State-owned Abu Dhabi National Oil Co. (ADNOC) is boosting investment to raise oil and natural gas production despite the OPEC+ deal. ADNOC’s proposed AED448 billion ($122 billion) spending plans will cover all of ADNOC’s business areas, including upstream production, refining, and trading. The government has approved ADNOC’s budget and proposal to develop low-carbon energy especially hydrogen.
The company plans to increase its oil production capacity from 4 million bpd currently to 5 million bpd by 2030. The OPEC+ pact puts the UAE’s production ceiling at 2.6 million bpd. A local media reported ADNOC found an additional conventional oil reserves of 2 billion barrels, bringing its total reserves of recoverable crude to 107 billion barrels. It also discovered an extra 22 billion barrels of unconventional fields. However, the extra unconventional reserves may not all be recoverable because they are more challenging to extract.
Analysts said the budget highlighted that ADNOC saw an opportunity to benefit from any potential supply shortages when oil markets recover in the future. OPEC+ producers will meet at the end of this month to discuss their future production policy. The alliance plans to boost oil in January, but some major members have suggested keeping the current production cuts as the coronavirus pandemic continues to ravage oil demand in some markets such as the US and Europe.
