Market Trends of United Arab Emirates Oil And Gas Upstream Industry
Onshore Segment to Witness Significant Growth
- The United Arab Emirates (UAE) is among the world’s tenth largest oil producers. About 96% of the country’s roughly 100 billion barrels of proven oil reserves are located in Abu Dhabi, ranking number six worldwide. The UAE produces an average of 3.2 million barrels of petroleum and liquids per day.
- The United Arab Emirates accounted for over 13.07% of the share in the Middle East’s oil production, with 4.02 million barrels per day of production in 2022. It also has 11.7% of the region’s proven oil reserves as of 2020.
- According to Statistical Review of World Energy Data 2022, the country's oil reserves stood at 97.8 billion barrels (bbl), and gas reserves stood at 5.9 trillion cubic meters (TCM) as of 2020. About 90% of the total reserves are in Abu Dhabi, followed by Dubai, Sharjah, and Ras al-Khaimah. The majority of the acreage, both onshore and offshore, is relatively well explored, while the recent drilling has yielded a few significant discoveries.
- In August 2023, China Petroleum Engineering and Construction (CPECC) has secured a contract from Adnoc Onshore, a subsidiary of state-owned Abu Dhabi National Oil Company, to enhance production from its mature fields. This marks the second such agreement signed between the two companies within a three-month period.
- Additionally, in a bid to counter the production from the maturing fields, the country plans to increase investments in the field expansion projects and the application of enhanced oil recovery (EOR) techniques.
- Therefore, based on the above-mentioned factors, increasing onshore exploration and production activities are expected to witness significant growth of the United Arab Emirates oil and gas upstream market during the forecast period.
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Rising Oil and Gas Investments are Driving the Market Demand
- United Arab Emirates seeks to enhance the profitability of its upstream assets while developing the oil resources mandatory to meet projected increases in global oil demand. Abu Dhabi National Oil Company (ADNOC), a state-owned oil company and the largest offshore oil and gas producer in United Arab Emirates, plans to augment its upstream crude production further through concession agreements for new exploration and production.
- In November 2022, Abu Dhabi National Oil Company (ADNOC), announced a plan to spend USD 150 billion on capital expenditure in the coming five years as it plans to advance its 5 million bpd of oil production capacity target to 2027 on the back of improved market fundamentals. As part of this plan, ADNOC aims to drive USD 48 billion back into the United Arab Emirates economy through its ICV (In Country Value) programme.
- As of 2022, the United Arab Emirates was the seventh-largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC). In 2022, it saw a significant increase in production with oil output rising to 4,.02 million bpd. The oil and gas sector is critical to the UAE economy, contributing significantly to the country's revenue.
- As of 2022, the United Arab Emirates has produced 58 billion cubic meters of natural gas, which is comparatively higher than the 54.3 billion cubic meters produced in 2017. The country has formulated plans to significantly increase investments in natural gas explorations in the coming years.
- In February 2023, Abu Dhabi National Oil Company subsidiary Adnoc Drilling announced that it is planning to spend up to USD 2.5 billion in the next two years to rapidly expand its rig fleet in line with the emirate’s capacity enhancement programme.
- Moreover, in April 2023, Abu Dhabi National Oil Company (Adnoc) launched a fresh tender process for multiple packages involving its multibillion-dollar Hail & Ghasha offshore sour gas development. The state-run giant called on leading domestic and international contractors for new expressions of interest.
- Making some of the major projects economically viable with the help of domestic and foreign investments is expected to drive the United Arab Emirates oil and gas upstream market during the forecast period.
