Abu Dhabi is to invest 448 billion dirhams (US$122 billion) in oil and natural gas over the next five years as it seeks to raise production capacity, even while OPEC restricts its output.
The Persian Gulf emirate’s top body for energy policy, the Supreme Petroleum Council (SPC), approved the budget for Abu Dhabi National Oil Co (ADNOC), the state-run WAM news agency reported on Sunday.
The investment plan is to contribute to growth and expansion “in all business areas,” including production, refining and trading, the statement said.
Abu Dhabi, which holds most of the crude oil in the United Arab Emirates (UAE), has discovered an additional 2 billion barrels at conventional fields, WAM reported.
That brings the country’s total reserves of recoverable oil to 107 billion barrels. The emirate has also found an extra 22 billion barrels of unconventional oil, which is harder to extract and might not all be recoverable.
ADNOC, the country’s biggest energy producer, wants “to achieve the maximum possible value from every barrel of oil produced, refined and sold,” the statement said.
The state-owned company plans to raise daily production capacity to 5 million barrels by 2030 from about 4 million barrels. OPEC has capped the UAE’s output at roughly 2.6 million barrels a day until the end of the year as part of the cartel’s plans to restrict supply and bolster prices in the face of the COVID-19 pandemic.
Officials in Abu Dhabi, the UAE’s capital, last week privately floated the idea that the nation could leave OPEC, a highly unusual step that would probably destabilize oil markets.
UAE Minister of Energy Suhail Al Mazrouei later said the UAE “has always been a committed member,” although he did not address the country’s future in the cartel.
“The increase in the UAE’s conventional oil reserves sends a strong signal that ADNOC is leaving no stone unturned in unlocking value from our abundant hydrocarbon resources,” chief executive officer Sultan Al Jaber said.
The SPC increased ADNOC’s budget for the five years through 2025, the statement said.
In 2018, ADNOC said the SPC had earmarked 486 billion dirhams for investments from last year to 2023, the last period for which the company provided such information.
The Abu Dhabi government also gave approval for ADNOC to develop hydrogen as a low-carbon source of energy, and to award contracts for companies to explore onshore and offshore oil and gas blocks.
OPEC and allied producers, such as Russia, are set to meet next week to decide whether to increase output in January, easing the cuts that started in May at the height of the pandemic.
They might be forced to delay the hike as the virus continues to sap demand for energy.
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