With oil tumbling ahead of the grueling 2023 recession, the last thing OPEC+ and (bullish) oil traders wanted to see is even more supply coming on line, and yet that's precisely what the a core gulf hub is proposing. According to Bloomberg, the United Arab Emirates - which in recent years has aggressively sought to diversify away from oil and to become the world's crypto hub - will look to revert back to its core competency and plans to expand its global energy - and especially energy spending - to boost oil and natural gas production capacity.
Abu Dhabi National Oil Co., also known as Adnoc, will invest $150 billion in the five years through 2027, it said in a statement Monday. That’s an increase on the previous spending plan of $127 billion over five years that was announced a year ago.
The spending spree will try to raise crude output capacity to 5 million barrels a day by 2027, earlier than the previous target of 2030 and comes at a time when Saudi oil giant Aramco is also planning to expand its output by 12 million by 2027.
The UAE is the largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia and Iraq. It’s spending billions of dollars to pump more oil and gas, even as the country strives to reach net-zero carbon emissions by 2050.
Oil producers have benefited for most of this year from surging prices, driven in party by Russia’s invasion of Ukraine. While Brent crude has fallen back to near where it started the year, it climbed to more than $100 a barrel in February.
Adnoc will also form a new unit for gas processing and marketing, according to a statement. It will look to sell a minority share of the business, called Adnoc Gas, through an initial public offering in Abu Dhabi in 2023.
The government-owned Adnoc will set up a separate arm to look at international expansion in gas, chemicals and new energy sources.
The UAE, which has emerged as the global hub of crypto activity following crackdowns in most eastern and western nations, is the largest producer in the Organization of Petroleum Exporting Countries after Saudi Arabia and Iraq. It’s spending billions of dollars to pump more oil and gas, even as the country strives to reach net-zero carbon emissions by 2050 (narrator: no it doesn't).