By TBY | UAE | Sep 13, 2017
The general consensus is that ADNOC has responded nimbly to the drop in oil prices. Part of that is due to the groundwork that was laid beforehand. Hatem Nuseibeh, president […]
The general consensus is that ADNOC has responded nimbly to the drop in oil prices. Part of that is due to the groundwork that was laid beforehand. Hatem Nuseibeh, president for Total UAE, told TBY, “Abu Dhabi started taking the right steps even before oil prices went downhill. … [For the past three years] I noticed local authorities doing the groundwork and making preparations in case of a lower oil price environment.“ Salem Ashoor, his counterpart at British Petroleum in the UAE, built on this sentiment, telling TBY, “ADNOC has embarked upon a journey that will become the new benchmark for NOCs, where capability, technology, efficiency, and selectivity will become vital when it comes to building partnerships.“
The latest move from the company has been the launch of ADNOC’s 2030 Strategy. Approved by the UAE Supreme Petroleum Council in November 2016, the strategy aims at driving ADNOC’s long-term success in an evolving energy market and strengthening the company’s role as a major contributor to the country’s development and economic diversification objectives. The 2030 strategy aims to turn the institution into a more agile and resilient company, driven by performance, focused on people, and with an overarching ambition to have the highest KPIs in the industry.
The strategy presents a roadmap for the company’s upstream, midstream, and downstream areas to make its business as profitable as possible. On the upstream side, which represents ADNOC’s largest source of revenue, the company seeks to achieve a production target of 3.5 million bpd by 2018, a substantial increase from the 400,000bpd that were reported in November 2016. ADNOC also announced its intentions to focus on the exploration of new and innovative technologies for enhanced oil recovery and sour gas resources. The guidelines culminated in a transformation path that began with the merging of ADMA-OPCO and ZADCO into one single entity and the opening of Abu Dhabi Company for Onshore Petroleum Operations’ (ADCO) onshore oilfield concessions, which has led multinationals the likes of BP, Total, GS Energy, Inpex, and CNPC to invest in 40% of the shares of Abu Dhabi’s leading upstream company, opened to private financing in 2016. The strategy also includes a technology transfer agreement between ADNOC and its peer Saudi Aramco.
On the downstream side, the company will revamp its refining and petrochemicals business to enhance profitability. With a growing demand for these products inside the UAE and in Asian markets, ADNOC plans on increasing its investments in new downstream projects, including gasoline and aromatics production, as well as additional polyolefin capacity. Strategy 2030 contemplates a three-fold increase in Abu Dhabi’s domestic petrochemical output by 2025. This target has been recently strengthened by the agreements signed with ExxonMobil, Indian Strategic Petroleum Reserves, and investments carried by Mubadala’s Borealis in the western region. Strategy 2030 also includes Abu Dhabi’s first fully integrated Gas Master Plan, a commitment to provide the gas necessary to meet the Emirate’s demand and the restructuring of gas prices.
Talking about the company’s new roadmap, Dr. Sultan Al Jaber, CEO of ADNOC, expressed, “Our ultimate goal is to remain a key contributor to the UAE economy and a leading player in advancing the industry (…) we will ensure the oil and gas needs of our domestic and international customers are met and also enhance our downstream and petrochemical businesses to take advantage of growing demand for higher value products.“ Dr. Al Jaber’s message is clear: ADNOC is willing to transform as many times as necessary in order to overcome the market’s adversities.
The 2030 Strategy is completed by leadership and youth development programs to enhance the capability of local talent. The programs are intended to foster a breed of Emiratis capable of coping with the new scenario of ADNOC’s activities, become increasingly specialized on technology-driven machinery, and enable global mobility of local staff.