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The UAE has no plans to limit its oil production to support renewable energy, and the country’s climate minister pointed to strong global demand as a driver of increased crude output. As one of the few countries likely to increase oil production, the UAE is continuing to ramp up production based on demand. However, the head of state-owned oil company ADNOC is concerned that if other countries do not continue to invest in oil and gas, we may face energy shortages in the transition to renewable energy.
In September, the United Arab Emirates (UAE) announced plans to increase its oil production to 5 million barrels per day five years ahead of schedule. Abu Dhabi National Oil Company (ADNOC) The target is 5 million barrels per dayCrude oil production by the end of the century. However, thanks to increased investment, ADNOC now thinks it can move this target forward to 2025 to take advantage of rising global demand – before the need for the transition to green falls.
While the rest of the world’s oil producers are working to restore their output to pre-pandemic levels, only the UAE and Saudi Arabia continue to have spare oil production capacity. Increased production levels are not without cost, but the UAE wants to sell more oil and gas amid high fossil fuel prices. Oil producers have benefited from record-breaking oil prices this year, with natural gas prices soaring amid a global shortage.
ADNOC statement Its new goal is: “As we embrace the energy transition and future-proof our business, we will continue to explore potential opportunities that can further unlock value, unlock capital and improve returns.” The group also requires international partners in its fields to convert its crude oil Yield increased by at least 10%. Experts believe that if ADNOC achieves its 2025 target, it can raise its target to 6 million bpd by 2030.
In August, the UAE averaged 3.4 million bpd, although it blamed OPEC’s curbs on oil output for the low figure.OPEC+ recently announced that it will further hamper production cut oil production There are further concerns about a drop in global demand due to economic stress. OPEC+ will cut production by 2 million barrels per day from its members starting in November. But Mariam Almheiri, UAE Minister of Climate Change and Environment, made it clear that as long as the world needs oil and gas, we will provide them. ”
German Chancellor Olaf Schultz visited the United Arab Emirates in September to deepen Germany’s ties with the oil-rich country and to further wean itself off Russian energy. The UAE has signed an agreement with Germany to supply LNG, with the first deliveries expected by the end of this year. While many European countries are switching from fossil fuels to renewable energy, natural gas is seen as an important part of the energy transition. Using “cleaner” fossil fuels will help Germany and other European countries meet their energy needs while developing green energy capacity.
While continuing to drive investment in oil and gas, Almheiri is also staunchly supportive of the UAE’s development of a strong renewable energy industry.she explain“We need to be careful…because the conversation is happening and it’s all about energy, but it’s important that we don’t lose the context of economic growth, [and] Climate is among them. Discussing the country’s renewable energy projects, she said: “It’s not just about production … you have to look at storage, you have to look at networks, you have to look at distribution. It’s such a complex network. “It is very important that economic growth, energy security and climate action go hand in hand,” she added. “
But not everyone is so optimistic about the future of oil and gas. ADNOC Chief Executive Sultan al-Jaber said in September that the oil market does not have much leeway and could see further disruption with minimal spare capacity. Insufficient investment in fossil fuels could lead to a supply-demand gap, he said, and the world was only just beginning to develop its renewable energy capacity.he explain“If people’s basic energy needs are not met, economic development will slow and climate action will slow.” Jaber added: “If we underinvest in today’s energy system until tomorrow’s energy system is ready , we will only make things worse.”
The CEO believes that spare oil capacity is currently equal to only 2% of global consumption, a challenge that OPEC+ has repeatedly highlighted. This buffer cannot get bigger without more investment in oil and gas outside the UAE and Saudi Arabia, meaning that reliance on the two oil-rich countries will remain as demand continues to grow very large.
Felicity Bradstock for Oilprice.com
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