissioning in 2022-23.
And bids were submitted in late 2021 to execute the first phase of a long-term development programme at the Umm Shaif field, which will ultimately increase capacity by almost a third, to c.360,000bl/d, and again extend the plateau of Abu Dhabi’s oldest offshore field. Larger schemes are expected to move into the construction phase within the next two years—notably the long-planned expansion of the supergiant Upper Zakum offshore field to attain the 1mn bl/d milestone.
Exploration drive
The emirate is also intensifying its exploration drive—symbolically kicked off as far back as early 2018 with the offer of six newly delineated contract areas to international bidders. Awards from a second round for a further five areas were belatedly concluded in August, as the auctions opened up virtually all of the emirate’s territory outside existing concessions. The chosen firms’ prospecting efforts are to both be supported by and feed into “the world’s largest continuous 3D onshore and offshore seismic survey” underway by China’s BGP.
The first fruits appeared in February 2021 when US super-indie Occidental Petroleum announced a “multi-reservoir” find of unspecified potential size and composition at onshore block 3, a 5,782km² area in Abu Dhabi’s southeast, close to its producing Shah sour gas development. In December Adnoc took to social media to celebrate the discovery by Japan’s Inpex of up to 1bn bl oe—including substantial volumes of the emirate’s flagship Murban grade—in onshore block 4, a 6,100km² area in the northeast.
Should discoveries be adjudged commercial, the international operators will be offered production-sharing agreements stretching into the early 2050s—indicative of the length of the UAE’s crude production horizons. Adnoc will be permitted a 60pc stake in new developments.
The December statement represented a first public confirmation of the emirate’s goal to double LNG export capacity—a remarkable turnaround from its 14-year status as a net gas importer. But Abu Dhabi has been heavily focused for several years on developing indigenous gas resources, long known but hitherto unexploited for technical, financial and environmental reasons. It has recently awarded contracts linked to two major sour gas projects off the northwest coast—the Dalma development in the far west, with a 350mn ft³/d target by 2025, and the TotalEnergies-led Hail/Ghasha project, intended ultimately to produce 1.5bn ft³/d.
Adnoc’s stated aim is to add 3bn ft³/d of non-associated gas by 2030, to which will be added volumes associated with increased oil production. And the launch of the procurement process for a greenfield 9.6mn t/yr export terminal at Fujairah—an oil logistics hub on the UAE’s northeast coast east of the overcrowded and politically charged Strait of Hormuz—had meant ambitions to increase LNG export capacity were something of an open secret.
When Adnoc first launched its integrated gas strategy three years ago, the focus was primarily on restoring self-sufficiency, alongside only a vaguely stated intent to regain net exporter status. The scale of the newfound ambition in the sector may reflect awareness that the long-term outlook for LNG demand is considerably more positive than that for the firm’s historic crude oil mainstay.
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