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Abu Dhabi, UAEWednesday 24 October 2018

Supreme Petroleum Council approves Adnoc strategy

The Supreme Petroleum Council has approved Adnoc's 2030 strategy aimed at generating growth in upstream, midstream and downstream segments.
Adnoc reaffirmed its intention to boost oil output by 400,000 bpd to 3.5 million bpd in 2018. Above, an oil rig along Port Zayed.Jaime Puebla / The National
Adnoc reaffirmed its intention to boost oil output by 400,000 bpd to 3.5 million bpd in 2018. Above, an oil rig along Port Zayed.Jaime Puebla / The National

The Supreme Petroleum Council (SPC), Abu Dhabi’s top oil industry decision-making body, yesterday approved Abu Dhabi National Oil Company’s (Adnoc) five-year business plan and budget, which includes a commitment to boost oil production by 400,000 barrels per day (bpd) by 2018 to 3.5 million bpd.

Other measures include a commitment to increase petrochemicals output by more than two-and-a-half times, to more than double petrol production, and to raise fertiliser output.

Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the Armed Forces and Vice Chairman of the SPC, said the strategy that Adnoc chief executive Sultan Al Jaber and his board had set out would “build on the foundations laid in the past eight months, during which Adnoc embarked on a journey to evolve into a more agile and resilient company that is strategic, commercially minded and performance driven”.

Since Mr Al Jaber took over this year, the company has undergone a series of major changes, including a nearly complete change of the most senior management, including major corporate divisions and chiefs of the main oil and gas operating companies.

Mr Al Jaber has also combined companies, including the offshore units, Zadco and Adma-Opco, to reduce the number of operating companies to 15 from 18, and taken other measures to streamline and cut Adnoc’s costs after the sharp drop in oil prices over the past two years.

Mr Al Jaber described the approval of the five-year plan and budget, as well as the strategy set out through to 2030, as a “momentous milestones” for the company.

Under the strategy, Adnoc’s upstream will remain its most profitable segment although the company plans to “enhance our downstream and petrochemical businesses, to take advantage of growing demand for higher value products”, Mr Al Jaber said in a statement released after the SPC’s approval.

Adnoc reaffirmed its intention to boost oil output by 400,000 bpd to 3.5 million bpd in 2018. That target was originally set for the end of next year, and the company yesterday left it open as to whether there might be any restriction on output in the meantime, under any deal that might be reached by Opec at a ministerial meeting in Vienna on November 30.

The UAE has backed efforts by Opec – agreed in Algiers in September – to hammer out a deal to limit output to rebalance the world oil market.

Adnoc said it “aims to stretch the margin of each refined barrel of oil”, and announced it would raise petrol production to 10.2 million tonnes per annum (mtpa) by 2022 with the addition of a new petrol and aromatics project, adding 4.2 mtpa of gasoline and 1.4 mtpa of aromatics.

Petrochemical production is to grow from 4.5 mtpa this year to 11.4 mtpa by 2025. The expansion will add polyolefin capacity and new petrochemical products coming from a world-scale mixed feed liquid cracker.

The plan also said the sharply rising output of sulphur from Al Hosn sour gas project, would create opportunities to develop a UAE fertiliser operation.

Adnoc will be “supporting the development of a local sulphur products industry, including enhancing the existing ammonia and urea industry, with a new generation of advanced fertilisers”, the statement said.

amcauley@thenational.ae

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