Gulf oil companies such as Adnoc and Aramco have begun to aggressively invest downstream, Dr Sultan Al Jaber tells The Future Investment Initiative
Regional petchems to grow by 60% by 2050, says Adnoc CEO
Petrochemicals will grow by 60 per cent by 2050 in the region, with capital expenditure being deployed to meet upstream and downstream demand in the Middle East, according to the chief executive of Abu Dhabi National Oil Company.
"Petrochemical growth is strongest ever. It will grow by 60 per cent by 2050, with this indication, being a major oil producing nation, we have only one answer when it comes to outlook … expand our portfolio of investments,” Dr Sultan Al Jaber told The Future Investment Initiative in Riyadh on Tuesday.
The UAE, which accounts for 4.2 per cent of global production, much of it from Adnoc-owned and operated fields in Abu Dhabi, has increasingly made a shift to grow its refining and petrochemicals assets to meet growing demand from Asia. Adnoc has plans to invest up to $45 billion with its partners, including the doubling of its refining and tripling of its chemicals capacities at its oil hub at Ruwais, which includes a project to develop the world’s largest integrated refinery.
“We are going to expand our investments in upstream. We are expanding our production in mid-stream – in gas mainly and in the petchems and refining,” the Adnoc chief told the forum.
He dismissed concerns that the oil markets had breached peak demand, noting the world needed another 10 million barrels per day increase in production over the next two decades.
"We are far from being over [the peak demand]. The oil and gas sector is supported and equipped by really robust data and fundamentals,” Dr Al Jaber told delegates.
“Today, oil [demand could soon break] 100 million barrels per day, but we will see an increase in oil production. So you will see major capex programmes being deployed to help advance the projects to help meet the demand in the future,” he added, observing demand for gas would grow by 40 per cent by 2040.
The UAE last year earmarked Dh400bn to be spent in unlocking its sour gas caps as well as developing and acquiring downstream capabilities at home and abroad over the next five years.
Adnoc, along with Saudi Aramco, has since formed a joint venture to invest in a $44bn integrated refinery on the western coast of India along with local state-backed refiners.
In May, Adnoc launched its first ever licensing round for oil and gas, offering up to six blocks for international companies to bid.
The company also offered a five per cent stake worth $550m in a drilling subsidiary to Baker Hughes earlier this month.
The Adnoc chief said that the moves were part of a plan to “revisit” the company’s business chain.
“We were able to deliver the low hanging fruits, those to me were the quick ones,” said Dr Al Jaber.
“We have a very a very rich pipeline of many new opportunities."
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