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ADNOC to tap new gas sources under AED400b expansion

|By Arabian Post Staff|ADNOC plans to explore and appraise Abu Dhabi’s unconventional gas resources, as the company seeks to enable future value creation from its untapped gas resources, the company announced. ADNOC will spend over AED 400 billion over the next five years, as it embarks on its Upstream and Downstream expansion and growth projects, the company announced.

The Supreme Petroleum Council (SPC) approved ADNOC’s key strategic investments program and future opportunities, as the oil and gas company expands its 2030 strategy, aimed at unlocking, creating and maximizing value and ensuring smart growth in its upstream, and downstream businesses, while strengthening market access. And, the SPC gave the green light to ADNOC to pursue international downstream investments that will position ADNOC as a global player in the downstream market.

The SPC is the highest governing body of the oil and gas industry in Abu Dhabi. The council formulates, approves and oversees the implementation of Abu Dhabi’s petroleum policy and follows up its implementation across all areas of the petroleum industry to ensure that the set goals are accomplished.

As it accelerates delivery of its 2030 strategy, ADNOC continues to optimize its Upstream operations and drive solutions to maximize recovery from its mature reservoirs, while seeking ways to cost effectively unlock the potential of untapped resources and leverage technology economies of scale to keep the operating cost per barrel at the most competitive level. It remains on track to expand oil production capacity to 3.5 million barrels a day by the end of 2018, and to improve drilling time by 30 per cent by 2019. Enhanced efficiencies have brought ADNOC’s leading low production cost down even further, a factor driving interest in the upcoming offshore concessions, which have attracted more than 14 potential partners from across the world.

In gas, ADNOC is focused on ensuring a sustainable and economic supply of gas for the UAE’s growing demand. To help achieve this ADNOC will access undeveloped tight reservoirs, tap into its gas caps and expand sour gas production. In addition, it has commenced an exploration drilling programme to explore for, and appraise, the potential of individual gas deposits in tight reservoirs. ADNOC utilizes industry best practice, drives targeted technology application and will invest in the future development of untapped unconventional resources, over the next five years.

ADNOC’s refreshed Downstream strategy focuses on additional value creation by pursuing two parallel paths. Domestically, ADNOC will leverage and optimize its existing assets, ensure fuel self-sufficiency and diversify and grow its refining, gas processing and petrochemicals business portfolio. At the same time as expanding its UAE-based downstream operations it will pursue international downstream strategic and commercially viable investments, aimed at reshaping ADNOC into a global company, with an adaptable, resilient portfolio, that delivers maximum value to the shareholder and catalyzes the UAE economy.

ADNOC plans to secure additional captive crude processing capacity in growth markets, establish sector specific global businesses and enhance its global marketing activities, including introducing non-speculative asset-backed trading, to further stretch the dollar from every barrel of oil it produces.

In support of its expanded 2030 strategy, ADNOC will grow its crude refining capacity by 60 per cent and more than triple its petrochemical production, to 14.4 mtpa by 2025 through a staged expansion plan aimed at initially optimizing its existing assets to grow and diversify its products portfolio. An aromatics project will convert naphtha, which is currently exported, into gasoline and aromatics and a large project to enhance the crude processing flexibility of its 900,000 bpd refining system will be taken forward.

In chemicals, a new linear alkyl benzene project and a new mixed feed cracker, at Borouge, will enable new value chains to be created. These expansions will make Ruwais the largest integrated refining and chemicals site in the world. When complete ADNOC will convert almost one fifth of its crude to chemicals, diversifying its range of high value products to provide a natural hedge to oil price movements.

ADNOC’s Thammama sub surface collaboration centre uses advanced technology to enable the smart decision making necessary to optimize the organisation’s performance, drive efficiencies and rationalise costs, across the organisation. The centre is integrated with ADNOC’s Panorama Digital Command Centre, which was inaugurated earlier this month .

Through Thammama, ADNOC is using smart analytics and is adopting Artificial Intelligence platforms to solve subsurface challenges and to help unlock more challenging resources and optimize field development plans, as well as reduce drilling time and manage production capacity across its operations.

The center is equipped with smart data analytics to build dynamic models of the subsurface that help specialists develop a more detailed understanding of Abu Dhabi’s reservoirs to de-risk the opportunities they hold. It has the capability to monitor up to 120 live drilling sites simultaneously, comparing performance against historical wells, plans and benchmarks to reduce drilling costs, improve rig efficiencies, and increase productivity.

The Panorama Command Center draws from a massive set of data points across ADNOC’s entire value chain; from the upstream to the downstream and global distribution network, visualizing it on a state of the art 50-meter wide video wall to provide a single access point to ADNOC’s real time performance. Using smart analytical models and leveraging cutting-edge AI platforms, it uses Big Data to generate new operational insights and recommend new, integrated pathways to optimize and enhance performance and create additional value. The center aggregates accurate, real time information from ADNOC’s operations and businesses, across the full oil and gas value chain, presenting data at a Group-wide level but also giving access to information from individual assets.

The integrated centres are a key part of ADNOC’s organisation-wide digital transformation, which will help deliver a more profitable upstream; a more valuable downstream and an economic, sustainable gas supply.

Delivery of ADNOC’s expanded 2030 strategy builds on three important changes it has made to the way it operates. It has expanded its approach to partnerships, to capitalise on growth opportunities, enhanced its capital structure, to more smartly finance its business, and revised the way it manages its portfolio of assets, to drive performance and unlock lasting value.

ADNOC recently confirmed plans to offer a minimum 10 percent stake, or 1.25 billion shares, and a maximum 20 percent stake, or 2.5 billion shares, in the partial IPO of ADNOC Distribution, its fuel distribution unit. An indicative price range of between AED 2.35 and AED 2.95 per share, has been set. At the top of the range, the IPO would be the largest in the UAE since DP World was floated, 10 years ago.

The proposed ADNOC Distribution IPO, which will be the first time ADNOC has placed shares of one of its subsidiary companies onto the public markets, will offer both UAE and international investors the opportunity to invest alongside ADNOC in one of the region’s leading retail brands.

Also published on Medium.